Hello, and Welcome to Cimpress' 2026 Investor Day. My name is Meredith Burns, Vice President of Investor Relations and Sustainability. I am very happy that you are here with us to learn about the progress that we are making across Cimpress. Today, we will hear from executives representing Cimpress, Vistaprint, Upload and Print, National Pen, and BuildASign. It is a great lineup. There are management bios available in the speaker bio tab of the webcast viewer.
All right. Now, let us talk about how we are going to spend the next roughly three hours together. Robert will start with some perspective on our advantages and progress against our strategic and financial goals. Next, Maarten will discuss creating value through shared technology and AI. Then Florian will demonstrate the progress we are making in Vistaprint. Sean will review our financial results and outlook, along with a deeper look into recent tech and M&A.
Now, at that point, we are going to take a short break and then come back for two panel discussions, one on manufacturing and supply chain excellence as a driver of growth and efficiency, and the other on AI as a driver of growth and efficiency. Then finally, we will finish with a Q and A session to cover any other questions beyond those panel discussion topics. Now, in terms of what to expect today, we are going to cover both pre-submitted and live questions during the event. You can submit questions any time using the Q and A chat button, and we will take as many questions as we can in the Q and 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.
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 about the future. So 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. With that, let us get started with Robert Keane.
Hey, thank you, Meredith. Welcome, everyone. I really want to thank you for your interest in Cimpress. My goal this morning is really to share my perspective on our company, why our competitive moat in manufacturing and supply chain is widening and becoming even more valuable in an AI-driven world, and how our strategy and execution is underpinning our fiscal 2028 financial targets. Cimpress helps millions of businesses build brands, stand out, and grow. The customized physical marketing products and the branded merchandising which we produce bring our customers' business identity to life in tangible, physical form. The value that we deliver to our customers has made us the global leader in web-to-print mass customization, delivering high quality, affordable, customized physical products quickly and conveniently, even in low quantities.
Thanks to our disruptive business model, our deep bench of talented team members, and our scale advantages, Cimpress has delivered a long history of growth and profitability. Importantly, we have a clear growth strategy and very specific operational initiatives to extend that track record. That is why, more than a year ago, we set out public targets for fiscal 2028 adjusted EBITDA and why we recently raised that target. The trajectory is straightforward. In fiscal 2026, we generated $3.7 billion of revenue and $458 million of adjusted EBITDA. Our fiscal 2028 targets takes adjusted EBITDA to at least $615 million. Just as importantly, that profit growth converts to a meaningfully higher free cash flow and significantly reduces our leverage. In his session, Sean is going to take you through the specific drivers and the financial path for each of these years. Note that our uppermost objective is not actually EBITDA.
It is intrinsic value per share. But as I wrote in the annual letter we published in July, we are using EBITDA as a measurable milestone by which investors can judge our progress on the path to significantly higher intrinsic value per share. Our market, the web-to-print market, is an evolving one, and we are leaning into that and capitalizing on the market forces and trends that are driving that evolution. First, generative AI is lowering the barrier to create attractive visual assets. That is a tailwind for Cimpress because design so often needs a physical manifestation. Second, our manufacturing and supply chain capabilities are world-class and unmatched. AI is democratizing design creation, and as that happens, Cimpress benefits from our hard-to-build defensible capabilities in the physical realm. Who can manufacture a bespoke physical product, even in small quantities, deliver it quickly, and do so profitably at unbeatable prices?
That is Cimpress. We are the lowest cost producer with the broadest product offering, the greatest market share, and the largest geographic footprint in the web-to-print world. Third, we are growing strongly with products that we refer to as elevated products, and we are evolving into new channels via partnerships and expanded advertising opportunities. The addressable market for small and mid-sized business physical marketing and branded merchandising across North America, Europe, and Australia exceeds $100 billion. But most of that volume is still offline, and web-to-print penetration varies significantly by product category. For our legacy products, like business cards, holiday cards, flyers, and photo mugs, online penetration is high and our market share is very strong. But growth is slow given the market's maturity. Average per customer value is also low because the use cases for these products are relatively limited.
In contrast, large categories, and several of these create a very large market which remains offline. Web-to-print penetration is happening, it is early, and Cimpress is leading the migration online. These categories largely consist of what we call elevated products, and I am going to discuss those in detail shortly. Because they make up the majority of the wallet that businesses spend on physical marketing branded merchandise, they are also essential to attract, to serve, and to retain high-value customers. That is what our strategy is built to do.
Our strategy places high-value customers at the center. Everything else is in service of them. When we serve high-value customers well, we win more of their wallet share, which increases their lifetime value, and we get better for all of our customers. Around high-value customers, we have three strategic objectives, rapid growth of elevated products, design enablement, and manufacturing and supply chain excellence.
We also have three ways of working. Those are velocity, continuous improvement and efficiency, and shared strategic capabilities. For example, our mass customization platform and our procurement expertise. Wrapped around all of that is AI, and we are using AI to deliver customer value faster, to remove friction, to boost productivity, and we are doing that across every business and in every function. This strategic framework is a key part of how we align our team members to our priorities, and you will find more details and examples of this in my annual letter. We translate our strategic framework into action via growth levers and efficiency levers. Our growth levers are wallet share expansion, elevated products, new channels, and tuck-in acquisitions or equity investments. Our efficiency levers are manufacturing supply chain excellence, standardizing and sharing technology platforms, increasing the collaboration between various Cimpress businesses, and AI-driven simplification and automation.
We staff operational initiatives at Cimpress with talented team members whose job is to execute on these two types of operational levers. That ensures operational execution. It also makes us confident that we are going to significantly expand our adjusted EBITDA and free cash flow over the next two years, while simultaneously funding investments that will support revenue and profit growth well beyond fiscal 2028. In the next few slides, I will give you some examples of progress in each of these drivers. Let us start with wallet share and the gains we have been making there, and I will use our largest business as an example. The chart on the left shows Vistaprint's annual variable gross profit as an average amount per customer. This is a metric that we share with earnings each quarter, and it allows you as investors to track our progress.
Vistaprint grew that metric 10% in fiscal 2026, which was an acceleration over the multi-year CAGR since 2021, which has been about 7%. High-value customers are the primary driver of the expansion which you see on this slide. Historically, Vistaprint's customer base was characterized by high-churn, price-sensitive, low LTV customers ordering deeply discounted business cards and other legacy products. That actually was a very strong foundation that served us very well in our early history. But we have fundamentally evolved our offering, and we are growing our wallet share in the same type of businesses who had previously only purchased our legacy discount products. As Vistaprint satisfies more of a small business's brand-building needs, retention increases, lifetime gross profit per customer expands, and customer acquisitions are amortized more effectively, thanks to that higher LTV. You will hear much more about this in Florian's presentation on Vistaprint.
Let me turn to elevated products, and as I mentioned a few moments ago, these are fundamentally important to attract, serve, and retain high-value customers. The images on this slide show examples of these types of products. Customers place a higher value on these items because they really are primary touchpoints for their brand identity. Being great at these types of products allows Cimpress to earn a much larger portion of their overall marketing budgets. In some cases, like packaging, we become an integral component of the products which they sell, and that actually leads to even stronger revenue retention rates due to our customers' ongoing replenishment needs. In fiscal 2026, promotional products, apparel, and gifts, something we group together under the term PPAG, represented $825 million in revenue across Cimpress. That accounted for about 22% of our revenues.
Within Vistaprint, constant currency PPAG revenue growth was 11%, reaching over $355 million, with variable gross profit from this category growing 16%. In custom packaging and labels, we have these specialized brands, for example, BoxUp in North America and Packstyle in Europe. Together, those two firms or companies achieved constant currency growth of 33% in fiscal 2026. Elevated products require sophisticated mass customization capabilities and manufacturing capabilities. So we are investing in these operations in order to deliver highly competitive quality, highly competitive fulfillment speed, and highly competitive price. Here are examples of products that are launching in fiscal 2026, that either did launch in 2026 or will be launching in 2027. In custom food and beverage packaging, we're launching assortments that restaurants truly value for conveying their brands like tray liners, paper bags, snack trays, paper cups.
Our pricing, like all of our products, is competitive at any order size, and most of these packaging products are sustainable by design. For example, home compostable paper products replacing unbranded plastic takeout containers. In corrugated boxes, our production lines are setting new industry standards for time to customer, with zero setup fees and very low minimums. Our vision is custom branded boxes in the quantities that every business needs, no matter how low, no matter how high, at unit prices previously reserved for generic unprinted craft cartons. We also rapidly are expanding our products for events like trade shows, markets, and fairs, and building supply chain and decoration capabilities to vastly expand our customized apparel range. We'll show you more examples in the Vistaprint presentation, and in the manufacturing panel, we can discuss this in more detail.
Cimpress' market leadership and unique capabilities are opening up the options we have to reach more customers through new channels via partnerships. The clearest validation of this opportunity is our partnership with Canva, which we announced in July. Canva reaches hundreds of millions of monthly active users who create billions of visual assets. We've launched an initial suite of Cimpress fulfilled products across North America, Europe, and Brazil, and the number of products is growing each month. For Canva, we provide a trusted, highly capable fulfillment partner with unmatched quality and geographic coverage. For Cimpress, this opens up a new scalable way to serve customers without acquisition costs.
As I mentioned in my annual letter, part of our design enablement strategic objective is to be able to turn beautiful designs into custom physical products, regardless of the source of the design, so this partnership is a clear example of doing exactly that. Over our history, we've deployed capital to acquisitions, and we've certainly made mistakes, but we've also had some very strong successes. One large group of successes is our Upload and Print reporting segment, where the cumulative cash flows since acquisition have far surpassed the $730 million we originally invested. Today, our acquisition playbook is based on what we've learned from prior experience, both successes and failures.
We look for highly rational tuck-in acquisitions that we expect to meet a threshold of 20% or better base case returns, and which strengthen our capabilities in elevated products, add focused production hubs, and/or integrate directly into our fulfillment networks to better serve high-value customers. Our most recent acquisitions and equity investments have been Mixam, Truyol, Print Alliance, and SAXOPRINT, and these have directly supported our strategy. For example, Mixam brings a new channel of customers for elevated products, specifically books, catalogs, magazines, that will bring volume to our focused production hubs. Truyol is a leader in Spain for high-end online printing. Print Alliance expands our Austrian capabilities for higher value customers. SAXOPRINT brings low cost producer capabilities for flyers, booklets, and similar products. Sean's going to spend some more time on our recent acquisitions in his presentation, including some examples of the financial results for these tuck-ins.
Now, let's move from growth drivers to efficiency drivers. Our manufacturing and supply chain capabilities remain an unmatched competitive asset, and we are strengthening that advantage to reduce our COGS while improving our quality and speed. We have an engineering first manufacturing culture that excels at lean production. We operate over 3 million sq ft of production space. Via our mass customization platform, which Maarten's going to discuss, we're now optimizing production across different businesses and different facilities. The capital equipment and the engineering initiatives in which we've been investing over the past several years will drive significant profit and cash flow growth in future years. We're already seeing financial benefits in some areas. In others, the startup costs which we are incurring are currently suppressing profits.
Those benefits, however, will be a material part of achieving our fiscal 2028 financial targets as the benefits come online at the end of FY 2027, and those startup costs roll off in fiscal 2028. As I mentioned, Maarten will cover MCP in a moment, and Florian in the manufacturing panel will share some more about our capabilities and what that is unlocking across Cimpress. Behind our manufacturing footprint and our customer-facing technologies sit the software backbone of Cimpress, our mass customization platform. Building out that platform required substantial organic invest. I'm not sure what happened. I seem to have lost my connection. Can I check someone from the-
Robert, you're all set. You're back.
Thank you. I apologize everyone for that glitch. I was saying that building out the platform we have has required a lot of investment. Today, that platform is more mature, it is increasingly battle-tested, and we are starting to generate substantial operational leverage from it. Many of our businesses have migrated or are in the process of migrating their technology to our mass customization platform microservices. That is for order routing, product catalog configuration, and automated pre-press. By doing so, we are eliminating duplicative software investments and reducing third-party software licensing. This continues with a next wave of standardization in customer experience platforms, and Maarten is going to provide examples of that as well in his presentation. Another lever for efficiency is deeper operational collaboration and capabilities sharing. Internally, for two years, we have been shifting towards a more balanced place on the scale between decentralization and centralization.
We are maintaining autonomy for teams where that is important for driving speed and innovation. On the other hand, in areas where the benefits of scale and efficiencies are clear and strong, for example, sharing technology infrastructure or supply chain management, our individual businesses are collaborating more deeply than they have done in the past. A great example of this is the tighter collaboration that is happening between Vistaprint, National Pen, and BuildASign, where the teams are working closer to share knowledge and capabilities in multiple areas, across tech, product launch processes, cross-Cimpress fulfillment, procurement, high-value customer service, and advertising optimization. Once again, you will hear more about this in other sessions. We also saw that we have a pre-submitted question on this topic, so Florian, Bryan, and I will discuss this further during the Q and A session.
Note that this type of increased collaboration is also happening in our Upload and Print reporting segments, but for the sake of time today, we are going to focus the discussion on what we are doing with the businesses that you see on this slide. AI, besides having great opportunities on the front end, is also a central catalyst for operational velocity and efficiency, and we are cultivating a culture of active AI experimentation to simplify workflows, to reduce operational friction, to speed up execution, and importantly, to reduce costs. All of these AI implementations are seeking to generate direct measurable value both for the customer and for the Cimpress bottom line.
All across Cimpress, teams are embracing process simplification and AI in ways that make us stronger, and we have a panel discussion again on this topic where we will discuss many more examples, and how they also support our fiscal 2028 financial targets. In closing, what you are going to hear today is that we have entered fiscal 2027 with strong operational momentum, expanding competitive moats, and a clear line of sight to sustained earnings and cash flow growth. Throughout the presentations and discussions today, you will hear three consistent themes. Our strategy and our investments are growing customer wallet share and improving skill advantages. We have significant and clear actionable levers across both top-line growth and bottom-line cost efficiencies.
These levers directly support our financial plans for FY 2027 and FY 2028, establishing a firm foundation for ongoing growth beyond those two years in order to maximize our long-term intrinsic value per share. Before I pass it over to Maarten , we are going to share a video with you, which really brings to life, and brings you inside our manufacturing operations to better understand the scale, the technology, and the human expertise that powers tens of millions of customer deliveries every year.
In a world where AI will revolutionize so many aspects of all of our lives, including providing incredible productivity and gains to manufacturing, we are excited that Cimpress' core competitive differentiation is the mass customization of beautifully tangible physical products. These unrivaled capabilities are the heart of Cimpress. They always have been, and they enable our mission to help businesses build brands, stand out, and grow via customized physical marketing products and branded merchandising. Here is the video to illustrate that point.
[Presentation]
It was an awesome video. That is a good hype-up. Hello, everyone. I am Maarten Wensveen, and I am the CTO here at Cimpress, and I got the honor to operate our mass customization platform. As Robert outlined in our strategy in action, focused on both growth and efficiency. In my session, I will highlight how our operations and technology strategy supports those goals. At the core of our technology strategy is our mass customization platform, or MCP. It connects our businesses, production facilities, and third-party suppliers to share technology. To understand why that actually matters, consider the complexity of a customized product. A customer chooses a shirt, then selects different attributes like the size, the quantity, and the decoration techniques, like do I want it printed or embroidered?
Those choices then affect the pricing and how we prepare the artwork for the product, and which facility can actually produce that order. Now extend that across every product from business cards to packaging to apparel. That complexity runs through every capability you see here, from our site merchandising to our product catalog, manufacturing, and fulfillment. Every business in our entire industry has to manage this. With MCP, Cimpress can invest strategically in solving these challenges and leveraging those capabilities across our company. That means our businesses can introduce products faster and benefit from capabilities you would otherwise have to develop separately. It also helps us reduce our OPEX with duplicated technology removal or the use of our production network more efficiently. Really build once, share it across Cimpress. Now with that, I would like to give some examples of how that translates in business results.
MCP operates at a significant scale, with around EUR 3 billion of our Cimpress revenue flowing through this platform. Our businesses serve unique customers and markets, but they share the technology and production capabilities, and that helps them to launch products faster, access the lowest cost of production, and deliver consistent products every time across global markets. It also creates opportunities to bring new partners into our network. One example we are particularly excited about is our strategic partnership with Canva that Robert just mentioned.
Canva chose us to best serve its customers. Through MCP, we enabled the integration between Canva and Cimpress just in a matter of weeks. We could move that quick because we have already had the underlying tech capabilities in place. That is where the scale of MCP becomes a competitive advantage. We can use those shared capabilities and leverage our global scale and manufacturing supply chain capabilities.
Around 80 million of production measured as the cost of goods now flow between our Cimpress businesses. That is what the chart here on the left shows. We have started to increase our focus on using this established MCP capability to get more value from our combined production network. The benefit comes from both lowering production cost and new growth opportunities. Across Cimpress, these efforts have generated a cumulative total of more than EUR 50 million in incremental variable gross profits since our fiscal year 2024, when we really started pushing on this. That is the financial benefit highlighted here on the right. By using this production capability we already have, we can reduce the need for new capital investment or lower our production cost or expand our offerings faster. These are concrete benefits from connecting our businesses through our MCP.
You will learn some more powerful examples about cross Cimpress fulfillment in our manufacturing roundtable later today. We know that a broader product selection is very good for our customers, and it drives up sales, too. But in customization, adding product means handling all of these variations that I just mentioned. Material sizes, materials, sizes, decoration methods, and production requirements. What we have done through MCP, we have built a shared digital model of this world and all of its complexities. It captures the product details and manufacturing rules that our businesses need to sell and produce these products. The digital model gives our AI a powerful foundation, and our AI agents and our agents can interpret supplier information and map it into our product catalog standards, automating work that previously required people to do it all manually.
Once a product is in our shared catalog, businesses across the network can use that information to bring it to market faster. The combination of our industry knowledge, structured data, and AI lets us expand our catalog at a speed and scale we couldn't even achieve manually. The acceleration is already visible. Over the last 12 months, average monthly new products onboarded into our third parties has tripled from around 800 products to 2,400 products. The new products created by our businesses have more than doubled from 600 to 1,400 a month. At National Pen, the automated product setup process has gone from two and a half months to minutes, with the setup cost falling from $300 to $6 per product. Exciting.
With the progress we made in modernizing our technology over the years, we have the opportunity to share more of these capabilities across Cimpress and reduce the cost of building and maintaining similar systems separately. A good example is our Cimpress Experience Platform, where we basically taken the customer experience technology developed at Vistaprint and made it available as a shared platform, obviously connected with still to MCP. That means other businesses can benefit from the capabilities we have already invested in on the Vistaprint side, including design tools, personalization, marketing automatization, while keeping their own branding and customer experience. As we improve those shared capabilities, the businesses using the platform then also benefit from the same investment. That helps us deliver better features faster and reduce duplicated development and ongoing operational costs.
We have already migrated National Pen's first test market to the Cimpress Experience platform, with additional markets and brands expected to follow in the upcoming quarters. This is just another example of getting more value from our existing technology investment, extending proven capabilities across more of Cimpress. A nice other practical application of AI is using customer data to identify who is at risk of leaving and act to retain them. Vistaprint did a test across three European markets and showed encouraging results with an estimated annualized benefit of around EUR 700,000 in additional variable gross profit. What excites me is where we can actually take this.
As more businesses not only adopt MCP, but now also the Cimpress Experience platform, we have an opportunity to bring more of this consistent data into these models, improving our understanding of our customers and applying what we learn more broadly across Cimpress and across more and more use cases. As mentioned, can't say it enough, our manufacturing and supply chain network is a major competitive strength. MCP connects that network so our businesses can use its capabilities immediately at scale. Every customized order brings its own artwork and production requirements. We need to turn what the customer creates into something a facility can reliably manufacture. That is what you see here. We analyze the file, we check and improve the artwork, combining AI with human expert review and preparing the products for production.
MCP then connects that order to a facility with the right capabilities, taking into account geography, equipment, and that is our global infrastructure handled more than 30 million orders over 50 million customers annually. The value is in managing all that individual complexity through the shared technology. As we improve these shared capabilities, we can apply those improvements across the network everywhere immediately. If you followed our Investor Day over the years, thank you, by the way, for that, you have seen how we have applied AI to artwork processing, AKA how do you put this image on a physical product at volume? How do you do that at volume? Automating that work was essential to keep the cost manageable. We started with traditional machine learning models and progressed over time in deep learning and now use today's generative AI models, including LLMs and multi-model image generation models.
We have been putting AI to work in our operation for many years, and that expertise actually matters. Our teams have learned how to apply these models to the complexity of customized products and integrate them into real production workflows. Our artwork capabilities will continue to improve, but what is changing now is how broadly we can apply AI across Cimpress. Robert mentioned that, too. You have already seen examples in our product catalog expansion or customer retention, as I just mentioned. We are also applying it in developing AI capabilities in our customer service. How do we do software development, product search, pricing, promotion management? What excites me is the combination. Years of our practical AI experience, the data and the capabilities in our now more shared platforms, and the tools that more teams can now use.
That gives us more opportunities to improve how we work and how we serve our customers. The thread through all of these examples is that we're getting more value from the capabilities we've already built by sharing them across Cimpress. MCP and the Cimpress Experience Platform gives us a common foundation. AI helps us to do more with it, increasing engineering capacity, accelerating product launches, making customer interactions more relevant, and lowering the cost to maintain and invest in these capabilities. You've seen some concrete results today, and our opportunity now is to extend those benefits across more of our businesses and more of our operations, supporting growth while lowering the cost of delivering it. We'll explore that further also today in our AI roundtable, with leaders putting those capabilities actually to work. With that, thank you. I'd like to hand it over to Florian.
Good morning, everyone, and thank you, Maarten. I'm Florian, the CEO of Vistaprint. Over the past year, Vistaprint delivered consistent revenue and EBITDA growth and is on track to support Cimpress' FY 2028 target of at least $615 million in adjusted EBITDA. Today, I'll show you what powers our current momentum and where we're focusing to drive profitable growth. In my presentation today, I'm going to cover three things: our ambition, how we're winning with high-value customers, and our five priorities for sustained profitable growth in the future. At Vistaprint, our ambition is to be the leading destination for small businesses' custom print needs from design to print. To us, that means much more than just fulfilling an order. We want to be their number one print partner for every print need, occasion, and stage of their growth. We achieve this with four things that set Vistaprint apart.
One, we're truly a one-stop shop. Our breadth of assortment allows us to meet the diverse needs of all types of small business customers. Two, we enable them to design in any way that works best for them. Whether they prefer designing using an AI tool or start with one of our templates, work with a human designer, they can do it all with ease on Vistaprint. Three, we offer the best assurance and advice, no matter where customers are in their journey. Four, we invest in and harness the power of the Cimpress manufacturing and supply chain network that Robert described earlier. So let's now talk about how we're winning with high-value customers. To see what working with Vistaprint looks like in practice, let's hear directly from the businesses we serve.
[Presentation]
Yeah, I love that reaction at the end from Madeline. That is what happens when we deliver across a customer brand presence, from tablecloths and totes to custom apparel. Obviously, winning a customer's first order is just the start. Our goal is transforming first-time buyers into high-value, long-term relationships. Look at Sourmilk, for example, a New York art startup. When they joined us in 2025, at the time with just two employees, they needed a professional brand fast. As they expanded into pop-ups and major events, we scaled right alongside them, supplying banners, table runners, stickers, and apparel. Sourmilk is not an isolated success story. They represent our primary growth engine, customers generating at least $650 in annual gross profit or VGP. We are tracking approximately the same $650 threshold as last year, representing our top 2%.
In fiscal 2026, this group generated 32% of our total VGP, compounding at 17% annually. That growth is happening across both volume and value. VGP per customer grew at a 3% CAGR, while the number of customers in the segment grew at a 12% CAGR. Just like Sourmilk, these customers rely on us far beyond business cards. Categories like signage, apparel, and promotional products driving the relationship. These $650+ VGP customers represent what we can achieve with our value proposition and the differentiators that make Vistaprint unique. They buy from twice as many product categories, they order almost six times more per year, and they spend 3.4 times as much when they do. So net, they buy more broadly, more often, and in larger orders. A question that I often get is: Are these $650+ customers all new customers?
The answer is that the growth is coming from both new and repeat. In other words, we are attracting new high-value relationships while developing those we already have, and that gives us two opportunities to build on, not just one. Let us take a deeper look at new customer acquisition. Higher value customers enter across a far broader set of categories. Promotional products, apparel, signage, and marketing materials are their primary entry points, so we are not dependent on business cards to attract high-value relationships. Let me bring this all together. Cumulative value per customer is compounding because our high-value customer engine is working. Our $650+ VGP customers drive this expansion across every dimension, buying broader, ordering more frequently, and spending more per order. Importantly, the majority of the segment comes from repeat customers with whom we are expanding our share of wallet over time.
Let us now turn to our key focus areas to accelerate profitable growth. We are executing on five priorities, and I will dive into each one in turn, starting with the one on the left, high-value customer growth. There are three parts to this: expanding our assortment of elevated products, making it easier for customers to discover, design, and buy, and providing tailored assurance and advice. As Robert already mentioned, elevated products are key to capturing a greater share of our customer spend. Categories like packaging, labels, apparel, promotional products, and signage are driving our year-over-year VGP growth, particularly among high-value customers. This directly proves that our targeted investments are paying off. In FY 2026 alone, we launched more than 5,100 new products, focusing heavily on elevated ones. Process automation and the Cimpress network helped make that scale possible. Adding products is only part of the answer.
Customers also need to discover, design, and buy them easily. That is why we are making ongoing optimizations to improve the experience for elevated product purchases. We are making it easier to apply designs across our product range. We are improving sampling so customers can see and feel complex products before making larger purchases. We are also making it easier for customers to bring designs created elsewhere into Vistaprint, with a special focus on streamlining the path from AI-driven design to print. We are personalizing the customer journey through better recommendations and conversational shopping experiences. In fact, in FY 2026, the share of VGP generated through personalized placements increased 21% year-over-year. Taken together, these investments make our broad offering easier to use, and they enable the one-stop shop that we want to be for all of our customers.
While we deliver great service to every customer, we also know that high-value customers often have more complex needs that benefit from dedicated human support. That is where our high-value account teams come in. Using real-time data, we intervene proactively the moment a customer gets stuck or wants help, guiding complex orders from artwork through to delivery. That is not just great service. It also makes sense commercially. In fact, in FY 2027, these specialized service teams are projected to generate $8 million in incremental VGP. The proof is not just the dollars. The proof is also in the feedback that we get. Hundreds of five-star Trustpilot reviews mention our team members by name. That is how we earn trust and build lifelong customers. Moving on to our second priority. That is manufacturing, expanding our capabilities for growth while driving efficiency.
Starting with the growth side, we continue to expand our assortment of elevated products. In FY 2026, we launched in-house production for corrugated boxes and luxury bags in Europe, and we are now establishing a dedicated food packaging hub in North America. To maximize our returns on capital, we leverage cross Cimpress fulfillment. That happens in two ways. First, we broaden our catalog without spending extra CapEx by sourcing products from sister companies with focused production hubs. That could be booklets from Pixartprinting, or it could be signage from BuildASign. Second, we fill our own focus production hubs, like the European luxury bags and corrugated box lines, by fulfilling orders for sister brands across the group. Cross Cimpress fulfillment, therefore, gives us a massive structural advantage, driving higher margins, higher asset utilization, and better capital efficiency.
Beyond Cimpress fulfillment, continuous cost discipline inside our own facilities is an important part of our manufacturing agenda. In FY 2026 alone, that operational discipline delivered about $8 million in cost savings. It was driven, for example, by packaging and carrier optimization, scrap reduction, higher labor productivity, and leveraging Cimpress procurement for equipment and material purchases. I am now going to turn to our third priority, marketing ROI, and that is about maximizing the efficiency of every dollar we deploy across the entire funnel. I am going to start at the top of the funnel.
Vistaprint starts from a position of strong brand recognition. We are the number one in prompted print awareness among small businesses in the U.S., France, and the U.K. While that brand awareness gets us in the door, sustained growth does require building deep brand relevance, and that is the role of our refreshed brand positioning. Print Your Possible is our new creative platform, and what it does is it taps into that joy that our customers feel when they turn their ideas into something tangible, from a custom T-shirt to a storefront sign to premium packaging and marketing materials. I suggest you see for yourself. Let us take a moment to watch our brand hero film.
[Presentation]
Yeah, as you can see, we don't just print our customers' logos. We print their purpose and their passion, and really want to see them for much more than just business cards, but across the entire physical marketing, from signage to apparel and branded merchandise. Let's move further down the funnel to performance media. A lot going on there. We use rigorous incrementality testing and, in some countries, order level LTV prediction to channel capital into high return areas. In search of strong returns, over 25% of our performance spend is now in social media and video formats. At the same time, we're also an early mover in AI advertising. We joined OpenAI's advertising pilot at launch in February, quickly becoming a top 10 global advertiser by spend. Our full product catalog is connected, and we're executing a U.S. conversion lift study to measure incrementality.
That is in addition to our existing presence in Google AI Mode and Microsoft Copilot. Frankly, the objective across every channel is very simple, to maximize cohort LTV by acquiring higher value customers upfront and expanding our relationships with existing ones. Our fourth priority is AI-enabled simplification and automation. We are using AI across the entire organization to deliver outcomes faster and more efficiently. Every logo that you see on this chart was designed directly by the team leading that project, and I couldn't be prouder of the grassroots ownership our people are showing. This is a broad-based transformation touching every function across Vistaprint, from software engineering and analytics to marketing, creative, customer care, all the way through to finance, HR, and manufacturing. These aren't just theoretical pilots.
Behind every achievement on this chart, there is a practical change to how we operate, delivering real benefits in execution velocity, cost efficiency, and growth. That brings me to our fifth priority, to build a resilient future-ready organization. We want to build the most entrepreneurial culture, one where people take ownership and innovate on behalf of our customers. We've, in fact, always believed that innovation must be part of running the business, not separated from it. Our Vista Behaviors provide that foundation. One year after launch, we've seen high engagement scores in adoption, application, and awareness. The Vista Behaviors aren't just something that we talk about. They're woven into how we work every day, from the questions that we ask in interviews to how we evaluate performance, share feedback, and celebrate success.
In light of the massive opportunities ahead on our AI journey, we are building capabilities across three pillars: AI skills, leadership development, and future-ready competencies. First, AI skills. We're driving active AI engagement and upskilling across the entire organization. For example, we launched an AI development goal requiring every team member to build automation directly supporting their role. Our teams have completed over 5,000 AI courses, and more than 800 employees have engaged in hands-on building through our workshops. Today, our peer learning community spans over 1,500 team members, sharing daily use cases to transform how we work. Second is leadership development. In FY 2026, close to 90% of our managers completed foundational leadership training focused on instilling an entrepreneurial culture. Third, future-ready competencies. In FY 2027, we're launching targeted training in nine essential skills, including systems thinking and resilience, to keep our workforce agile.
And to be clear, the goal here isn't training for the sake of training. It's building teams equipped with the capabilities to leverage technology, move faster, and deliver bottom-line results. So let me bring it all together. We have a clear strategy, a high-value customer growth engine across both new and repeat customers, and an increasingly efficient operating model. By executing on our five priorities, we're driving durable EBITDA expansion and building a stronger, more profitable Vistaprint. Thank you all for your time today. With that, I'll hand it over to Sean.
Great. Thank you very much, Florian. Appreciate it. Good morning, everyone. It's great to have you all here. I'm going to finish, before we go onto the panel discussions, with a financial review session. In this next roughly 30 minutes or so, I'm going to largely focus on the path that's ahead of us for the next two years to deliver on the outlook that we've provided. We think it's an exciting one. It involves substantial profit and cash flow growth. It's a path that, as you'll hear, we remain very much confident in, and it has the management team's full focus. I'm also going to touch on our capital allocation priorities as I normally would.
This year, I'm going to take a specific double-click on tuck-in M&A, just given we've had some more activity there recently and some more questions from investors of the path forward there. So I'll spend a little bit more time there than I have in the past. First, as Robert referenced earlier, too, I just want to reiterate our commitment to our uppermost financial objective, and that's to maximize our intrinsic value per share. As I go through the slides that follow here, I'm going to talk about other metrics, and that includes our multi-year adjusted EBITDA targets. We've shared those targets, again, as Robert said, because we think it's helpful to have a public, very measurable milestone on the path to our significantly higher per share free cash flow that holds us accountable and, hopefully you agree, gives you a concrete way to track our progress.
And we would never pursue the targets that we're talking about in a way that sacrifices our ultimate objective. As you can see from the charts here on this slide, over time we've had both substantially increased free cash flow, and we've also reduced our total shares outstanding by nearly 50% since the time of our IPO. Based on the plans that we're going to review today, if you just do the math, we expect our free cash flow per share to be roughly $11 per diluted share at the end of fiscal 2028. At least in my view, I think that that's clearly not reflected in our equity value today. So turning to the next slide. One year ago at our Investor Day, for the first time, we outlined a three-year plan to demonstrate substantial profitability and cash flow growth.
The reason we did that is we felt like it was important for us to make that clear in terms of the financial progress we would make following a period of strong operational progress and also investments to enable the financial progress that we had expected. The first year of that plan was FY 2026. I will briefly cover the highlights of last year in a minute, but I think the headline there is that our growth and adjusted EBITDA was ahead of what we guided to one year ago. At the end of July, for the first time, we introduced our specific FY 2027 guidance, which is for at least 7% reported revenue growth and 3% organic constant currency revenue growth. We expect significant growth in our adjusted EBITDA to at least $520 million and free cash flow to approximately $200 million.
These results, importantly, will start to more meaningfully reduce our net leverage, as you will see in a later slide. I am going to walk through the drivers of how we get there so that all this becomes more tangible for you. Moving then to FY 2028, we expect the investments that we have made and also the cost savings initiatives that we are executing on to be approaching their full run rate. We expect 4%-6% organic constant currency growth, at least $615 million in adjusted EBITDA. That, I should note, is up from the at least $600 million target that we established at last year's Investor Day. Then we continue to expect adjusted EBITDA to convert to adjusted free cash flow at approximately 45%.
That is roughly $277 million of adjusted free cash flow as our profitability significantly increases, but also as our heavier period of CapEx starts to moderate. That will allow for another meaningful reduction of our net leverage to below 2.0 times our trailing 12 months EBITDA. Of course, all that is subject to capital allocation choices. One of the themes that you will hear me repeat a few times in this session is that the profit and the cash flow growth builds as we move through the next two years. That ramp really starts in Q2 of this year as these things start to take hold. Also, M&A starts to be a more material contributor. We expect that to continue really for the next seven quarters. We are confident that we will deliver on our plans.
On this next slide here, I am just going to outline four reasons why that is the case. First, Cimpress has delivered profitable growth for over two decades. We have constructed these expectations to be achievable. That is why we use this at least framework. Guys, can you go to the next slide? Yeah, thank you. Just of note here, as I said before, we increased our FY 2028 target from the at least $600 million that we gave last year to the at least $615 million that we are reiterating today. The second one is that delivering against these targets, it is the top company priority, and we really used it as an organizing framework for our strategic initiatives and our operating plans. You would see that in our regular cadence of operating rhythms that we have. You would see it in our internal comms.
We have an ambitious agenda, but with a clear governance, and that's also something that we review regularly with our board to maintain rigorous oversight on our capital deployment of our strategic initiatives and also all the efficiency projects that we have as well. The third thing is that our leaders are compensated primarily through performance-based equity, and those performance criterion are tied directly to these plans, and our internal performance targets are actually set higher than what we've committed to externally. Lastly, we believe we have a clear line of sight to reaching these goals, and a lot of that comes from the fact that the heavy lifting on foundational investments is largely behind us, and now our focus is fully on the required execution.
The time, the effort, and the capital, which has been substantial, that we've allocated to these growth and cost savings initiatives, it is really meaningful, and as you'll see in a moment, the vast majority, at least in my view from here, is really an execution story. Starting with a quick overview of fiscal 2026, and I'll be relatively brief here. We delivered 10% reported revenue growth and 4% organic constant currency growth. That was above the expectation that we had set for the year. Our adjusted EBITDA was $458 million, also higher than the guidance we provided at last year's Investor Day. Our adjusted free cash flow was $122 million. That was weighed down somewhat by higher levels of CapEx, that CapEx directly supporting the strategic and financial targets that we have. Also slightly less favorable working capital timing than we had expected.
We ended the year on track with our leverage guidance, which was 2.9 times trailing 12 months EBITDA as defined by our credit agreement. I think the summary there, year one, we did what we said we would do. In terms of proof points, as you've heard in some of the earlier presentations, we've made meaningful progress with elevated product and high-value customer growth. One of the things that I think doesn't show up in the numbers is that there was significant foundational progress that was completed in this last year that enables future growth and cost savings over the next two years. That's really important. We also closed four tuck-in acquisitions that I'll dive into in more detail later. Those will contribute meaningfully to our plans.
The higher contribution from M&A is why we increased our fiscal 2028 adjusted EBITDA target that I earlier mentioned. Now let's turn to fiscal 2027, the year that we're now in, and you can see here a bridge of how we expect to accomplish our fiscal 2027 guidance. The bridges that I'm going to go through now is a new level of detail, and hopefully you'll find to be helpful. The bridge here starts with our fiscal 2026 actual adjusted EBITDA, that's the $458 million, and walks over to our guidance of at least $520 million for fiscal 2027. Walking from left to right here, the first bridge item is the $18 million-$21 million of adjusted EBITDA growth that we expect from tuck-in M&A.
That is a combination of the fact that we have a full year of results from the standalone businesses that we purchased last year, and also the one that we closed at the very beginning of this fiscal year, SAXOPRINT, but also the increasing synergies as we advance through the year and integrate these businesses into the Cimpress network. That number is consistent with the commentary that we gave with our year-end earnings, and I would just say we remain very much on track here. The second bridge item is $5 million-$10 million of year-over-year benefit from currency. Those benefits are contracted and therefore also very much remain on track. The third bridge item reflects the increased year-over-year start-up cost for our North American production network, and this is enabling substantial future cost savings. You're going to see that in the fiscal 2028 bridge I'll go through next.
It will be a higher investment in fiscal 2027 compared to last year. So that's a drag, and that drag will reverse in fiscal 2028. Next, we expect the in-year impact of our cost savings initiatives to contribute $25 million. The plans for these are in place. There'll be action throughout the year, and so that is the in-year impact. The remaining $11 million-$19 million is the minimum adjusted EBITDA needed from organic contribution in order to achieve our guidance of at least $520 million. That results in full-year adjusted EBITDA growth of at least $62 million. As a reminder, because we've used this framework last year as well, this minimum required from organic growth is the minimum.
Rather than the specific amount that we expect, that is the minimum that we need to make this bridge work, and really this construct is a what do you have to believe as an investor to believe we can hit these numbers, and hopefully you believe that that is a very reasonable amount in that last item of the bridge. Importantly, we also expect free cash flow growth to be about 60%, based on our guidance of approximately $200 million. As I said before, that's the combination of two things. One, profitability growing, and that dropping through to free cash flow. Our CapEx levels will remain similar to last year. So that'll still be at an elevated level. As noted, these contributions will ramp through the year.
Q1 also carries a higher amount of that plant startup cost year-over-year, so we expect the weight of these initiatives to really build from Q2 onward. Let's now do the same thing for fiscal 2028. Here again, I'll start with fiscal 2027 baseline of the $520 million that I just went through, and then I'll walk that across to our raised fiscal 2028 target of at least $615 million. First, we expect a contribution from Tuck and M&A to contribute an additional $10 million in adjusted EBITDA. The reason for that is that our synergies here will continue to build, and so we'll be at a full run rate for fiscal 2028 or almost a full run rate. So that's really driving that growth there year-over-year.
Essentially, these things become organic contribution as we anniversary the acquisitions, but we thought for purposes of the bridge, it was clearest that we keep that separate for this purpose here. I should also mention that this does not assume that we deploy additional capital to M&A in fiscal 2028. Next, the plant startup cost that I talked about in the last slide, tied to our North American production network expansion that weighed on profitability in fiscal 2026 and also in fiscal 2027, will roll off and that provides a $10 million uplift in fiscal 2028. The largest contributor to adjusted EBITDA growth here comes from our cost savings initiatives, where we unlock the remaining $50 million in benefit. Across the three years, this delivers at the high end of the $70 million - $80 million range for cost savings that we outlined at last year's Investor Day.
We feel good about the execution against that. A lot of those cost savings initiatives will have been executed as we exit fiscal 2027, but the full-year impact will be impacting fiscal 2028. Finally, we need at least $25 million of organic growth contribution, and that's supported by the initiatives that you heard about today, including our elevated product growth, leveraging recent CapEx investments, including the ones that we're doing this year, wallet share gains with high-value customers, growth in Cimpress fulfillment, and also growth in new channels like the Canva partnership. Together, that brings us to our fiscal 2028 target of at least $615 million in adjusted EBITDA. In Robert's opening session, he outlined our growth and efficiency initiative. I'm going to turn back to those now to demonstrate how those support these numbers.
In Robert's, again, same framework that Robert used here. I'm not going to go back through the strategy component of this. I just want to connect it to the numbers that we just went through. The recent investments that we've made behind these four drivers here position us, we believe, to deliver the organic growth for fiscal 2027 and fiscal 2028 that is required by those targets. Again, it's an at-least framework, and so we believe we can do more than that. Just briefly, those drivers that Robert went through are wallet share with our highest value customers, which as you saw in the Vistaprint session, is really the primary engine of our profitability growth there. Elevated products, where we're shifting mix into higher value categories and leveraging cross-Cimpress fulfillment to do so. Our Vistaprint packaging and labels category, I think, is a great example.
Grew 33% in fiscal 2026, starting to get to a larger scale. New channels like the Canva partnership and also our Upload and Print expansion into the U.S., which is enabling growth in Vistaprint as it gets access to products that we didn't previously produce in North America. So really there we're getting access to the manufacturing innovation and know-how that Pixartprinting has established for years in Europe. Paolo will talk a little bit about that in one of our panel discussions. Finally, Tuck and M&A, which I'm going to come back to separately. If you take these together, these are what support the organic contribution in our bridges. So now let me turn to the efficiency side of things, which is the larger driver over the next two years. On efficiency, it's really a story of timing and phasing.
FY 2026, I would say, was primarily a foundational year. There was modest financial impact, but it was really a foundational year to enable the next few years. Now the contribution starts to build as we get into Q2 here of this fiscal year and for the next seven quarters. There are four main initiatives or categories of initiatives. Manufacturing supply chain excellence is a significant contributor, and that comes through our COGS savings. There are a few things that drive that as we expand our North American network, but also as we shift volume to focused production hubs and also in-source from third parties.
I think one of the markers of that, and Maarten referenced this in his slides, we have had a 50% increase in the volume flowing over cross-Cimpress fulfillment last year, which is the enabler for the start of a lot of those cost savings. The other three you see here, they all reduce OpEx. That is standardizing technology, leveraging our mass customization platform. It is increased collaboration across Vistaprint, National Pen, and BuildASign, and also AI-driven simplification, which we will cover in a later panel that I will moderate. Together, those make up the majority of the total savings. Again, those three on the OpEx side. These ladder directly to our targets. We had $3 million of benefit in fiscal 2026 from some actions that we had taken towards the end of the year.
We have in total, $25 million of incremental savings in the fiscal 2027 bridge and another $50 million in fiscal 2028. As we execute on these plans, just turning to how this impacts our balance sheet, we will have further strengthening of our balance sheet, but also this will provide more capital allocation flexibility as well. If you look at the chart here on the left, our expanding EBITDA and the strong cash flow generation that we expect will reduce our net leverage from 2.9 x at the end of fiscal 2026 to approximately 2.5 x exiting fiscal 2027. We have the opportunity to be below 2.0 x exiting fiscal 2028. On the right is our debt maturity profile, and that is in excellent shape. I just want to touch on that briefly.
We did refinance our term loan B back in May, so our high-yield notes and our term loan B both mature in fiscal 2033. They happen to be in different calendar years, but the same fiscal year. We also ended last year with strong liquidity from a cash and cash equivalents perspective, but also a $250 million revolver that is undrawn, so strong liquidity and no material maturities until fiscal 2033. The balance sheet is in good shape. As we increase the balance sheet flexibility that we have, we are also going to unlock meaningful capital allocation optionality. Our primary use of capital, as it has been, will remain funding high ROI organic opportunities, funding innovation, funding capital capability enhancing projects, and we will continue to do that at disciplined hurdle rates.
I think both last year and also this year, the way that comes through most notably is in our CapEx investments, which have been higher. Last year at Investor Day, in my slides, I went through some very specific examples of the return and payback profile of these types of investments. If you go back and look at that, the headline is very strong, high-probability outcomes. It is at the center of our core competency. We do expect that after higher CapEx in fiscal 2026, and then also in this year, fiscal 2027, that that would moderate as we turn to fiscal 2028. If you think about organic investment overall over these next two years, we would not expect an increase to organic investment levels relative to fiscal 2026. But in fiscal 2027, there is still a pretty high pace of CapEx investments.
On the buyback front, this is something that we look at on an evergreen basis. We will continue to be disciplined here, and importantly, continue to really look to match intensity of repurchases with the gap between our share price and at least our view on intrinsic value. But we will do all that while we manage to our net leverage commitments. I would say that within those net leverage commitments, we do have room for repurchases while still meeting that guidance. So this will be something we will consider on an ongoing basis, and I would expect to play a role in our capital allocation to some extent over the next two years.
Then there is M&A, and we do continue to not anticipate doing individually material acquisitions, but tuck-in acquisitions and equity investments have proven to be an attractive use of capital for us, and importantly, not only a good use of capital, but also directly supporting our strategy. We did have a pickup in activity over the last year here. Given that, we thought it was appropriate to cover this topic in a little bit more detail this year. It is a viable avenue of high-return capital deployment in the future as well. So we just want to walk through how we approach this, why it makes sense for us, and also the return profile of some of our past transactions. So let me start by saying that I think there is really three main reasons why we believe this is an interesting opportunity for us.
The first is that, and this is fairly obvious, just given our role in our market, we have very significant advantages and assets that we can exploit. The businesses that we acquire plug directly into our scale-based advantages. They plug into our shared capabilities. They can operate with our other businesses, leveraging cross-Cimpress fulfillment, and all of that reduces our COGS, while also providing for revenue opportunities across our portfolio through new product introduction. The second one is that we can acquire, we have been able to acquire these businesses at compelling valuations relative to post-synergy cash flows. There are two parts to that one. One is our advantages that we bring, which clearly help the post-synergy cash flows.
I think the other one is that we operate in a maturing, highly fragmented market, and we think that that market dynamic will only make these opportunities more prevalent in the years to come. All of that together allows us to have a target base case IRR for these tuck-ins of 20% or higher. Then lastly, in this area of tuck-in acquisitions, we have a proven track record, and we haven't talked as much about some of these, because they tend to be on the smaller side. But these we do have a proven track record with, and I would say that they have been high-probability outcomes. The other thing is that they can leverage our existing management bandwidth, which is important. So these transactions have, at least recently, broadly fallen into three buckets. One is opportunities for further vertical integration.
The next is where a company has unique manufacturing or product capabilities that can be leveraged into our existing businesses or furthered into our existing businesses. Then suppliers that have material Cimpress volume that they fulfill and that we have experience with, and we can further vertically integrate there. The acquired businesses, as I said, plug into the Cimpress network and scale advantages. There are some specific advantages that we bring to these acquisitions, and sometimes they bring to us, no matter what archetype they fall in. So I just wanted to cover this at a high level here. The first one, again, probably the most obvious, is procurement synergies. This is where we leverage our group scale to lower our input costs, and that happens across raw materials, across freight, logistics, capital equipment, consumables.
Acquired businesses are able to leverage that scale and our established relationships to reduce cost. This can happen very quickly. So these are very quantifiable, and we can action these very quickly. They're also oftentimes very significant. Our manufacturing and network optimization, by routing like for like orders to focus production hubs and doing that more and more through cross Cimpress fulfillment, we can meaningfully lower unit production cost and also fill plant capacity. That's also allowing us to forgo CapEx that we would have otherwise spent. So that's an important one. From a vertical integration perspective, we're able to in-source volume that was previously fulfilled by third parties oftentimes, and that allows us to eliminate margin stacking, and also gain operating control over that volume.
I think the other benefit there is that the more volume that we can put through focused production hubs then has a compounding benefit for our existing businesses as well. From a new products and channels perspective, acquired product capabilities are leveraged across Cimpress brands, and that allows us to accelerate the launch of elevated products at lower cost. I'm going to share an example of that in a moment. But also allows us to offer those products that we previously didn't offer, but we can offer them to customers that are already familiar with the services that we provide, which means that we can get to market quicker. We sometimes also get access to new distribution and channels, and we're able to leverage our strong production into those new areas of distribution or new channels.
The last is just tax optimization as we integrate these businesses into our global corporate and financial structure. Not integrate fully operationally, but integrate them into our corporate structure, we are able to optimize cash taxes, and that can contribute to post synergy free cash flow generation as well. On this slide here, you can see the four tuck-in acquisitions that we have completed over the last year. As we said when we disclosed these, throughout last year, for all of them, we expect base case IRRs that are 20% or higher. Here on this slide, you can just visually see how each of these also fits with the strategic objectives that Robert reviewed at the outset today. Those are growth of elevated products, design enablement, and manufacturing excellence.
Across these four acquisitions that you see here, we deployed $117 million in net cash for the SAXOPRINT acquisition, which is the most recent. That is net of sale leaseback proceeds that we expect to get on their real estate. That $117 million of invested capital acquired $235 million in trailing revenue and $21 million in trailing EBITDA prior to synergies. In this fiscal year, we expect these businesses to contribute to growth of approximately $170 million in year-over-year revenue. As I said in the bridge, $18 million-$21 million in adjusted EBITDA, with profit and cash flow scaling further as we unlock synergies. I am going to touch on two of those four, and the first one is SAXOPRINT. That is the most recent one we have done. It is the largest of the four. It is part of our PrintBrothers reporting segment.
SAXOPRINT directly advances our manufacturing and supply chain objective while also further enabling us to lower the cost to produce high-value elevated products. They bring a state-of-the-art, and you can see parts of this here on the slide, state-of-the-art, almost 260,000 sq ft production facility that is based in Dresden, Germany. That facility is engineered specifically to be the lowest cost producer for key elevated products like flyers, booklets, brochures, catalogs, magazines. The value creation on this one comes really from optimizing network scale. We are already shifting volume to SAXOPRINT as a dedicated focused production hub for its core product strengths. We are rerouting, in the other direction, non-core items from SAXOPRINT to other focus production hubs across Cimpress. Then we are expanding new product offerings across our broader customer base, and we are doing that through cross Cimpress fulfillment.
Finally, as is the case with all these, we will optimize procurement, leveraging our combined scale. For SAXOPRINT, we are very excited about the synergy opportunities here. We actually expect that the synergy opportunities will be greater than the trailing standalone business results, just to put that impact in perspective, and those will ramp over time, including ramp throughout this year. On Mixam, a little bit of a different profile here. We acquired a 50% controlling stake. This operates within The Print Group segment. The core value driver here centers on design enablement and also expanding elevated products. Mixam provides a market-leading e-commerce workflow that simplifies the creation of books, catalogs, and magazines. Very difficult to design historically. They do an amazing job of it.
They use AI-powered layout tools and automated pre-press quality checks in order to do that and make it easy for the customer. On the synergy front, Mixam had previously relied 100% on third-party outsourced fulfillment. We had done a part of that as well. By insourcing a significant part of that production volume directly into our existing Print Group facilities, including the new one for Pixartprinting in the United States, we are able to immediately capture improved gross profit margins on that existing volume. We will also expand Mixam's catalog by introducing new physical product options from our broader Cimpress network through cross Cimpress fulfillment. That work has already started. Here again, we will leverage our consolidated purchasing scale to drive procurement cost savings as well. Finally, those are recent deals we had done.
We thought it would be helpful to just go back in time a little bit and take two prior tuck-in acquisitions to demonstrate how these have worked. Here I have chosen, the first one I will go through is in North America. The second one you do not see on the screen yet is in Europe. Each of these falls into a different archetype. I think these are a pretty good representation of how these have worked for us in our recent past. This first example here is an acquisition that we did in 2021. It was in the United States , and this allowed us to push more deeply into the packaging category. You hear us talk about that and with elevated products, very relevant there, also very relevant with high-value customer growth.
Customers that are purchasing these products display a higher propensity for repeat purchases, but also purchasing across other categories. So a great product for us, and we wanted to push more deeply into it in the United States and broader North American market. The annual revenue has grown from $6 million at the time of the acquisition to $18 million. More than half of that growth is coming through cross Cimpress fulfillment, fulfilling for Vistaprint. This was a net new product for us, and so all that is incremental. Importantly, last year's revenue growth for this business was 33%, and the EBITDA margin was 25%. The free cash flow at the time of the acquisition was just a few hundred thousand dollars. Last year, they did $5 million if you include the benefit that sits on the Vistaprint side, and our invested capital was $17 million.
While the free cash flow yield was about 30%, when you have a business growing over 30% with EBITDA margins of 25%, there is clearly a lot of room for that to increase further based on that growth and margin profile. So, a great example. Example two that you now see on the screen here is a business in Europe. It is a business that we acquired in 2020. Invested capital was $8 million. Different profile. It was an existing supplier that we knew well, that we vertically integrated to capture very highly accessible operational synergies, also to avoid future CapEx in our own facility, which you do not see factored into these numbers. The growth here also was catalyzed by cross Cimpress fulfillment. Last year, it generated $3 million in free cash flow.
That represents just under a 40% annual cash flow return on the consideration that we paid, and that brings the cumulative free cash flow to $13 million. That $13 million, when you compare it to our invested capital, it's 60% more than the invested capital. Very strong returns. Return on equity is sort of incalculable. Ultimately, as we evaluate these types of acquisitions, we do that based on the free cash flow yield.
We also do that, as I said for this last one, based on the cumulative free cash flow that we have generated relative to invested capital. If we're able to buy at attractive multiples of profit and free cash flow, and post synergies, oftentimes we can cut those multiples in half. We can get benefits through cross Cimpress fulfillment, then these can be highly attractive uses of capital that complement our organic growth and investment. With that, Meredith, I will turn it back to you.
Wonderful. Thank you, Sean, and thank you for that deeper dive on M&A. I know our investors will be excited to have heard that. I do have a housekeeping note for attendees right before we take our quick break. A PDF of the slides that you have seen this morning is now available in the webcast viewer, though you will need to refresh that viewer in order to have those show up. Those are now available now that we're through the entire set of prepared remarks. At this point, we're going to take a 10-minute break. Please grab another cup of coffee, stretch your legs, and then definitely make sure that you come back, because after the break, we have some wonderful panel discussions and a Q and A session with leaders across our business. Thank you.
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Welcome back to Studio 54, I mean Cimpress Investor Day. I hope you enjoyed your break or the great energetic music that we were just playing during the break. Let's get started with our first panel discussion on manufacturing and supply chain excellence as a driver of growth and efficiency. This will be hosted by Robert.
Hey, thank you again, Meredith. As discussed in the main section by myself and several others, our manufacturing supply chain capabilities really are world-class and unmatched. In this session, I am really happy to have three of our executives here today, to give you a little bit more depth on what we mean by that, including some really specific examples. I am here with three people, Bryan Kranik, who is CEO of two of our reporting segments, National Pen and BuildASign. Michael Fries, who is a member of the Vistaprint executive team. He also importantly leads Vistaprint Europe and, in terms of this session, something directly relevant to the session is he leads manufacturing for Vistaprint overall. Last but not least, Paolo Roatta, who is CEO of our Print Group reporting segment, and that includes Exaprint, Pixartprinting, Packstyle, Tradeprint, and Easyflyer.
There is a lot of opportunities here that we could talk about, but we have mentioned the importance of elevated products to our strategy because they are so valued by high-value customers. What I would like to do is do a little bit of a round table here. I may come back to some of you a few times. But maybe starting with Michael, could you give maybe two examples of what you have been seeing happening in. Maybe we start with one example, then I will go to some others, and we will come back to you, of some elevated product development that we have done.
Hello, everybody. From the Vistaprint side, a strong focus of the last months has been implementing paper bags capabilities in Europe and now also in North America. Meaning on the one hand, standard paper bags that would be used in food takeaways and other applications, but also now luxury paper bags. More high-end bags that can be used in many different businesses. Our value proposition is the value proposition that we are really strong in making small quantities available very fast, so that people require less disposition, less warehousing, less commitment to a product.
They can use a product, and even a personalized and individual product in smaller quantities. But if they want to use that in their everyday business, they can also repeatedly buy from us on demand as they need them because we offer a strong pricing position. We bring together our mass customization capabilities with new products and enable new products in the way we have enabled other products. This has been launched first in Europe and is now, as I said, coming to North America.
Great. I know we do not go into competitive details on how we do this exactly for confidentiality and competitive reasons, but diving into what you said was this is different because of its ability to do low quantity. We are not just coming in and doing standard bags like many, many other people do. Can you describe the tricks of the trade, so to speak? What have our engineers been able to figure out how to do that the industry currently does not do?
One thing is making sure, as Maarten has explained, that we have strong data flows so that we can deal with many smaller orders and get them seamlessly to our printing environment in a high quality and adapted to the product. Second step is that we standardize the product in a way that we can produce many different orders of the same kind in a sequence so that we get to reasonable manufacturing structures and that get us the cost that our customers are looking for. Third, we are using digital printing technology so that we can really go to small quantities and leverage that for having the small, but also the medium size quantities in good quality.
Great.
The third thing is that we use our supply chain network outbound to get the products to our customers quickly so that we can be really fast and go low on quantities compared to other offerings that use different methods, require higher quantities, and much longer lead times.
Great. Hey, Paolo, let me switch over to you. Last year at the Investor Day, we talked about the commitment we had made to invest in bringing our Upload and Print businesses, and Pixartprinting specifically, into the U.S. You have been for more than a year, your team has been building out that capability. Can you talk a little bit about what we are doing there and what we have learned in Europe, what we are bringing to the U.S. market?
Yes, for sure. I think our factory in Pennsylvania, in Warrendale, is a concrete example of what manufacturing excellence means. For us at The Print Group, manufacturing excellence is a cornerstone of our competitive advantage. We believe in partnering with our technology vendors, that we consider partners more than suppliers, because together with them, we develop new ways of delivering our products, of manufacturing our products for our customers in a way that is faster, more efficient, that allows us to bring more choices. All the expertise we have developed in Europe in this area, especially in the category of labels and stickers, where it's over a decade of expertise and investment, and also in the area of booklets, magazines, catalogs, so the multi-page product, all of this expertise, we have exported that into the American market.
This is now allowing us to grow double digit, to grow very fast. Like you mentioned, it's a little bit over a year. We launched the plant. We have a very strong collaboration with Vistaprint, and we are able to offer Vistaprint products with a wider gamut in terms of sizes, in terms of finishing, in terms of formats, in terms of materials, and that's because of the advancement we made in technology. We believe in-
Go ahead.
Yeah. Just to finish there, we believe in continuous improvement, but also coupled with innovation and very often disrupting innovation.
Great. And just one side note. Pao, I think when we were speaking before, I mentioned it, and I certainly think Sean mentioned it, that the acquisition or the investment we made in Mixam has also brought a lot of volume that much of that is going, or will be going through the Pennsylvania facility.
Yeah, absolutely.
Great. Hey, Bryan, can I turn it to you for a few examples?
Yeah. So a couple examples that I think are great that really hit on the themes of this roundtable, not only elevated products, but also really how we leverage cross Cimpress fulfillment partnerships to leverage our manufacturing excellence as a driver of growth and efficiency gains. So, on the BuildASign side, one great example this year is around BuildASign taking on the fulfillment of canopy tents for Vistaprint in North America at the end of last year. Vistaprint previously generated about $2 million in annual revenue from the sale of tents, which were previously fulfilled by a third-party fulfiller. And candidly, due to the cost that they were getting from the fulfiller, Vistaprint was simply just priced too high and wasn't able to really compete within the market.
BuildASign was able to take this product in-house and take on the fulfillment, and as a result, was able to reduce their COGS by over 60%, which really enabled Vistaprint to compete much more effectively in price relative to the market. I am really proud to say that since that change, Vista is now on a run rate to triple its revenue and quadruple its variable gross profit, just by being more competitive in the market. We also have a long list of tent-related NPIs that will be coming out over the next couple of months, so I fully anticipate this trajectory to just increase. In addition to the cost savings, we also took the opportunity to really enhance the quality of the product as well, which is very well evidenced by the 4.8 out of five stars that you see on Vistaprint right now for that product.
On the National Pen side, I think a great example is around lanyards. Vista previously had been doing about $3 million a year through the sale of lanyards, and that, once again, was fulfilled by a third-party fulfiller. We identified this opportunity, and worked jointly to bring fulfillment in-house by National Pen. In the lanyards example, we were able to drive a 70% reduction in variable COGS by bringing it in-house, which has enabled Vistaprint to more than double its variable gross profit and grow revenue by over 50%. In addition, we were able to lower the minimum order quantity from 75 with the previous fulfiller, all the way to eight, and we were able to reduce the turn times from order to delivery to the customer by an average of three days. I think two great examples from both businesses of elevated products as well as the XCF partnerships.
Thanks, Bryan. Hey, Michael, I think you have a couple other things. I recently was in the Netherlands at the Dutch factory of Vistaprint and saw some exciting things. I know there is also some exciting things happening in North America, so I will let you talk about some of the various other elevated product projects which are going on at Vistaprint.
Speaking about your Venlo experiences first, Robert, we have just launched a corrugated packaging line in Vistaprint Europe, and we are producing different kinds of boxes, RSC boxes, setup boxes, that are not only available to Vistaprint, but to the whole Cimpress network in Europe, for making the same uplift of the product and quality improvements and speed of delivery improvements that I just spoke about for paperbacks, also available for corrugated packaging. That is a great step forward.
Second thing, also in the environment of packaging, we are going deep on food and beverage packaging, with a first step in North America, where on top of the current offering that we already have of paper cups, we will also add trays, napkins, and other food and beverage packaging products so that we can, at the end, offer a broad assortment, from low quantities, but also up to higher quantities and a very fast delivery.
The third thing that we are currently building in North America is just in time wide assortment apparel, making a wide assortment of apparel available without the need to warehouse the products. But we cooperate closely with partners who warehouse the products, who make them available to us on demand. We then personalize and ship to our customers within days. That is a very broad assortment that is fast turnaround time, that is low capital utilization, so that overall is a great business model for us and for our customers.
One thing, this probably applies to the examples that Paolo and Bryan mentioned, but listening to you talk, it links back to what I said in the beginning of my presentation, that we are in an evolving market. Two of the products you just mentioned, I think, are addressing some of the evolution that is happening in the greater market. Food and beverage packaging. We are in a world where takeout delivery is more and more popular, so the Uber Eats, the DoorDashes of the world. If you are a small business restaurant owner, you really want to be able to not be known as an Uber Eats brand. You want to be known as your restaurant. Food packaging provides a great opportunity to do that.
When I think of the corrugated packaging products, which I just recently saw, we already do those in North America. If you are, let's say, an Etsy or a Shopify e-commerce supplier, again, you need to really build your brand through your packaging, and that directly addresses it. It is an example of the market does change over time, and I am happy to see some of the movement we have been able to do to address those small business needs all around building their brand.
I am going to switch over to cost efficiencies and network optimization. You mentioned a few of those, Bryan, in your examples where some of the elevated products will also really cut costs. Maybe talk about more, I will call it legacy products. In your business, for example, a lot of the wall decor has been a long-standing product. We are moving quickly into beach flags and banners. How have you seen BuildASign driving cost efficiencies?
I think in general, I am really proud of the fact that both BuildASign and National Pen have really been at the forefront of leveraging cross Cimpress fulfillment to basically drive growth and efficiency gains. BuildASign, over the past year, fulfilled nearly $24 million in variable COGS for other Cimpress businesses, which is tremendous. As Maarten shared earlier, this is a very important metric that we like to track, as we feel like it is a great indicator of us growing potential savings as we move more volume to focus production hubs, which obviously includes insourcing from 3PFs. Also notable is that these same products were able to generate almost $100 million in external product revenue for Cimpress, and $75 million in variable product gross profit. So, huge profit driver for the company overall. On the National Pen side, it is a very similar story.
National Pen fulfilled $17 million in variable COGS for Cimpress overall last year. Probably one of our proudest achievements is around our Upload and Print business. We have started to work very effectively with our Upload and Print teams on this really new category for them. They do not have a ton of experience with PPAG, so we were able to basically open up this greenfield opportunity for them. Last year alone, we fulfilled $1 million in COGS for them, which equated to $2.7 million in external revenue. This is now our fastest-growing partner across the Cimpress network.
Great. Hey, Michael, do you have any thoughts of cost efficiencies?
Yeah, many. One thing, Bryan spoke about Mexico and the role of Mexico in the National Pen and BuildASign fulfillment structures. As Vistaprint in North America, we have also made a step into Mexico. I already spoke about paper bags and food packaging that we serve from our Mexico site. We will establish the Mexico site as part of the overall Vistaprint fulfillment network, so that in the end, we will have three Vistaprint sites, one in Canada, one in Nevada, and one in Mexico, serving our North American customers. For Europe, we already spoke about corrugated and paper bags. We fulfill that for all Cimpress partners in Europe, and we also have a very close cooperation with other Cimpress business units in Europe to use them as focus production hubs for orders fulfilled for Vistaprint from labels, books, magazines to flyers and folders.
Those products are often coming from our Cimpress partners. In roll labels and books and magazines, we have an especially close cooperation with Pixartprinting, where we use the wide assortment, the broad available order quantities, and the scale of the established structures in Pixartprinting to make that available to our customers and also to get to the products in great quality and at very good margins for Vistaprint.
Great. Hey, Paolo, I think that touches on something which Michael just described comes from you, or from your team. I'm going to probably ask you, do you have any specific numbers or details you could share on those label-
Yeah, sure.
Yeah, go ahead.
Yeah. Michael just mentioned the, I would say, brilliant cooperation that we have in the area of labels and stickers, where the network optimization that is enabled by the MCP allows Pixartprinting, which is a center of excellence for the production of labels, to integrate with the flow of Vistaprint and get the reach that Vistaprint has with the customers. As it was mentioned in the annual letter, our collaboration last year allowed for an improvement of 37% year-over-year in terms of VGP. This is quite a substantial impact on the economics of the category, which is a very nice and growing category. Yes, it goes both ways.
As Michael was saying, we are able to couple the manufacturing excellence of The Print Group in certain categories, like booklets and labels, with the market reach of Vistaprint, and vice versa. As Michael was saying, we leverage on the expertise developed in Venlo, in Vistaprint, for corrugated or for paper bags to offer to our customers. Being able to produce in-house products that otherwise we would either source from the market or that would not have the breadth of possibilities that we have now by leveraging the capabilities of Vistaprint.
Great. Hey, I'm trying to keep to the amount of time, Meredith, that you gave me. I think we're pretty close to the 25 minutes. Can I just do a time check? Could you
Five minutes.
Okay, great. Okay Michael, I'm going to go to you. Well, actually, a lot of you have been in this industry for a long time. What is it about, I often use the term mass customization. We do. When we realize that the bulk of the industry we're going after, the market we're going after is offline. What differentiates how Cimpress operates from that offline competitor? Any one of you would love to jump in and spend five minutes talking about that higher level perspective.
I think the mass customization approach is, in its core, an industrial approach, making really industrial processes at high efficiencies available to products that normally are produced in smaller quantities and in a more manual way of producing them. If you look into our factories, you will find a lot of manufacturing engineers, process engineers who design processes, who work on quality structures. We have strong IT capabilities to guide everything we do with IT optimization. That's very different to a typical printing company. We really make industrial approaches accessible also to medium quantities, because we define a product assortment and then bring many orders from the internet together to be produced together in a very efficient way, but individually for each customer.
Right. Bryan or Paolo, do you have anything you want to add to that?
Yeah, I agree with Michael. I fully align with him. I believe the difference that Cimpress brings to the market is the fact that we do industrialize the process of producing a small quantity in a very rapid turnaround. We are able to minimize the cost of a small lot of products, of items, and make it comparable to the industrial cost of a very large product because we combine all of these orders together. Of course, in order to be able to get that kind of economies of scale, you need scale. You need large sizes.
The fact that a plant like Vistaprint has 15,000 orders a day, or many of our plants are in that ballpark of number of orders, allows us to be super efficient in having very tiny unit cost and then being able to reflect that as an advantage to our customers, and therefore, being very competitive. This is an advantage that other players that do not have the size are not able to compete with.
I would probably just add product depth as well. A smaller player cannot merely compete with the product depth that we are able to maintain due to the size and scale of what we do. I think Florian touched on it earlier, being a one-stop shop is really not realistic for a smaller player when you are not aggregating volumes like we are at this level.
Yeah. It's interesting you say that. I spent a lot of time traveling to our production facilities. Recently, I was in Austria where we had four different facilities that we leased a new building. We consolidated into one, which generated a lot of efficiencies in and of itself. Austria is a relatively small market. We don't publicize the revenues of that particular business, but it's between EUR 50 million and EUR 100 million . So it's not a small business, but it's, on the Cimpress scale, very small. The team there and the managing director there was telling me that about 30% of our revenues in Austria, in druck.at, before our acquisition of Print Alliance, comes from cross Cimpress fulfillment products.
And that's really allowed us to really grow that business, where a business that size in that market just couldn't afford to have that breadth and depth of products that, when we have something like $2 billion of revenues across Europe, they can source from other parts of the business, including certainly, I think Pixartprinting, The Print Group, and Vistaprint or National Pen are all suppliers to them. Hey, Meredith, I'm going to turn it over to you. I want to thank you, Bryan, Michael, and Paolo. These guys will all be on the general Q and A, and I've seen we've gotten a couple of different manufacturing questions. We'll be back to you with more questions in a little bit.
Thank you, Robert, and thank you everybody. That was a great discussion. I am so excited about our manufacturing capabilities, our new product introduction. This food packaging thing, I'm so excited about. I'm excited about everything. The event tents, everything. So good. But we are going to shift gears now. We're going to move on to AI now as an enabler of growth and efficiency. This panel will be hosted by Sean.
Very good. Welcome to the second panel here. I think, listen, AI, it's a critical topic for any business. It's a critical topic for us. Robert mentioned earlier, and there's actually a few questions that have come in on this too, but how with generative AI really taking shape, and getting more penetration, how that lowers the barrier to create great visual assets for anyone, and how that's a tailwind for Cimpress, given our role in the physical manifestation of that, which you just heard about in the prior panel. I'm not going to focus on that in this panel. I'm really going to focus on this panel on what are we doing, and where are we focusing from an AI perspective throughout Cimpress internally. This has definitely been, and it's an area investors are very curious about. It's been a measurable driver for us, for sure.
It factors into the growth and efficiency drivers that we have talked about. We are seeing impact really across all domains. We have six leaders here for the panel. Their teams are close to this work. Let us dive right in. I am going to start where AI touches the customer probably most directly, that is how we serve and grow the relationships that we already have. This is again, where there is both growth and efficiency stories that converge.
I will try and hit on both of those. Florian, I am going to start with you, just given the prevalence of this topic in your presentation earlier. You focused a lot on growth with high-value customers in your presentation. Can you just share maybe some examples of where we are leveraging AI to help us to both retain and deepen our relationships with high-value customers today, including some of the work we are doing with personalization, which we have touched on a little bit in past investor days?
Yeah, sure. Thanks, Sean. Yep. Probably starting with the customer care and account management space. Within that, really, to me, there is two flavors of that, right? One flavor is the fully automated, no human interaction side of things, where AI has really drastically increased the velocity at which customers can self-service, and get help through chat. That is especially important for elevated product purchases because these are products that often require a bit of interaction. When you go to the vistaprint.com website, look at our Vista Assistant, you can actually get product advice through that chat interface, which is great because that allows us, especially for elevated products, to engage customers at an early stage and then drive those purchases, which are key to deliver high-value customer growth.
On the human interaction side, I will say that even this coming quarter, we will be launching AI customer summaries that will then equip our team members with what they need to know in the moment about the customer, their request, and how they can best frame their interactions with customers based on what they might need next. That in itself too, it is really a combination of various, I would say, modular developments. The what you need next module is one that we have been developing over time, and it is actually now powering some of our on-site recommendation toolings. There is obviously continued development from there. Something that I notice a lot when I talk to customers is just the sheer amount of customers who now design using an AI tool and then come to us and upload that design.
It is interesting because that in itself really gives us new opportunities because it means we can personalize the website experience for those customers, because basically by what they upload, we get a sense for what the logo is, what their color palette is, and so that allows us to make the whole site experience a lot more personal than what it used to be. The last area I am going to call out is the relevance of our marketing messaging.
I think I talked about this even at last year's Investor Day. We are able to put together our marketing campaigns from reusable, pre-built creative Adam libraries. The model will pick what a customer sees, and the model will, based on the feedback, then continually improve the relevance and drive the engagement of the marketing messaging and campaigns that we put in front of them. This is a couple of examples. It is really fascinating, and it is obviously driving a ton of improvement for customers and the business.
Yeah, absolutely. Yeah, cool. Great examples, Florian. Thank you. Paolo, maybe I will turn it to you. I think a lot of the examples that Florian had, I would say, are more on the growth side. There is an element of efficiency there too, but I would say your teams were out of the gates very quickly, leveraging AI on the efficiency part of this, especially in Pixartprinting. Maybe just walk us through what your teams are doing from an AI perspective on both service and the cost to serve our customers.
Absolutely. In The Print Group, AI is changing the way we operate across many areas, and this is how it impacts on the way we serve our customers. It impacts on the efficiency we operate. For example, you mentioned Pixartprinting. Today, 60% of the chat sessions of our customer care department are fully operated by AI. These sessions receive 80% positive feedback, and the rate of first contact resolution is as high as 77%. This means that you mentioned about cost reduction. In the course of the past three years, we were able to reduce the team by 21%. In spite of the business growing, and normally, the customer care resources would grow in a relationship with the growth of the revenues.
In spite of this cost reduction, Pixartprinting, not later than last month, got the number one rank in a national award for customer service, professional services, especially in the area of quality of service and professional competence. I am proud to say that AI is part of our broader efficiency improvement, and it has not impacted on the quality of the service that we provide. That is one area. Another example could be in the marketing department or in the go-to market, where we are able to apply AI for the creation of campaigns, for the translations.
This is, again, in Pixartprinting, more than 12 different markets with all the declinations of languages across Europe are handled through AI, the design workflows as well. This has allowed us to significantly reduce costs to the point that we are able to produce 300% more content than before the introduction of AI. This means that we can deliver more localized versions and more service with the same resources. The opportunity of AI for us is to lower the cost of serving our customers and at the same time to increase the capacity to support our growth.
Cool. Great stuff, Paolo. As I said, I think especially in Pixartprinting, you guys are out of the gates quick. These, at this point, these are very measurable and very real things that we are seeing. Great stuff there. Maybe let us turn to the customer acquisition end of the spectrum here. This is an area that is evolving really quickly in terms of where customers or potential customers do their searching, do their discovery, and that is moving more towards AI and agents. Let us just talk about how we acquire today, how we are positioning for that shift.
I think maybe Florian, this is relevant across all of our businesses to varying degrees, but especially relevant at Vistaprint. I will come to you on this one. I think, we are using AI in customer acquisition now. What are we doing to make sure that move from today's channel mix to agentic commerce and the world of agentic commerce is as smooth as possible, and that we are positioned to take advantage of whatever opportunities lie ahead?
Yeah. As you say, clearly winning in these LLM chatbots is a top priority for us. It is where more and more potential customers and existing customers are starting their journey. We have to be there. What are the key things that we are doing? Obviously it starts with making sure that we are discoverable, and that has a technical component. You heard from Maarten and we will hear from Adam, I think, about all the work that we are doing on structuring our data, structuring our content, make sure that it is relevant and can be consumed. Then I also always like to remember everyone that I am thinking of LLM chatbots, quite frankly, also as just the most demanding customer and the most savvy customer we have ever had. Because it is almost like they are omniscient. They know every price. They have read every customer review.
They have read every product review. In some way, the good news is that the basics still matter, the basics of delivering on time, the basics of having a great quality product, and the basics of having a broad assortment. The good news is we are actually pretty good at those basics. Obviously we keep improving on those basics, but to me, that is also part of just making sure we are discoverable as a primary brand within those new channels. Besides that, in order to support that, we have put in place measurement that tells us where we can improve to be recommended more often by some of these LLMs and the bots. I talked about this, we are definitely also investing in direct advertising spend.
We are improving the signals that we send to our media platforms so their AI-powered systems can do a better job of finding high LTV potential opportunities for us. Also the continued investment that we are making in our brand, I think is important in that context because it creates a deeper connection, so we remain a direct destination or continue to be known, including to LLM chatbots as a destination, which then means we are discoverable and which means customers trust us with their business.
Great. Such an important area.
Yeah.
I know firsthand it's a big area of focus for us. Adam, maybe I'll just offer up the opportunity for you. Is there anything that you want to add in terms of just
Yeah
there's a lot of, Florian mentioned data structures and other elements. There's a lot of infrastructure stuff here. Anything you want to add in terms of what we're building underneath all this to enable it?
Yeah, sure. I think, as Florian mentioned, obviously there's a lot more just discovery happening on these agentic platforms. The good news is the industry has basically standardized on a protocol to make these integrations more native. Whether that's our on-site agentic experience or our off-site with Canva, with OpenAI, with Google, whoever that may be, we've been spending a lot of time building our foundational infrastructure around something called Model Context Protocol, which unfortunately has the acronym of MCP that we try to navigate internally effectively. But we've been building this core infrastructure, which is similar to the Web 2.0 days of where everyone had to have a consistent API that was able to be integrated to all these other experiences. This is effectively the agentic version of that.
We've got all the foundational plumbing that now gives us the ability to not just integrate, but also have a truly native experience. Florian mentioned how so many more of our customers are now starting their designs in these experience. We want to make sure they can start with the design and continue the experience if needed, to do discovery, to do checkout, to do customization, natively in those platforms. I think you'll see more here and I feel really excited about the advancements we've made in this space.
Yeah. Thanks, Adam. I know how close you are to that work, so great stuff there. There was a live question that has come in that is broadly connected to this, so let me just ask it here, and I will probably turn to you again, Adam, and also Maarten on this one. But the question says, "How do you see the rise of end-to-end capable AI agents like Muse," news of the last week, "impacting your business and in particular your customer relationship over time?" So maybe Maarten and Adam, again, probably with a focus on the infrastructure piece. Can you comment on that? If anyone else wants to jump in, feel free to do so.
Yeah. I will answer a little bit with the infrastructure for sure, but also a little bit on the question itself. I really liked Florian's answer just now because he also said the customer will become much more savvy with all of that data, and you already saw some news with Muse that some major retailers out there were starting to block it because pricing becomes extremely transparent in these kind of things. Again, I do think we are positioned pretty well with those basics, continue to prove them. So indeed, the basics, structured data, building an amazing Model Context Protocol, like Adam just said, is key. Then this becomes more like a new sales channel.
That is how we really see this to develop, and we are just on top of it. We are not completely there yet. It is not live everywhere. But we are fully on top of this in terms of this is going to be a major sales channel. I changed completely my behavior, how I work in internet search and these kind of things as most everybody has done now, and you can just see where this is going, and we are going to be on top of that. Adam, you?
Yeah. Just to add, I think about the mobile era as an interesting equivalent where we used to just be on desktop, and then we had mobile, and we had to completely rethink what were the experiences like in a smaller device that allowed customers to still continue their journey and have this experience with the brands. I think agentic is just another version of that. So when we think about these integrations, we need to make sure, hey, this is not just about our site or mobile experience.
It is now about what is the agentic experience, where I can still go through design and customization and not have to leave where I am, whether it is in ChatGPT or Gemini or another tool. I think that native commerce experience outside of just having the infrastructure plumbing is also going to be really critical for us so that we can have these truly native agentic commerce experiences offsite.
Great. Thanks, guys. It is a great question and a highly relevant one as well. I am going to keep moving here and turn to a slightly different topic. You heard in some of our presentations about new product introduction and product selection being an important part of our growth path. Let us just talk a little bit about how AI is allowing us to do that or do that better, both from a speed and cost perspective. Bryan, I am going to turn this to you. In the promotional products category, this is just a must. New product introduction is a constant. Can you just maybe walk through what the National Pen team has built in this area, but also how that might have applications beyond just National Pen?
Yeah. Maarten actually touched on this in his presentation, but I think it is such a quintessential example of how AI can positively impact our business as well as the customer experience. Definitely, we want to touch on this multiple times. One thing I have learned very quickly about the PPAG category is providing customers with a large product selection is absolutely key to being competitive in the market. It is also critical to be consistently refreshing your product assortment as trends move very quickly through this category. NPIs or new product introductions are absolutely critical, as you said, Sean.
As a result of this realization, the National Pen team embarked on a goal to really 10x our rate of NPI, right? How do we move 10x faster than we are today, and 10x more efficiently? I am very proud to say that they blew out that goal by far. They have now built and started to deploy an AI-driven process redesign that cuts the cost of selecting, configuring, and merchandising new products by more than 95%, while increasing throughput speed by more than 20 times. We are talking, it used to be months from beginning to end of the process to now minutes.
It used to be our estimate was about a couple hundred dollars of work based on all the individuals who had to touch the process, and now it is down to $5. Just tremendous breakthrough to be way more efficient and we are off and running with that new process. The other thing I would add is this also comes back to the Cimpress Experience Platform, right? Now that National Pen is on the Cimpress Experience Platform or moving towards it, we are now enabling the same technology, a new process for Vistaprint as well. So basically both businesses are really benefiting from this breakthrough.
Great. Thanks, Bryan. I think what's great about that example, one, it's having a material impact. It's something that's really important, but also it involves the complete redesign of an end-to-end cross-functional process. It's not like little productivity improvements, but there's a complete redesign, rethinking and putting agents really front and center in that redesign. Anyway, great example. Thank you. Let's maybe turn to some of the aspects about just how we operate, some of the things that will also lead to efficiency gains. Of course, technology is front and center in the AI discussion, so maybe let's start there.
Adam, I'll start with you here, and maybe you can just give an overview on some of the things that in our engineering teams that we're doing to embrace AI in the way we operate. I think from an external perspective, it's hard to get a glimpse into how we work, how that work's changing. So maybe just talk a little bit about how that is happening in the engineering domain.
Yeah, sure. I think there's probably two aspects to this. The first is, I would say, within engineering. I think we all know writing code and all these things has completely disrupted software engineering as a job, and we all have been rethinking how we work. So one of the big innovations we've been focusing on internally for engineering is something we call our software factory. You may hear things like harnesses and things of that nature. Basically, what this is the ability for us to provide context, and automatically generate code at scale with the right guardrails, the right security checks. So, for example, we have teams that had backlogs of maybe some security fixes that they wanted to fix, and we can now rip through those in days, or writing tests or running experiments.
We are just drastically rethinking how do we take our strategy, product work, and turn that into working prototypes that we can get feedback faster in our overall software factory machine. If I think about just the general tooling, Bryan kind of hit on the product introduction. What enables that underneath are a couple platforms that we've built for the broader organization. This enables individuals or teams to build agents that can take on workflows, take on automations, to do some important work. For example, we have a 3PF claims processing. This historically has been a process where maybe a supplier failed a commitment to us through an SLA. Someone had to take that, manually upload a PDF to a third-party site, file a claim.
We had to make sure this was done within a certain time frame, or we couldn't file that claim. That process has effectively been completely automated, which are real dollars that we can now recoup, and we have a system that does that. Validating QA on our site. We want to make sure that product descriptions and details actually match what we're getting from suppliers and in terms of what they're getting on the website.
That's historically been a pretty manual process to go individually look at products. Certainly in a world where we're 10Xing our product introduction, we need to support a QA process that scales. We can now manually fire up agents that can go validate the quality and all the efficacy of the data on those sites to make sure it matches effectively. I think internally in engineering, our software factory, and for the organization more broadly, we've now got these agentic automation platforms that we are enabling businesses to drive more end-to-end business workflows, which has been really promising.
Great. Thanks a lot, Adam. Maybe, just briefly, if Maarten or Adam, you want to touch on this, in terms of we're going to get to the people impact of all this in a moment, but in terms of how teams are organized. Anything you want to share just in terms of how that's starting to get reshaped, anything relevant to share there?
Yeah, I can extend. I think given all those changes and how differently we are writing software these days, I think the outcome of that from our perspective is wider, flatter teams. I think we are rethinking the boundaries of teams. There is now opportunity to own a much more broad scope. Then I think within those teams, just given how effective these AI tools are, what we are seeing is small pods of two to four engineers owning a problem end to end, acting like this mini startup within the team can really drive a lot of efficiency, move really quickly, get to outcomes really quick. So we think that general model of this flatter teams with the pods inside is going to be a bit of the model of the future of how teams work.
Yeah. It is exciting. Adam is certainly spearheading that in the organization on many parts, which is awesome. At the same time, I also want to emphasize the fact that if an engineer would start today a startup all by themselves and greenfield something, you can be instantly agentic and off to the races. But the reality is also at a larger enterprise, and we have many processes and systems that you basically have to rethink how do teams organize. If you have ever been close to software development organizations, they have their methodologies of Agile or Kanban or Extreme Programming, and there are all these kind of methods that have happened over the last two decades and product thinking, et cetera. Almost everything of that gets a little bit put against new light. Now, the good thing is we are full into it, on all cylinders.
But it is going to take a few months until a few quarters until you really reach the core of systems that work right now running all of Cimpress and say, "Okay, that whole team is now organized and structured." So an exciting, completely new world, but we also have to be realistic that we got to do some change management across the whole organization, as does every company around the planet, probably.
Great. Thank you guys, and we are a little tight on time. I wanted to go through some other kind of OPEX examples like conversational analytics and some other things. Why do not we skip ahead to a really, really critical part of this, which is really all things to do with people and org and culture. Louise, you are at the center of this, so let me flip it to you. Could you speak to that? What we are doing to upskill people, L&D, organizational shifts, all things people. I will throw that one to you.
Yeah, absolutely. Thank you. I will start with actually what we have done on the culture side. So a year ago, we launched our new Vista Behaviors, and really just specifically to strengthen the entrepreneurial culture and build momentum around AI. A lot of the new behaviors really focus on speed and customer focus, bold experimentation, so key attributes that really matter in the AI world. So that has been a really important kind of evolution that we have gone on over the past year and really embedding all these behaviors into kind of day-to-day work from how we hire, how we develop talent, how we review performance. So really the goal is changing how we work in an AI-first model from a culture perspective. On the L&D side, Florian mentioned it in his presentation. We have kicked off AI development goal for every single team member across Vistaprint.
They are working on that through the end of the year and something about how they are going to simplify, automate, use AI in their daily work. The response has been huge. Team members have just dove right into completing AI courses, doing hands-on experimentation, and we have just a really robust learning community, where we are sharing real learnings and use cases. As we head to FY 2027, we are going to really double down on upskilling on human competencies that complement this kind of whole AI-first shift. So key skills like systems thinking, change management, resiliency, high judgment. These are really important skills that all team members are going to need to manage AI effectively. Then maybe I will cover off one other thing, which is how do we think about the organizational shifts. Adam just covered it as well.
But we really want to think about what shifts for the team members and how they work with AI differently from how they are doing that today. So team members will really start to move to become kind of the orchestrator really, and set the strategy and the intent and really figure out what problem are we solving, whereas then AI agents actually figure out how to execute that problem and really deliver the end-to-end outcomes. So moving to this agentic model is not just about redesigning the orgs. It is about how team members become these single-threaded owners over broad outcomes. I think this will also change our cost curve significantly. It allows us to really scale and execute faster and better and achieve larger outcomes without increasing head count.
Awesome. Thanks very much, Louise. It is such a critical component to all this, and there is a lot of work ongoing there, so thank you. I am going to end this with, and I would ask either Maarten or Adam to chime in and do the 30-second version of this, but there are a lot of benefits we talked about. Those benefits are real, but this stuff does have a cost to it. This is a big topic. Just maybe touch on from an investor perspective, what are we doing to control costs? How do investors know that we are taking modern approaches, have the right controls and governance in place? Brief answer. Go.
I'll go first. 30 seconds is, I feel really excited that we took very early steps to get our FinOps and instrumentation really tight so we know where every dollar goes for every department, for every AI application that we run. Auditing, reporting, governance is really tight. Normally, you do these things, then you spend months trying to figure out where all the dollars have gone. We made a lot of upfront investments in the infrastructure in terms of where all those dollars are going. We're also looking at other avenues, things like open source models, which have a very different cost profile, like orders of magnitude different cost profile.
Lastly, I will say we are investing in some technology which allows us to basically automatically route requests to the most cost-effective model. Today, in most scenarios, you manually choose the model you want to use for the task. In the future, we think there's a more dynamic element to that, where we can have technology actually choose the most cost-effective model for us automatically. That's my 30 second of where we've been focusing.
Thanks, Adam. Maarten , any last words on this one?
Adam said it perfect.
Great. All right. We will end it there. Thanks, everyone. Exciting area, a lot of progress. Yeah, I am sure there will be more questions in the general Q and A. Back to you, Meredith.
Fantastic. Thank you, Sean. Thank you, everybody on both of our panels. You are not off the hook yet. I will remind everybody that if you are going to be speaking in this session, please re-engage with your camera and microphone at that point. Your camera now is fine, too. Okay. How do we think? We are going to move right into the Q and A. We have pre-submitted questions, and we also have live questions. Thank you to our investors and sell-side analysts who have submitted these questions. All right. How do you think about the decision to acquire a business versus signing a multi-year supply agreement? When would you choose one option over the other? I am going to ask Robert to answer this one.
Okay. First of all, we do not typically have multi-year supply agreements for production operations. We do have them for materials and logistics suppliers, but they are not acquisition targets for us. When we look at firms, should we invest in them on a minority or partial equity basis or acquire them? First and foremost is strategic fit. Is the company going to help us with our objectives? For example, is it going to strengthen our capabilities in elevated products? Is it going to add focused production hubs or integrate directly into our fulfillment network so that we can better serve high-value customers?
Secondly, it really comes down to economics. That we roll into a ROIC calculation, and if we do not have base case returns above 20%, we will not do that. That is a combination of the business, the price we pay, and the synergies we can feel confident about. We have a long list of companies who could fit those two criteria, subject to, again, an attractive purchase price. The choice we are making is more, first of all, what other use of capital might we have? Organic investments, share buybacks. Then we get to M&A. What is the best option given our management bandwidth and the criteria I just described?
Wonderful. Thank you, Robert. I will stick with you for this next question. We knew we would get a question on Canva, and yes, we did. We got two. I am hoping that you will provide detailed information on the partnership with Canva. I am particularly interested in knowing whether this is an exclusive partnership, or could you strike similar deals with other design platforms like Adobe Express? Then another question on how the partnership is doing relative to our expectations so far and what kind of contribution we expect from it in FY 2027?
Okay. Well, for contractual reasons, we cannot share details about the economics or financial results. But I can say we are growing fast off a small base. We as a business, and they are very excited about the potential of this partnership. Jumping to exclusivity, no, in neither direction. Canva still works with a network of highly qualified print service providers. They have historical relationships with Canva, and we have the ability to pursue relationships with other partners. So that is the technical answer. I would say in terms of the spirit of our partnership, it is very much one of cooperation and growth, where we feel this is a win-win opportunity.
We are working very closely together. We have established a team in Australia to work closely with them. Going to the other question, we are less than a year into this partnership. We started talking about this in the very end of 2025 calendar year, and I would say we are doing very much in line with expectations so far. We always are looking to do better, but we are happy. I think Canva, to our knowledge, is happy as well.
Wonderful. Thank you, Robert. Sean, got a question for you. Couple questions on this one from folks. When you gave your guidance back in July, you did not include anything for the new 50% Canadian tariffs, but those have since become effective. What is the impact on the company, and what is your expectation for how that will impact FY 2027 results relative to your prior guidance? Then another one similar, asking about the tariffs in Canada in particular and the impact on cost and margin.
Yeah. These Section 338 tariffs came into effect August 19th, I believe, so that was after earnings. That started to have an impact on us. I think we made some remark about this either on the live call or in our earnings doc, saying that these tariffs only impact a small percentage of the products that we produce in Canada. But there is impact, and that is impact that as we went through over the last year and a half or so, that we continually look to mitigate that risk and make operational change. I think we have demonstrated that we have a competency to do that, leveraging our broader supply chain, and we have a great set of folks and leaders that are doing this work every day. It has been a big area of focus for us.
As it relates to the guidance, we did not put anything in our original guidance, and obviously now I said we were having some impact from a cost perspective. That is balanced by the fact that we also did not include the refunds that we anticipated for phase two and phase three IEEPA tariffs that we are starting to get those additional refunds come through now. On the tariff cost, we have no idea what the duration of these will be, if they will change, go up, go down. But based on everything that we know today, for the full year, the way that I would think about it, the way that we have modeled it is that broadly speaking, the increased tariff cost will be offset by the tariff refunds that we anticipate getting and have already started to get.
The thing that will differ is that quarter to quarter, for example, in Q1, I would expect that the refunds will be more than the increased tariff cost. It will probably be the other way around in Q2. Then there will be a curve of which we will be bringing down the impact because we are putting all of our mitigation in place. TLDR, I would say for the full year, net neutral between the two. But yes, these are having impact, and yes, we are on it in terms of how we operationalize against that.
Thank you, Sean. A lot of work going on in order to make that happen. We are going to shift gears a little bit here, and I'm going to call on Florian here, but the question is a little bit involved, and it asks some question about metrics, so stick with me here. You've mentioned the shift towards elevated products is increasing your average order value. What effect is this shift having on the frequency of orders? Can you show a figure that plots the average number of orders per customer over the last few years? Can you show the percentage of repeat customers over the last few years?
Florian actually did share a partial answer to this question, this was a pre-submitted question, in his presentation for Vistaprint, where he showed the comparison of different order stats for the 650+ VGP per customer population versus the average for all customers. Florian, I'm wondering if you can just sort of give a sense for the trends there, because that-
Sure
was just a point in time.
No, absolutely. Really, and I hope this came through in my presentation, where we're focused is the $650 VGP-plus type of customers, which as you saw in my presentation, is a growing segment of customers. And that segment of customers, just to repeat the facts that I shared earlier, has really interesting characteristics. And to the specific question on order frequency, these customers order 8.7 times a year. Our average, it's sort of the non-$650, so the ones below that threshold, order around 1.6 times per year. So there's a factor of 5.6 as you move from non-$650 to $650+ VGP customers, which is significant. Rather than in looking at the averages, I guarantee you we're internally very much focused on growing that segment of customers because to us it is what is possible as we deliver on our value proposition.
Nevertheless, coming back to the question, when you look at the combination of all customers and the combination of the different measures that I also referred to earlier, what you will see is that the number of categories shopped and items per order are up across the population. The total number of orders is actually lower, but the AOV, the average order value, is up significantly, and that is driven by product mix and a few other outputs of the strategy that we're delivering on. That's roughly the picture, and again, I think, rather than looking at the average, I'd really encourage everyone to look at our ability to drive growth with that segment of customers that is so central to our strategy and that responds well to the investments we've made, especially in elevated products.
Thank you, Florian. Very helpful. Okay, I'm going to toss this next question to a combination of Robert and Bryan . This is a great question. In January, you announced that National Pen and BuildASign will share capabilities with Vistaprint. Does this mark a shift toward more centrally coordinated decision-making, or does the decentralized model remain intact? Robert, why don't you start first, and then we'll move to Bryan.
Great. First, it's an important question, and it's a multifaceted answer. I'll start out by saying yes, we are, and I mentioned this, we are moving towards what I'd say is a more balanced place between decentralization on one hand and centralization on the other. We're also moving more towards cross-business collaboration and common platforms. We're doing that in areas where the benefit of scale, of efficiency can be very strong, and shared technology infrastructure, supply chain management are great examples of that. That being said, we are working hard to maintain autonomy for teams where that drives speed and innovation. First of all, manufacturing innovation happens within the businesses. I would say even within our larger reporting segments, within different parts of those segments, so different parts of PrintBrothers or The Print Group or within Vistaprint, different facilities.
Because we need those teams to be very close to the production floor, the supply chain of capital equipment, the production engineering, and have a strong understanding of the customer needs. That's really that proximity, which many different parts of Cimpress, but for example, Pixartprinting has been incredible at for decades, is that close cooperation is critical. So it's not a choice of all of one thing or all the other. Because manufacturing innovation, and therefore a lot of new product introductions, happens on this decentralized, autonomous basis, we use this federation approach as opposed to a really centralized state where cross Cimpress fulfillment allows us to have different parts of Cimpress take advantage of those different innovations.
I would also say that when we have smaller businesses that are growing very fast or have a very specific geography in which they focus on, we leave them heavily decentralized. I mentioned the Austrian example. They can use cross reference fulfillment, but we are cognizant of both the advantages and disadvantages of centralization, and vice versa for decentralization. I am going to say one last thing on central platforms like the mass customization platform or global procurement.
First of all, we try to design those to be configurable. They are not one single approach, so that different parts of Cimpress can use them in different ways, and that is an important component, that configurability as opposed to a single solution. Bryan , I am going to turn it over to you to talk a little about the cooperation between National Pen, BuildASign, and Vistaprint, which is not really a central thing. It is happening within several of our reporting segments, but I am aware of, and I get updates on, but I am not driving. Can you talk about that from a decentralized perspective?
Yeah. I think in general, this whole move is trying to get the best of both worlds, right? How do we leverage the areas where we still want decentralization and autonomy within the businesses, plus benefit from where it makes sense to be more centralized. I think there was probably also sort of a realization that a lot of the growth initiatives for both BuildASign and National Pen were very closely aligned, with a more centralized view, as I touched on earlier, about cross Cimpress fulfillment, et cetera. But another huge benefit, though, that I want to really touch on is the capabilities and these assets of both National Pen and BuildASign that we are now leveraging to help Vistaprint. So there are some great examples so far today. I already talked earlier about the 10X NPI, moving to the Cimpress Experience Platform.
So basically getting the businesses on the same complete end-to-end, same technology stack. Other examples are National Pen has tremendous expertise in the direct mail channel, as well as telesales, and we are leveraging both those with a test for the Vistaprint customers currently. Then finally, I think a lot of people forget that National Pen is now celebrating its 60th year anniversary of being incorporated. So there is some deep experience in terms of product development and sourcing around the PPAG category that Kanoway has probably been really benefiting National Pen up to this point. Now we are taking that expertise and using it for the benefit of Vistaprint. So I think overall, this has been a great move and a great change and the right thing for Cimpress overall.
Wonderful. Thank you. The way that I always think about this topic is not one is right in all circumstances and the other model is wrong in all circumstances. It is really where are we in our evolution. We are able to do things and share capabilities together now because of the maturity of where we are from a technology perspective. That was not available to us five years ago, all of this collaboration.
Because it is available to us now, of course, we are taking advantage of this, because we can, and it is the right thing to do from a cost perspective and from a revenue growth perspective. Okay. We are going to move on to another question, about MCP actually. Robert, I am going to ask you to weigh in on this one. So we have been talking about the opportunity around MCP for years. It seems like we are finally starting to see it impacting growth and margins. What is driving that?
Great. I will jump in and then Maarten, obviously leading MCP and being very actively involved in the Cimpress inter Cimpress revenues of cross Cimpress fulfillment, may want to jump in. This has been a great example of we say we want to focus on focus. That is a short way of saying we have to execute. It also touches on that last question we just spoke about, in centralization or decentralization. We know that aggregating similar products into single focused production lines or production hubs drives great advantages both for customers and for Cimpress shareholders. That is just a core part of mass customization. Volume brings a lot of benefits. We also understand the importance of having proximity to customers and decentralization.
We have been working for multiple years to understand the impediments to driving more of the MCP marketplace vision, for the last several years, and then focusing on that detailed execution to build out the culture, the technology, the incentives, the processes, and yes, the technology around that. I will start with the technology. That is certainly gotten more mature. It is better and more robust. It will be better and more robust two years from now. I think we almost focused too much on the technology early on, where, yes, the technology matters, but there are many other things that needed to be addressed. Very closely related to the technology was the establishment and the enforcement of common product standards across Cimpress. So how do you define the customization?
We had initially not centralized that, and in retrospect, we now realize without common standards, this may sound obvious in retrospect, a high volume software-driven platform can't ever become a platform without common standards. So enforcement of that was important. Secondly, or I guess third after the technology enforcement is once you establish those standards, they can be an impediment because they're expensive or complex to move from one set of standards to a new set of standards. To lower the configuration cost of that movement, Maarten's team built a centralized MCP operations team that's developed AI-based automation and whose team members are located in low-cost locations, mainly Tunisia and India. That has radically lowered the cost and hassle to our businesses to move on to product standards, and it's greatly increased the compliance to those product standards, and that allows more flow.
I think importantly, just being very explicit about our declaration that we are moving to this federated approach of focused production hubs, and that we want the volume to move to the best facility for this, that has helped. Then I'd say last but certainly not least, people respond to what their incentives are, what their reporting structures are, what their financial incentives are. Individual businesses and managers now are exposed to what's good for Cimpress overall, rather than what was previously showing up on their local financial reporting system. So I often say, from my perspective, it's moving from Cimpress's left pocket to right pocket, where the margin of a fulfillment order went. But prior to a few years ago, we were literally having different parts of Cimpress negotiate with each other over who would get that margin.
About one to two years ago, we moved to a new management financial reporting model, which we've explained in our public investor relation documents of cross-fulfillment, and that leads to this inter-segment reporting, which we report. But the effect of that for our frontline leaders and team members is that the merchant, the part of Cimpress buying the product, is only charged the variable cost of production, and that makes it very attractive to them to move to the focused production hub.
So I'd say what I just gave was five or six different components of what's driven the shift in the last several years, where I think the question was saying we're starting to see the impact in growth and on profitability and margins. It was not one silver bullet. It was really multiple years working through all these different things. I know that was a very long answer. Maarten, do you want to add anything to that?
No, I would love to add more of a background story real quick. 10 years ago, Robert and myself had the pleasure to have a sit-down dinner with, I think, the CTO of Amazon, Werner Vogels, to get advice specifically about platform building in a larger company. He also said, "It's going to take you 10 years to get to the final end of it, and there's going to be many value drops in between." We have certainly seen that, but we're really getting to that point where we have a mature platform. It's working. All those business synergies that Robert just mentioned are coming there, coming to fruition. It's hard when you buy companies. There's all the cultural differences. We've always done it these ways, and et cetera, what Robert said, too.
But now it's just becoming so obvious that MCP is that better thing to just work together with, that it becomes easier to have these conversations instead of hard than it was five, six years ago. Because MCP was indeed maybe too technically there, but not mature enough to really run the processes at scale on it. So it's been a long investment run, but we're finally getting there. I'm extremely proud of the teams and everybody that we're getting to this point, and it's a real asset now for the organization. So in the end, we have to listen to the device. I remember that Robert even asked, "Can we do it in five?" He certainly tried to make me go faster all the time.
Thank you both. Thank you. All right. We're going to stick with the topic of what MCP powers here. We had a question. This was pre-submitted. Along with inter-segment revenue, it is useful to see intra-segment revenue within the Upload and Print groups in particular. This seems like a useful figure to track the use of the mass customization platform. Can you provide a figure that shows intra-segment revenue over the last few years? I will just say that I'd like to point the asker of this question and everybody else as well that's on the call, Maarten did show a figure on a chart on slide 28 of our prepared presentation, and the chart there was the variable cost of goods from Cimpress fulfillment. That is across all of our businesses.
So it's what our businesses are transacting with each other, the variable cost of goods there. And what that means is that is a different number and a higher number than what is taken out and shown with intra-segment or inter-segment, which is what we report with our earnings announcement every quarter. So you do get a sense here with the number that we showed in Maarten's presentation on true business-to-business volumes.
Great. Thank you. Meredith, I think it is important, just one more clarification on that. That, I believe, was a chart of the variable cost of goods that we had. Internally, we focus on the cost of goods, not the revenue, because we are trying to lower the cost of goods, and different parts of Cimpress have different margins depending on their advertising intensity or their types of products. So it shows the trend you are asking about.
We do not plan to share that intra-segment, for example, within PrintBrothers or within The Print Group, on a quarterly basis like we do for inter-segment, but it is growing. I can say we do not have a team member today here from PrintBrothers, but that is the other part of Upload and Print besides Paolo’s portion. It is definitely growing between WIRmachenDRUCK, Print Alliance, and Drukwerkdeal. Paolo, you are here, so I would love to have you give some examples within Upload and Print within The Print Group, specifically what is happening and what are you seeing there.
Within The Print Group, also the intra-segment business is growing. That means Pixartprinting producing for Exaprint or Exaprint producing for Pixartprinting or other business units within the group. It is growing, and it is a substantial number. Beyond the value of the revenues, the value there is that each business can offer more products without having to develop their own capabilities in their own plants. Also, each business can serve their customers with a closer plant than the plant that they have available within their own business unit. As an example of the first case, Pixartprinting is using, or better the second case, Pixartprinting is using the plant in Montpellier, Mauguio, by Exaprint to serve their customers in France or the plant by Tradeprint in Dundee, U.K., to serve the customers in U.K.
On the other hand, because it works both ways, both Exaprint and Tradeprint use Pixartprinting plant for the production of labels because that is where the expertise of that particular category is concentrated. All this is allowed by the Cimpress Technology Platform, the MCP that we just talked about. It took 10 years for us to have to the level of today, and today this process is running seamless. Thanks to that, we are able to produce all this intra-segment business that goes on top of the inter-segment business, which is even bigger. That means the business that all of the plants of The Print Group are doing for all of the other business units.
The Print Group is serving every single business unit in Europe and also Vistaprint in Europe and in the U.S. At the end, these capabilities allow us to bring more choice and better value to the customers. It allows us to bring more volume, more growth through our specialized plans. Also, this is built on the capabilities that we already have, so more volume in the same plant means more efficiency and therefore more margin.
Thank you, Paolo. Thank you for being such a wonderful steward of our capital and the capital that our shareholders entrust to us because you are looking for efficiency gains everywhere you can and also ways to grow our revenue everywhere you can. Fantastic.
Like all of us.
Yeah. All right, we're going to move into a next question for Sean. Sean, this is a guidance question. What are the biggest factors that could deviate the FX neutral revenue guide from our target of 3%, both to the upside and to the downside? So hypothetical here.
Okay. Hypothetical. Top of my head, I would say the kind of a condensed version, on the upside condensed version of what you heard today. What are we doing with our launches of elevated products? What is the pace there? How quickly is that volume ramping? That is one. The reality is that the upside there, I think in terms of upside relative to our guidance, relatively limited just because those things have a natural growth curve to them, and that would happen kind of during the year. The next one is our partnership with Canva, and that would be clearly a call-out if that ramps up faster.
I think the other one to call out, which is less about how do we grow faster and more about where we have decay, how do we decay slower, which has a really big impact because that is still a meaningful portion of the business. That would be in things like business cards where we have planned for declines. Does that happen less than we had planned for? Or even in some of the channels that have similar characteristics where we have planned for a decline, like in the reseller channel. Does that happen slower? I think those are the things I would call out on the upside. On the downside, I hope we set our guidance appropriately realistically, we believe. On the downside, I would say, does that decay that I just mentioned happen faster than we expected?
Which has not been the case, but that would be the kind of inverse of the upside one that I just talked about. The other one is just, I think, macro environment generally, and we have talked about this for a long time. We perform well in difficult macro environments. None of these challenging macro environments are created the same. From a customer perspective, they are dealing with inflation, they are dealing with a complex trade environment, dealing with all things AI. It is a complex environment, so that is the other one I would call out. There is nothing specific there that I would call out in terms of what we are seeing, but on the downside, that is the other one I would call out.
Well, thank you. Let us stick with you, Sean, for the next question as well. Looking for a quick answer here. How do we think about the impact of rising interest rates, both operationally and from a balance sheet/leverage standpoint?
Yeah. Important topic these days. The headline here is that we have a mix of fixed and floating debt. On our floating debt, which is our term loan B, we also have interest rate swaps that we layer in. When you put all that together, we have a little over 50% of our debt that is fixed. We have the contracted swaps that kind of keep that relationship in place at least for the next two years, roughly. We also have, on the assets side, we have cash, and we have marketable securities, and our treasury team looks to get the highest deal possible on that. So those are sort of the two inputs as rates change. Every year in our 10-K, we have to disclose what a hypothetical 100-basis-point move in interest rates would be.
What we put in the last 10-K is about a $7 million increase if rates move by 100 basis points. That doesn't factor in what would happen on the cash side. So the net impact would be a little bit less. So it's small relative to our balance sheet. It's small relative to our cash flows. I think the other thing I'll just highlight that I mentioned in our slides is that, in my slides, we don't have our term loan and high yield mature in fiscal 2033. So we don't need to go to the market anytime soon, other than if it was to our benefit to reprice or something like that.
Great. Thank you. One more question that we've got before we close things out, which is about the Upload and Print segment. So how is the health of Upload and Print relative to macro in Europe? What kind of growth rate should we expect in FY 2027?
All right. Let me take that. The European market overall is slow, and this allows us to strengthen our position and take share. We see many smaller competitors have flat or falling sales. Our size, the fact that we are able to leverage our combined strength of all our businesses in Europe, our capital, our capabilities, all of that is our real differentiator compared to the market or to our competitors, because this make it possible for us to invest into new categories, to invest into new channels, into new geographies, like the example that we mentioned before about opening up a plant in the U.S. And this allows the Upload and Print division to continue growing in terms of profitability and to continue innovate, which is one of the key ingredients of our winning formula.
Excellent.
Yeah.
Yeah. Thanks.
Sean, do you want to add anything?
Yeah, just we don't give guidance by segment, from a revenue perspective, but maybe just two other things to add. One is, I think the environment and the kind of the structural impact of what Paolo just referenced also ties back into some extent of what I went through on the tuck-in M&A side, just in terms of how that dynamic plays a role in tuck-in M&A opportunities and valuation multiples and so on. The other thing is just, yeah, I think we would expect generally that the external growth in our Upload and Print portfolio, absent a couple maybe outliers, would be broadly in line with our consolidated revenue growth in terms of the true external growth. That gets complicated a little bit in what we report because, as was just talked about, we have these businesses, especially Paolo's businesses in The Print Group, fulfilling for Vistaprint.
That's revenue for the reported revenue there. So that makes the growth rate a bit higher. And then we do have some businesses there that are growing quite quickly, like Packstyle and Packaging growing very quickly. The offset is that we have some channels and some businesses that have more concentration in these channels that are declining, like the reseller channel, and Exaprint's a good example in Paolo's segment, where there's just more concentration there. That overall trend is good for our businesses at a Cimpress level, but it's a fact of life for some of those businesses that historically were more reseller focused.
Thank you, Paolo and Sean. I am going to turn the call back over to Robert for closing remarks.
Well, I want to say thank you again for all the time you've invested today to learn about us and to learn about Cimpress. I hope you really take away the three core messages I outlined in my opening presentation. Again, those were that our strategy and our investments are growing our customer wallet share and improving our scale advantages. Second, we have really significant and clear actionable levers across both the top-line growth areas and the efficiency in cost. Those levers directly support our financial plans for fiscal 2027, the year we're in now, and next year, fiscal 2028, establishing a really firm foundation for growth beyond fiscal 2028 that will help us continue to build our long-term intrinsic value per share. Thanks again for your time, and please have a great day, everyone.