Cimpress plc (NASDAQ:CMPR) Q2 2024 Earnings Call Transcript

And so finally, I’d say, we see how we move forward with the VistaCreate and 99designs acquisitions less of building them or not as building with standalone businesses, but rather exposing the services and capabilities in using the talent we acquired with that to improve the VistaPrint experience overall, where the real value is for customers because of the size of Vista Print and for shareholders because of the size of the revenues and cash flows out of Vista Print.

Meredith Burns: Thank you, Robert. Okay. I’m going to stick with you for one more question before I let you off the hook. Robert, how is customer adoption of the Vista x Wix digital offering progressing?

Robert Keane: First of all, we have a 100% completed migration off of our legacy website builder product to the Wix website builder. We finished that up in the first quarter. And it is just a much better customer experience full stop, and we’re happy with that. We also see the value per customer is materially better, our value per customer in terms of cash flows. Progress has been good. It’s still a situation where most of our focus is continuing to optimize how we integrate what is a third-party holding controlled product experience, the Wix experience, which we really see is great for customers and make sure it integrates into our site well and making sure the funnel that drives customers there is working, removing friction for customers.

Now that the bulk of the effort, which was getting all of the legacy site builder customers migrated to Wix is over, we can focus more on those things. Digital bookings grew year-over-year in Q2, just we finished up, they also did in Q1, and we expect digital revenues to grow, again, on a full year basis. And as we move forward. We think we’re seeing an uptick in customers, but again an uptick, material uptick in the lifetime value of each customer. So in summary, we are happy with where the Vista x Wix digital offering is. We have a lot of opportunity in front of us, but it’s going in the right direction.

Meredith Burns: Thanks Robert. Sean, I’m going to ask you a question now, And that is, what is the implied growth for Vista in the second half of the year in the 7% revenue guide. So 7% reported guide or 5% organic constant currency guide.

Sean Quinn: Yes. We haven’t given revenue guidance at a segment level for the remainder of the year. So maybe just a few things to cloud. The comps in H2, as you can see, are different depending on the segment and when price changes were happening last year. I think that, I think you can assume that the Vista expectations in the second half of the year are close to the consolidated organic constant currency guidance that we gave of at least 5%. Probably won’t get more specific. And that as for, the reported revenue growth, in general, there’s going to be less based on the current rates, we expect less currency impact in the second half of the year. And so right now for Vista, I would expect that the reported growth and the organic constant currency growth would be quite close together.

Meredith Burns: Great. Thank you. Another one for you, Sean. As you mentioned, Input prices are lowering and revenue per customer is increasing. What’s the response from customers to price increases? And how are you able to lower prices to attract upload and print?

Sean Quinn: On the, from a price perspective, we there hasn’t really been much change over the last quarter, in our direct increase, decrease. As I said last quarter, we find ourselves now in more kind of optimization mode. So I don’t expect any step function changes, upward or downward based on, what we see today. It’s more back into the continuous optimization, testing based on price elasticity, and so on. So that’s the mode that we’re, that we’ve been in. I think one of the things to consider is that the pace of input cost increases in part of our business and take paper costs, for example, was extremely high. And so we weren’t just passing that all on, and there were parts of that business where we were having to absorb a piece of that.

In paper costs, for example, and some regions go up 50% or more, that’s not something that you can just the next day pass on. And so I think that over time, as input costs have settled in, combined with the pricing steps that we did take over the last 18 months or so. We’re at an equilibrium that right now feels like that’s okay. And again, we’ll continue to optimize within that. In terms of, are you able to lower prices to attract upload and print? We haven’t seen the need to do so. Again, we’ll continue to test and optimize. But orders are still growth, and so it’s in upload and print, it’s really the things that Robert talked about earlier in terms of some of the headwinds there for growth. So I don’t expect big changes in the near-term.

And also, we did not make big changes, over the last quarter, not only in upload and print, but elsewhere too.

Meredith Burns: Next one, I’m going to ask Robert. Have you done the math on what upload and print’s growth rate was in the quarter excluding the reseller channel?

Robert Keane: Yes. We’ve done the math. We don’t disclose that publicly, one, because every business in the world, has overall results and profits to contain a mix of different growth rates of different segments, but also for competitive reasons. But I can give you a little bit of context here. Now remember that our Upload and Print businesses, every single one of them have reseller business. But Exa and TradePrint, which are part of the Print Group, traditionally were a 100% reseller. And they are shifting away, but they really started with a 100% reseller. Whereas WIRmachenDRUCK, Printi and Pixartprinting, well, the first three of those, excluding Pixartprinting are part of PrintBrothers. Pixartprinting is part of the Print Group, also has resellers, but a much it’s a minority of their business.