Pitney Bowes | 10-K: FY2025 Revenue Misses Estimate at USD 1.893 B

Revenue: As of FY2025, the actual value is USD 1.893 B, missing the estimate of USD 1.899 B.EPS: As of FY2025, the actual value is USD 0.84, missing the estimate of USD 1.04.EBIT: As of FY2025, the actual value is USD 293.98 M.Segment RevenueSendTech SolutionsTotal Revenue: Decreased to $1,256,001 thousand in 2025 from $1,354,032 thousand in 2024, a -7% change. In 2024, it decreased to $1,354,032 thousand from $1,405,864 thousand in 2023, a -4% change .Services Revenue: Declined to $569,403 thousand in 2025 from $588,046 thousand in 2024 (-3%). In 2024, it declined to $588,046 thousand from $595,319 thousand in 2023 (-1%) . The 2025 decline was primarily due to a declining meter population, while the 2024 decline was due to the declining meter population and a shift to cloud-enabled products, partially offset by growth in shipping subscriptions and digital delivery services .Products Revenue: Declined to $364,709 thousand in 2025 from $430,845 thousand in 2024 (-15%). In 2024, it declined to $430,845 thousand from $471,448 thousand in 2023 (-9%) . The 2025 decline was mainly due to customers extending leases rather than purchasing new equipment, the impact of prior year product migration, and a significant deal in the prior year . The 2024 decline was primarily due to customers opting to extend leases of existing advanced-technology equipment .Financing and Other Revenue: Declined to $321,889 thousand in 2025 from $335,141 thousand in 2024 (-4%). In 2024, it declined to $335,141 thousand from $339,097 thousand in 2023 (-1%) . The 2025 decline was driven by prior year product migration and business mix .Presort ServicesTotal Revenue (Services): Decreased to $636,628 thousand in 2025 from $662,587 thousand in 2024 (-4%). In 2024, it increased to $662,587 thousand from $617,599 thousand in 2023 (7%) . The 2025 decrease was mainly due to a 7% decline in total mail volumes, partially offset by pricing actions . The 2024 increase was primarily due to pricing actions and product mix, with First Class Mail and First Class Flats, and Marketing Mail Flats/Bound Printed Matter contributing to revenue increases .Operational MetricsSendTech SolutionsCost of Services: $196,143 thousand in 2025, a 10% decrease from $218,108 thousand in 2024 . $218,108 thousand in 2024, a 6% decrease from $232,975 thousand in 2023 .Cost of Products: $212,366 thousand in 2025, a 13% decrease from $244,203 thousand in 2024 . $244,203 thousand in 2024, an 8% decrease from $265,360 thousand in 2023 .Cost of Financing and Other: $13,807 thousand in 2025, a 21% decrease from $17,461 thousand in 2024 . $17,461 thousand in 2024, a 10% decrease from $19,407 thousand in 2023 .Total Costs of Revenue: $422,316 thousand in 2025, a 12% decrease from $479,772 thousand in 2024 . $479,772 thousand in 2024, a 7% decrease from $517,742 thousand in 2023 .Gross Margin: Declined to $833,685 thousand in 2025 from $874,260 thousand in 2024 (-5%) . In 2024, it declined to $874,260 thousand from $888,122 thousand in 2023 (-2%) .Gross Margin %: Increased to 66.4% in 2025 from 64.6% in 2024 . In 2024, it increased to 64.6% from 63.2% in 2023 . The 2025 increase was due to headcount reductions and cost savings initiatives . The 2024 increase was primarily driven by improvements in gross margin due to growth in enterprise shipping subscriptions and digital delivery services .Selling, General and Administrative (SG&A) Expense: Declined to $398,230 thousand in 2025 from $461,737 thousand in 2024 (-14%), primarily due to lower employee-related expenses and overall cost savings initiatives . In 2024, it declined to $461,737 thousand from $485,080 thousand in 2023 (-5%), primarily due to lower employee-related expenses and credit loss provision, partially offset by higher professional and outsourcing fees .Research and Development (R&D) Expense: Declined to $15,968 thousand in 2025 from $29,883 thousand in 2024 (-47%), primarily due to lower employee-related expenses and overall cost savings initiatives . In 2024, it remained relatively stable at $29,883 thousand compared to $29,905 thousand in 2023 .Other Components of Pension and Post Retirement Costs: $7,298 thousand in 2025 compared to -$2,111 thousand in 2024 . -$2,111 thousand in 2024 compared to -$2,245 thousand in 2023 .Adjusted Segment EBIT: Increased to $412,189 thousand in 2025 from $384,751 thousand in 2024 (7%) . In 2024, it increased to $384,751 thousand from $375,382 thousand in 2023 (2%) .Presort ServicesCost of Services: $398,771 thousand in 2025, a 5% decrease from $417,741 thousand in 2024 . $417,741 thousand in 2024, a 3% decrease from $432,229 thousand in 2023 .Gross Margin: Decreased to $237,857 thousand in 2025 from $244,846 thousand in 2024 (-3%) . In 2024, it increased to $244,846 thousand from $185,370 thousand in 2023 (32%) .Gross Margin %: Increased slightly to 37.4% in 2025 from 37.0% in 2024 . In 2024, it increased to 37.0% from 30.0% in 2023 . The 2025 gross margin decrease was partially offset by a $5 million favorable cost adjustment . The 2024 increase was due to higher revenue, lower transportation costs, cost savings from the 2023 Plan, and investments in automation and higher-throughput sortation equipment .Selling, General and Administrative (SG&A) Expense: Declined to $72,391 thousand in 2025 from $78,860 thousand in 2024 (8%), driven by lower credit loss provision and employee-related expenses . In 2024, it increased to $78,860 thousand from $74,230 thousand in 2023 (-6%), primarily due to a higher credit loss provision .Other Components of Net Pension and Postretirement Cost: $189 thousand in 2025 compared to $202 thousand in 2024 . $202 thousand in 2024 compared to $228 thousand in 2023 .Adjusted Segment EBIT: $165,277 thousand in 2025 compared to $165,784 thousand in 2024 (0%) . In 2024, it increased to $165,784 thousand from $110,912 thousand in 2023 (49%) .Corporate ExpensesCorporate Expenses: Decreased to $116,173 thousand in 2025 from $152,503 thousand in 2024 (24%), primarily due to lower salary expense and cost savings initiatives . In 2024, it decreased to $152,503 thousand from $175,951 thousand in 2023 (13%), primarily due to lower salary expenses, professional and outsourcing fees, non-cash foreign currency revaluation gains, and other expense savings, partially offset by higher variable compensation .Consolidated ExpensesSG&A Expense: Decreased $96 million in 2025 compared to 2024, primarily due to lower employee-related expenses, professional and outsourcing fees, and insurance expense, partially offset by higher non-cash foreign currency revaluation losses . Decreased $64 million in 2024 compared to 2023, driven by lower employee-related costs, a favorable impact from intercompany loan revaluation, and overall cost savings initiatives, partially offset by higher variable compensation .R&D Expense: Decreased $17 million in 2025 compared to 2024 due to headcount reductions and cost savings initiatives . Increased $2 million in 2024 compared to 2023 .Restructuring Charges: Decreased $18 million in 2025 compared to 2024, with employee severance charges decreasing by $25 million, partially offset by a $7 million abandonment charge for a corporate office closure . Increased $25 million in 2024 compared to 2023 due to actions under the 2023 and 2024 Plans .Other Components of Net Pension and Postretirement Cost: $7,543 thousand in 2025, $89,044 thousand in 2024, and -$8,256 thousand in 2023 . The 2024 amount includes a $91 million settlement charge .Other Expense (Income): Declined $62 million in 2025 compared to 2024, primarily due to lower charges related to the Ecommerce Restructuring and a prior year asset impairment, partially offset by a higher loss on debt redemption/refinancing . Increased $92 million in 2024 compared to 2023 due to $67 million in Ecommerce Restructuring charges, a $14 million increase in debt redemption/refinancing costs, and a $10 million asset impairment charge .Depreciation and AmortizationSendTech Solutions: $45,524 thousand in 2025, $45,868 thousand in 2024, and $46,979 thousand in 2023 .Presort Services: $37,029 thousand in 2025, $35,825 thousand in 2024, and $33,642 thousand in 2023 .Corporate: $29,022 thousand in 2025, $32,276 thousand in 2024, and $30,119 thousand in 2023 .Other Operations: $0 in 2025, $516 thousand in 2024, and $1,984 thousand in 2023 .Total Depreciation and Amortization: $111,575 thousand in 2025, $114,485 thousand in 2024, and $112,724 thousand in 2023 .Capital ExpendituresSendTech Solutions: $42,573 thousand in 2025, $44,351 thousand in 2024, and $44,975 thousand in 2023 .Presort Services: $14,026 thousand in 2025, $11,011 thousand in 2024, and $11,182 thousand in 2023 .Corporate: $9,679 thousand in 2025, $13,829 thousand in 2024, and $18,099 thousand in 2023 .Other Operations: $0 in 2025, $3,212 thousand in 2024, and $3,853 thousand in 2023 .Total Capital Expenditures: $66,278 thousand in 2025, $72,403 thousand in 2024, and $78,109 thousand in 2023 .Cash FlowOperating ActivitiesNet Cash from Operating Activities: $383,257 thousand in 2025, up from $229,170 thousand in 2024 . The 2025 increase includes a $47 million improvement from discontinued operations and a $107 million improvement from continuing operations due to changes in working capital . In 2024, it improved $149 million compared to 2023, primarily due to a decline in finance receivables and lower payments of accounts payable and accrued liabilities, and benefited from lower cash outflows from discontinued operations .Investing ActivitiesNet Cash from Investing Activities: -$125,097 thousand in 2025, a decline of $76 million compared to -$49,056 thousand in 2024 . This was primarily due to higher investments in loan receivables ($52 million) and lower cash from investment activities ($53 million), partially offset by higher cash under the DIP Facility ($26 million) . In 2024, it improved $75 million compared to -$124,096 thousand in 2023, primarily due to higher cash from investment activities ($40 million), lower investments in loan receivables ($20 million), lower cash outflows from discontinued operations ($17 million), and lower capital expenditures ($6 million), partially offset by net DIP Facility funding ($17 million) .Financing ActivitiesNet Cash from Financing Activities: -$445,358 thousand in 2025, a decline of $140 million compared to -$305,455 thousand in 2024 . This was mainly due to common stock repurchases ($378 million), lower cash from customer account deposits at the Bank ($40 million), and higher dividend payments ($15 million), partially offset by higher cash from debt activity ($280 million) and prior year cash outflows related to discontinued operations ($7 million) . In 2024, it declined $275 million compared to -$30,002 thousand in 2023, primarily due to higher net debt repayments ($178 million) and lower cash from changes in customer account deposits at the Bank ($97 million) .Unique MetricsFinance Receivables and Allowance for Credit Losses (SendTech Solutions)Net Investment in Sales-type Lease Receivables: $720,925 thousand in 2025 (North America: $637,465 thousand, International: $83,460 thousand), compared to $801,026 thousand in 2024 (North America: $712,025 thousand, International: $89,001 thousand) .Net Investment in Loan Receivables: $380,650 thousand in 2025 (North America: $378,512 thousand, International: $2,138 thousand), compared to $344,898 thousand in 2024 (North America: $328,168 thousand, International: $16,730 thousand) .Total Allowance for Credit Losses on Finance Receivables: $18,576 thousand in 2025, compared to $21,676 thousand in 2024 . This represents 2% of total finance receivables at both December 31, 2025, and 2024 . A 0.25% increase in the allowance rate would reduce pre-tax income by $3 million .Write-offs of Gross Finance Receivables: $11,652 thousand in 2025 (Sales-type Lease Receivables: $5,477 thousand, Loan Receivables: $6,175 thousand) . $12,069 thousand in 2024 (Sales-type Lease Receivables: $5,120 thousand, Loan Receivables: $6,949 thousand) .Allowance for Credit Losses on Trade Accounts Receivables: 4% in 2025, down from 5% in 2024 . A 0.25% increase in the allowance rate would reduce pre-tax income by less than $1 million .Debt and Financing ActivitiesTotal Debt: Approximately $2 billion as of December 31, 2025 .Debt Maturities: $17 million due in 2026, $368 million in 2027, $134 million in 2028, $332 million in 2029, $236 million in 2030, and $939 million thereafter .Convertible Senior Notes: Pitney Bowes Inc. issued $230 million notes due August 2030, with a 1.50% interest rate and an initial conversion rate of 70.1533 shares per $1,000 principal amount (approx. $14.25 per share) . Net proceeds were $221 million, with $24.7 million used for Capped Call Transactions and $61.9 million for common stock repurchases .Term Loans: In 2025, Pitney Bowes Inc. entered into a new senior secured credit agreement providing a $265 million revolving credit facility (increased to $400 million in 2025) maturing March 2028, a $160 million term loan maturing March 2028, and a $615 million term loan maturing March 2032 .Debt Redemption/Refinancing: Pitney Bowes Inc. redeemed remaining outstanding balance of Notes due March 2028, incurring a loss of $17 million . An $8 million loss was recorded in connection with the refinance of term loans .Notes Repurchased: Pitney Bowes Inc. purchased $57 million of Notes due March 2027 and Notes due March 2029 in the open market . A tender offer for $80 million aggregate principal amount of Notes due January 2037 and Notes due March 2043 was completed, recording a $10 million gain .Variable Rate Debt: 37% of debt was at variable rates at December 31, 2025, with a weighted average interest rate of 7.1% (vs 8.3% in 2024) . A 100 basis point change in the weighted average interest rate would impact interest expense by approximately $7 million .Pension BenefitsEstimated 2026 Net Periodic Pension Costs: Expected to increase approximately $35 million over 2025 levels due to a lower expected rate of return on Plan assets following de-risking activities .Discount Rates (2026): U.S. Qualified Pension Plan: 5.34% (vs 5.65% in 2025); U.K. Qualified Pension Plan: 5.50% (vs 5.45% in 2025) .Other ObligationsLease Obligations: $153 million total, with $38 million due in 2026, $35 million in 2027, $30 million in 2028, $23 million in 2029, $15 million in 2030, and $12 million thereafter .Purchase Obligations: $95 million total, all due in 2026 .Retiree Medical Payments: $71 million total, with $9 million due in 2026, $9 million in 2027, $8 million in 2028, $8 million in 2029, $7 million in 2030, and $30 million thereafter .Outlook / GuidanceFor 2026, Pitney Bowes Inc. anticipates a low to mid-single digit decline in revenue, primarily due to the continued secular decline in mailing . The company expects a low single digit decline in EBIT and EBIT margin, driven by competitive pricing pressures in Presort Services, though this will be partially offset by lower worldwide operating costs from previous and ongoing cost-cutting actions . Earnings per share are projected to benefit from lower interest costs and share repurchases, which are expected to partially offset the impact of lower EBIT .