Virtual Investor Conference today. Our next presenting company is Deluxe Corp. The ticker is DLX. Our presenting company is led by Barry McCarthy, President and CEO, and Chip Zint, Chief Financial Officer. We also have Brian Anderson, VP of Strategy and Investor Relations with us. Now, before we begin, we will have time for Q&A following prepared remarks. If you would like to submit a question, you do not need to wait until the end. Feel free to just hit the Q&A prompt at the bottom of your screen. You can do so at any time during our time together here. With no further ado, we can turn the call over to Deluxe. Gentlemen, good morning, and thank you for joining us today.
Great. Thanks, Mark.
Thank you.
Good to be with you all. Let's click forward a couple of pages here, Brian, and tell you who we are. This is Deluxe with just the sort of big numbers. Over $2.1 billion of revenue. You can see the Adjusted EBITDA number. And just to give you a sense of scale, the company processes over $2 trillion in payments annually. In our merchant business, over $40 billion, and $175 million of cash flow with a nice, attractive dividend. It's a Fortune 1000 company, and you can see in the chart in the middle that the business is roughly 50-50, half print, half the merchant data and B2B businesses. We'll talk some more about that.
One of the exciting things I'll preview for you is that we think that this moves past 50% on the merchant data and B2B payments side of the equation this year, which is an inflection point for the company. To also to give you some sense on the far right, we serve over 4,000 FIs, millions of small businesses, and hundreds of the world's leading brands. To give you a sense of the trust and scale we have in the industry, we serve 180 of the top 200 financial institutions. Of course, that only happens if you are a trusted partner that delivers on promises, which we have a great history of. If we go to the next page, I'll just give you a quick overview on the history of the company.
If you're unfamiliar with the company, or you have known the company of old, the company's fundamentally a different company today than the company you may know or may think you know. Of course, the company started as a check printer, and from the late nineties to 2007, the core business, which was check printing, was in decline. They tried to address that in the window of 2008 - 2018 with a very aggressive shift and diversification strategy around M&A. They bought over 50 different companies in that period of time, everything from a web hosting company in Australia to a logo design company in the U.K. to a payroll processing company in Canada to a company in the U.S. called Bags & Bows that made retail packaging for spas.
In the time that we have been here leading this transformation, which is the third box, the third column, we have very systematically and deliberately narrowed the focus of the portfolio. We've sold dozens of parts or businesses in total that had been acquired in the previous period to focus on businesses where we had a right to win, where we had scale advantage, and we believe we could continue to grow those businesses for the future. Where we are today is we are a business that has, we call it a four-legged stool. There's the print businesses, there's B2B, data-driven marketing, and merchant. We are using the strong legacy we have acquired over this entire 100+ year history in paper-based payments to become a leader in digital payments and data.
Our business today is really driven by our payments and data business. In 2026, I mentioned before, that business becomes the largest business in our portfolio, which is a steady march forward. Back in 2021, that business was around 30% of the company. This year it'll end more than 50%. Just on a straight line trajectory, you can see over the coming years, this increasingly becomes a payments and data story, which we're very proud of, and we're delivering great growth there. The payments and data business in 2025 grew double digit, and the company grew overall. Strategy's simple. I've already told you. You leverage that legacy we have, the strength we have from the legacy print businesses to grow in payments and data.
Use that history we have of delivering paper-based payments to become a leader in digital payments and data, and we've done that. You can see the numbers here. I don't need to read the numbers to you, but you can see the growth story here is particular in the B2B and the, I'm sorry, in the payments and data business, particularly attractive. Our goal, as you can see across the bottom of the page, are to shift our mix towards payments and data, which we're doing aggressively. I've already described that. Deliver operating efficiencies. Operate the company more efficiently all the time, which will enable us to improve our balance sheet with paying down debt and lowering our leverage ratio.
I will tell you, there's a key insight I'll foreshadow that Chip will give you in just a minute, which is that we will also get below a 3x leverage ratio this year, which has been a long-standing goal of ours. These are the businesses we're in today, all with very attractive TAMs. The check business is exactly what you think it is, printing checks for consumers and businesses. What you may not understand is that check is still a significant portion of B2B payments. About 40% of all B2B payments today are still done by check. There really are no viable substitutes. You may, in your own mind as a consumer, think that consumer checks are. You haven't written a consumer check in a long time at a grocery store.
That's true because that has been displaced by debit cards and Zelle, and PayPal, and Venmo, et cetera. That's not where the profit is and where the growth, or not the growth, but the bulk of the volume is in the B2B checks, and that trajectory of soft decline has been very consistent over the last decade, and we don't see any reason why that's going to change. We don't see any viable substitutes on the horizon that would allow a payment to actually travel with payment advice. Promotional products business often travel with check business, like forms or deposit tickets, et cetera. We also do branded apparel. Now, the businesses that we're really focused on for the future are payments and data, and these businesses do what just the page says.
We help small- to midsize businesses in the Merchant Services business accept credit cards and debit cards. In the B2B business, we're really about accounts receivable, managing inbound payments, and helping a treasurer manage end-to-end their receivables on their desktop. In the data business, we help customers find their next customer. Very large data lake. We think the largest data lake of consumer and small business data in the industry, combined with great AI tools and strong people that make those tools better, and that business grew 30% last year. Again, this group of businesses, payments and data, last year grew double-digit.
I'm not gonna read this to you, but I will take you all the way to the bottom line, which is that we improved our EBITDA, we improved cash flow, and we improved our margin, and we've lowered our leverage ratio sequentially and on our pathway to be less than 3x levered in this calendar year. I do wanna point out one point specifically here on this third row, increasing cash flow. This is a company that is very focused on generating cash, and we generated $175 million of free cash flow in 2024, which is a 75% year-on-year increase. At our last investor day in December of 2023, we promised to get to that range by the end of 2026.
We delivered that a full year ahead of schedule. I think it's just important to note and reinforce the cash-generating potential of this business and how we're using that to grow the business, and reduce debt. If you go to the next page, I think this is a good place to shift gears and have Chip come in and give you a bit about guidance and maybe a little bit more about each of the businesses.
Great. Thanks, Barry. Obviously, the previous page really showed you how we executed across 2025 and specifically how that execution aligned to our long-term stated goals, which I'll get to in a minute. If you think about the near term and the guidance we put out for 2026, I think it's very clear that we're signaling sustainability of this strategy and a continuation of where we were successful in 2025 and plan to be beyond. Revenue growth continuing in the low single-digit range implied in the guidance with EBITDA growing faster than revenue, anywhere from 3%-9% in our guided range, with adjusted EPS growing even faster as we pay down debt, reduce interest expense.
Then ultimately, to Barry's point, very, very focused on free cash flow following up the $175 million year that was 2025 with roughly $200 million this year, continuing to expand free cash flow conversion, which obviously helps that strategic goal of delevering and improving the leverage ratio. Obviously, the guidance implies everything strategically that we're trying to accomplish, and this page right here in particular really summarizes that. Hopefully you can connect those dots as I go through it, but it's very, very clear. As we focus on the mix shift and we focus on rotating our revenue more towards payments and data, we obviously believe over time that leads to a more sustainably growing business that's actually accelerating, getting away from low single digits, moving more towards the mid single digits over time.
Over a long-term horizon, we would like to see that growth consistently be more in the 2%-4% range. We wanna continue to focus on that strategic goal number two, which is driving operational efficiencies, improving our profitability, which we believe will mean EBITDA will continue to grow faster than revenue. As we do that and we focus on growing the EBITDA, getting more efficient, that'll lead to sustaining improved free cash flows, bringing the leverage ratio down, and obviously margins expanding overall. Over top of it, as Barry said, maintaining return of capital to shareholders through our dividend, continuing to be a strong-performing company. We believe that all comes together in a value creation algorithm that will lead to 15% annual shareholder returns or better over the horizon.
If you jump ahead, you know, one of the things we really focus on is being very, very disciplined stewards of capital allocation. I think you've seen us over this horizon as we've done everything Barry laid out. Navigating the company from the period of rapid M&A back in the mid-2000s to what we've done to shed the portfolio, to right-size the business, to invest for growth. We've done all of these things concurrently together, which we think is a testament to how we think about capital allocation. We are very, very focused on strengthening the balance sheet, paying down the debt, getting the leverage ratio below three times, as we've mentioned a few times, and we're on path to do that this year and actually signaled we would be there by the midpoint of the year.
We're doing that all simultaneously while continuing to invest internally for organic growth. We spend roughly $90 million-$100 million a year in CapEx, and most of that is going towards product development, software development, capital, where we are investing in growth products with high returns. We're very focused on putting that money to work and being able to grow this portfolio organically. Lastly, as we mentioned, we've done all of this over the last few year horizon while maintaining that dividend.
The implied yield has come down as the overall value of the business has improved, and we think that is the overall stated goal is to continue to maintain that level of return of capital, but obviously have the yield be lower as a result of the overall enterprise value expanding. On the horizon, as I talked about, I think this is a really good page that shows you just the progress we have made along this journey. Keeping in mind we've been doing all three of those capital allocation priorities concurrently, you can see as we navigated the divestiture window of this phase back in 2022 through 2024, leverage was plateauing a little bit as we were divesting EBITDA while paying down some debt.
Obviously, as we've gotten focused on growing EBITDA, improving free cash flow, you saw a material improvement in 2025, starting the year at 3.6x levered, ending the year at 3.2x levered, about a quarter ahead of pace. We're well on our way to get below 3x this year and be there by the midpoint of the year, continuing this very solid and consistent trajectory we've been showing for a few years. In terms of capital structure, we are in a really solid place in terms of our debt maturities, our liquidity, and the flexibility we have built into the business. We did a refinancing of this debt, majority of it back in late 2024. It has left us with a lot of optionality. Our maturity wall is not until 2029. We're roughly 75%...
Sorry, we're roughly 60% fixed rate debt. This just leaves us a lot of options to continue to pay down debt, the variable rate debt, and then be able to be in a position to maintain liquidity while assessing long-term maturities and be able to address the 2029 maturities in the next few quarters or year or so when the time is right. We feel really good about the flexibility of our capital structure and where we sit. If you think about how this all comes together, Barry talked about everything in the aggregate, the overall strategy, the TAMs and markets we're trying to attach. I'll just do a quick double-click on each of the businesses. Inside of the Payments and Data business, obviously you have the Merchant Services business.
That business is growing at mid-single digits% with EBITDA margins expanding nicely over the recent multi-year horizon. Implied in our guidance range this year is EBITDA margins in the low- to mid-20s% range. Obviously, we believe that this business is executing very well. Ever since we acquired this business back in middle of 2021, this is the one material acquisition we've made along this journey, creating our Merchant Services business. This is a platform, we do our own processing, and we believe this is a business that continues to grow organically with margins expanding. Go to the next business, which is our B2B payments business. Similarly growing, it's more on the lower single-digit level right now.
Obviously expecting over time that to be able to accelerate, but as we navigate its own internal journey from the paper-based world to the digital world, we've had to make a bit of a business model transformation play here, moving from more previously one-time revenue to now more of a recurring or reoccurring model. We've now grown low single digit last year. We believe we'll continue that low single digit trajectory in 2026. Obviously, very similar to the merchant business. We have made material progress expanding margins, expanding profitability over this horizon as we've both grown the top line as well as driven adoption of efficiency projects and made the business just more profitable. The last of our three growth business is our Data Solutions business. This business has grown extremely nicely over the last few years.
We grew north of 30% back in 2025, as you can see. We're continuing to model sustained growth here in the mid- to high-single-digit range in 2026. Overall margins are anticipated to be pretty stable over the multi-year horizon in this low- to mid-20s range. Obviously we love the way we are gaining share in the market, growing this business, expanding into new verticals, and really driving a nice solid top-line growth lever for the business. Then lastly, we talked about it at the enterprise page, if you think about print continuing to maintain low- to mid-single-digit declines on the top line with margins stabilizing in the low 30s, roughly around 32% right now, continue to just slow the amount of top-line decline and keep profitability declines in line with that overall trajectory.
When you put it all together, it means this is the progress we're making. As Barry alluded to, you know, we have made material progress shifting that mix, going from 40% at the end of 2022 to north of 50% in terms of revenue profile mix in 2026. All the meanwhile, continuing to grow EBITDA, expand the margin rate at a CAGR of mid-single digits, going from the high $300 million back in 2022 on a comparable adjusted basis, all the way up to more the mid-$400 million this year in our implied guidance range and overall EBITDA margins expanding across this horizon.
I'll finish, I think, the way I did in the middle when I took over, just reminding everybody just the value we drive and why we think Deluxe is such a compelling investment opportunity and company in the market, and someone who we think our partners are recognizing and someone everyone would wanna do business with. That's because we are systematically changing the profile of this business. The legacy, organic, declining, print-specific payment company is gone. We are now balancing the cash flows, the relationship, everything that comes from the positive parts of that business to invest in payments and data, develop a company that's sustainably growing low single digits with profit growing faster than revenue, with solid cash flows, with a healthy balance sheet and leverage below 3x .
That gives us optionality, gives us opportunistic ability to think about organic and inorganic opportunities with margins expanding, returning value to shareholders through the dividend, and all of that leading to a healthy company that is returning at least 15%, annual shareholder returns. We think the strategy is clear, the execution is clear, and we think the future is very promising for Deluxe. With that, Mark, we are ready for questions.
Thank you very much. For those, as a reminder, if you would like to submit a question, just click on the QA prompt at the bottom of your screen and feel free to submit one. I did want to maybe start with, maybe you could talk a little bit about a more recent announcement, the decision to sell Safeguard. That's obviously since you know, since you last reported earnings. Maybe you could just touch a little bit on the Safeguard deal and how that plays into the overall strategic vision for the company.
I'll take that at the top level, and then Chip can jump in here too. Safeguard is, think about them as distributors that were sort of licensed distributors of of all of our products and solutions, particularly in the print business. This was a component of the print business. Those distributors, some of them were owned, some of them were licensed. We've sold that entire distribution channel to another company whose only business is a distributor network. That will reduce our rate of decline in the print business and but we keep them as a customer, so we'll still have those folks as customers of our product to distribute into their into their customer base.
Yeah, I would say, Mark, if you think about the big three strategic priorities, shifting the mix more towards payments and data, driving operational efficiency, and de-levering and improving the balance sheet, the Safeguard transaction is straight down the fairway of accomplishing all three. So obviously we're able to reduce our exposure to print, get smaller in the print space, while maintaining the reseller relationship on the higher margin check and printed offerings that we like. The overall Safeguard business in general was lower profitability than the combined print portfolio. So if you think about the blended margins in the 30s, this piece was much, much lower, so it's gonna give us room to actually expand profitability, look for efficiencies in the remaining company once everything settles. Then lastly, we did sell it.
It wasn't a super material divestiture, neither on the EBITDA side nor the proceeds side, but it's not gonna work against us in terms of leverage. It really checked all three boxes, helps move us forward towards these strategic goals and I think just allows us to continue to focus more on running the legacy print side as efficiently and healthy as we can, while also allowing us to continue to rotate more towards the payments and data growth side.
Excellent. That's actually a perfect transition to some of the questions that we have coming in, which we have several, so I do wanna highlight these. One of which is asking on the repositioning from legacy to payments and data, and the question is around. How does a steady state revenue mix look to you in three to five years, and what has to go right to get there?
We absolutely fundamentally believe that our pathway with accelerated growth in the payments and data business is our company's future. Just like you've seen us move from 30% to over 50% this year on payments and data, I think you would expect to see that continue to progress. The payments and data businesses in the last year grew double-digit. You can just straight line that forward and see what will happen. We think that is the company's future. That in that window of time it will be not just the payments and data are bigger than the print business, they will be materially larger than the print businesses.
We think that's gonna be great for the sustainable growth of the company and for the profit growth of the company also because those are scale businesses, so as more volume comes on those businesses, you have opportunity for margin expansion. Chip, what do you want to add on that?
Yeah. I think if you go back to our late 2023 investor day, we signaled that in 2026 that would be the time where top line would become equal and at parity between the two, which obviously is happening. We signaled back then that we wouldn't quite be to the part where profitability is at parity. To Barry's point, we would expect the payments and data side of the business to continue to grow in the mid-single digits or better level, kind of mid- to upper-single digits% over the horizon, while print continues to decline low- to mid-single digits%. That math is gonna keep showing that same progress, right? A few years we'll have moved from 50% closer to 60%. We will keep making that portfolio rotation organically.
Obviously we think over that horizon, over the next few years, the profit side comes into parity as well, which is a very key defining moment for us. We keep executing the strategy, we keep organically rotating over that mix, and we'll be in a place in a few years where payments and data are north of 60% with hopefully profits more at 50/50 or better, which allows us to continue to expand this trajectory long-term.
Excellent. We do have a question regarding the payments segment, and maybe you could talk a little bit about the areas of differentiation versus commoditized offerings, and where do you see pricing pressure today?
Just as a reminder for everybody, the merchant business really has three tiers. There's the mega tier, which are the big giant merchants, and there are micro merchants. The micro merchants are served by Square, PayPal, et cetera. The top giant merchants are really served by the giants like Global Payments and Fiserv. There's a great big fat middle, which is where our businesses with real volume, real transactions, with a strong recurring revenue, every time that merchant does a transaction, you've got an opportunity to earn, and that's where we compete. What we have that we think is compelling, and we know is compelling because it's why we're winning, is we have the right combination of technologies, a full suite of APIs, as well as flexibility on our infrastructure to adjust to whatever the needs might be of a customer.
We put all that together with outstanding service. Everybody talks about service or say they think they're good at service, we actually can prove it. There's a group called ATSI, A-T-S-I, that measures the support level and service, and we are always at the top of the heap. We are demonstrably better on service. If you're a mid-sized business, if your payment system doesn't work or you have a problem with how your payments are working, you are out of business. Being able to have good support is essential and core, and that's how we clearly differentiate. If you look at the wins we've had, banks are choosing us as their partner because, especially mid-sized banks, the reason they exist is they deliver better service to their customer.
They can't have their merchant offering have bad service at the same time they're trying to make a claim about good service overall. We win those. Every time we get somebody into our service center in Fort Worth, our close rate is incredibly high because the differentiation is so clear. It's a combination of the right product with features and functionality and great service and, of course, competitive pricing. The other part of that question mark was on pricing pressure. And of course, it's a competitive marketplace, but we think we're able to manage that effectively, and manage pricing appropriately and effectively across the portfolio.
Okay. Excellent. We do have the time to sneak in another one here. Sort of curious about one of the questions was, regarding the data business, and maybe you could talk a little bit about your go-to-market strategy in the data business and how sticky it is with customers.
Sure. The data business, just to refresh anybody that isn't familiar, that business, the purpose of that business is to help other businesses find their next customer, particularly in marketplaces where there's a high lifetime value for that customer. The way we get there is that we have aggregated a huge amount of data. We believe we've built the largest consumer and small business data lake in the industry. On top of it, we put a GenAI tools, and those tools are managed by real humans to make those models better with time. When we go head-to-head competition with anybody in the marketplace, we almost always win because of the return on investment of the marketing dollar that, being put into our data-driven marketing, tool, has a higher return virtually than anything else for the customer.
The business historically has been focused, and FI still is a significantly important channel. We've also moved to other channels like property and casualty insurance, home automation, telecoms, mobile phone operators in particular, online merchants trying to move to the physical world. All of those businesses are looking to acquire customers, and we provide them a pathway and a means to do that at a very high conversion rate at a very, very great return on investment. The question about stickiness. I don't remember the last time that we've actually lost a customer. We consider this business a recurring business, meaning that once we have a customer, the probability that we're gonna get fired or not used again is very low.
The only thing we don't know is how much marketing a customer is going to do in a particular year, although we work with customers six months into the future, so we always have a pretty decent idea what the future looks like. It's a great business. Grew 30% a year. Head-to-head competition, we almost always win. I can't remember the last time we lost a customer, and we're getting a larger share of wallet, the spend within the customers we already have.
Excellent. Well, that brings us to the close, the conclusion of our time together today. I did want to leave a moment for closing remarks. Again, thank you for joining us today at our conference.
Appreciate it. Appreciate everybody's interest. I think you may have a misconception about what Deluxe has been. Deluxe today, we're gonna cross the threshold with over half of our business in the payments and data business, making the future very clear. We're a cash-generating machine, $175 million last year, $200 million this year is what we've committed. We're paying down debt, improving our balance sheet. Our future is very clear as a payments and data company that generates great cash flow, and it has a bright future.
Excellent. Excellent. Well, it's been a really, really good presentation. Thank you so much for that and very successful execution of your strategic plan over the last few years. I wanna thank everybody for joining us this morning, and everybody have a wonderful and productive remainder of the day. Thank you.
Thank you.