CPI Card Group Raises 2026 Guidance Again

The Tip Desk · November 4, 2026 · 3 min read

Third-quarter revenue hit a record $158.4 million, up 15%, as the company lifted full-year revenue-growth and free-cash-flow targets for a second straight quarter.

CPI Card Group Inc. (PMTS), a payments technology company serving U.S. financial institutions, processors and prepaid program managers, reported third-quarter revenue of $158.4 million, a quarterly record that matched the 15% year-over-year pace of the second quarter.

Net income rose 117% to $5.0 million, or $0.41 a share, from $2.3 million a year earlier. The company said the increase came primarily from higher operating income, lower interest expense and a lower effective tax rate, partially offset by $1.2 million of acquisition and integration costs tied mainly to TRISM and Arroweye. Adjusted EBITDA increased 17% to $27.5 million, a faster year-over-year gain than the 7% rise to $24 million in the second quarter.

Gross profit increased 23% to $50.3 million, outpacing revenue and lifting the gross margin 200 basis points to 31.7%. The company attributed the expansion to strong performance and better margins in Secure Card Solutions and Prepaid Solutions, plus accelerated growth in higher-margin Integrated Paytech.

Secure Card Solutions, the largest segment, generated $111.9 million of revenue, up 13%, on higher volumes of contactless cards. Segment gross profit rose 23% and gross margin increased 220 basis points to 25.3%, primarily from increased revenue. Prepaid Solutions revenue increased 15% to $26.9 million on closed-loop sales and higher-value open-loop packages; segment gross profit rose 28% and gross margin increased 340 basis points to 34%, which the company said reflected increased revenue and favorable sales mix. Integrated Paytech revenue increased 20% to $23.5 million, with gross profit margin remaining above 55%.

The company said Integrated Paytech revenue growth is expected to more than double in the fourth quarter versus the third quarter, citing continued momentum in Card@Once, TRISM instant issuance and a more favorable year-over-year comparison.

CPI raised 2026 revenue-growth guidance to low-double-digit and free-cash-flow guidance to $50 million to $55 million, up from high-single-digit to low-double-digit revenue growth and $45 million to $50 million of free cash flow after the second quarter. It continues to expect low-to-mid single-digit Adjusted EBITDA growth and a year-end net leverage ratio toward the low end of the 2.5x to 3.0x range.

Through the first nine months of 2026, revenue increased 16% to a company record of $454.6 million. Cash from operating activities reached a record $57.3 million, compared with $19.9 million a year earlier, and free cash flow was a record $46.1 million, versus $6.1 million. The company said the free-cash-flow increase reflected operating performance, working-capital improvements including lower inventory purchases, and lower capital expenditures.

As of September 30, 2026, CPI had $15 million of cash and cash equivalents, $15 million of ABL revolver borrowings and $238.5 million of 10% senior secured notes due 2029. The net leverage ratio was 2.6x, down from 3.6x in the third quarter of 2025.

The company completed a secondary offering of remaining shares held by Parallel49, concluding that investor’s ownership after nearly 20 years and expanding the public float. Arroweye integration is nearing completion, with more than 30 new customer wins since the May 2025 acquisition, including a top-15 issuer that had not previously used CPI. TRISM, acquired in June 2026, is described as performing on track with expectations.