Pitney Bowes — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for Q3 2026 was $456 million, a 1% decrease from $460 million in Q3 2025.
• GAAP EPS was $0.37, up 23% from $0.30 in the prior year period.
• Adjusted EPS was $0.42, representing a 35% increase from $0.31 in Q3 2025.
• GAAP Net Income was $53 million, a 1% increase from $52 million in Q3 2025.
• Adjusted EBIT was $114 million, up 6% from $107 million in Q3 2025.
• Cash from Operations was $151 million, a 126% increase from $67 million in Q3 2025.
• Adjusted Free Cash Flow was $147 million, a 144% increase from $60 million in Q3 2025.
• Year-to-date revenue was $1,385 million, down 2% from $1,415 million in the prior year.
• Year-to-date Adjusted Free Cash Flow was $339 million, up 131% from $146 million in the prior year.
• Gross profit remained flat year-over-year despite lower revenue, supported by favorable product mix and lower tariff costs.
• Operating expenses in the SendTech Solutions segment declined $13 million versus the prior year.

Guidance and Future Outlook:

• The Company raised the low end of its full-year 2026 Revenue guidance to $1,830 million (previously $1,800 million) and narrowed the range to $1,830–$1,860 million.
• Full-year 2026 Adjusted EBIT guidance was narrowed to $450–$470 million (previously $445–$475 million), maintaining the midpoint.
• Full-year 2026 Adjusted EPS guidance was narrowed to $1.58–$1.67 (previously $1.55–$1.70), maintaining the midpoint.
• Full-year 2026 Adjusted Free Cash Flow guidance was raised to $380–$420 million (previously $360–$410 million).
• Year-to-date Adjusted Free Cash Flow reflects benefits from increased prepayments due to new customers resulting from the exit of a significant mail sortation competitor.

Business Segments and Product Lines:

• SendTech Solutions: Revenue was $305 million, down 2% from $311 million in Q3 2025. Adjusted Segment EBITDA was $124 million (up 11%) and Adjusted Segment EBIT was $115 million (up 14%). The decline was due to anticipated decreases in the mailing install base, partially offset by higher equipment sales. Results benefited from a $3 million non-recurring benefit allocation from Corporate expenses.
• Presort Services: Revenue was $151 million, up 1% from $149 million in Q3 2025. Adjusted Segment EBITDA was $41 million (down 2%) and Adjusted Segment EBIT was $32 million (down 2%). Growth was driven by increased volume from new client wins, with total volume sorted reaching 3.4 billion pieces (up 4% year-over-year). Declines in profitability were due to lower revenue per piece and $6 million higher transportation costs driven by fuel prices and freight inflation. Results benefited from a $7 million non-recurring benefit allocation from Corporate expenses.

Market and Competitive Landscape:

• The Company noted the exit of a significant mail sortation competitor, which contributed to new customer wins and increased prepayments.
• The Company serves more than 90 percent of the Fortune 500, along with small businesses, large enterprises, and government entities.

Risks and Challenges:

• Potential risks include changes in postal regulations, operations, or financial health of posts in the U.S. or other major markets.
• Risks include accelerated or sudden declines in physical mail volumes or shipping volumes, and loss of larger clients.
• Economic factors such as inflation, rising prices, higher interest rates, global recession, or prolonged U.S. government shutdowns could impact performance.
• Labor and transportation availability and costs, including fuel prices and freight cost inflation, present challenges.
• Changes in trade policies, tariffs, and regulations are cited as potential risks.

Management Commentary and Tone:

• CEO Kurt Wolf released a letter highlighting continued progress toward stabilizing revenue and growth in Adjusted EBIT, Adjusted EPS, and Adjusted Free Cash Flow.
• Management expressed confidence in the quarter's performance, citing strong results that led to the upward revision of full-year guidance.
• The tone indicates a focus on cost reductions, efficiency improvements, and capital allocation discipline.

Other Key Points:

• Debt was reduced by $148 million in the quarter, including $46 million through a tender offer of notes due in 2037 and 2043 at a discount to par. Year-to-date debt reduction totaled $108 million.
• The Company repriced its $585 million Term Loan B (due 2032), reducing the interest margin by 75 basis points.
• The Company repurchased approximately 1.0 million shares for $17 million in Q3 2026 at an average price of $16.84, and an additional 0.6 million shares for $11 million in the fourth quarter through October 23, 2026.
• The Board approved a $0.10 per share quarterly regular dividend, payable on December 8, 2026, to shareholders of record as of November 16, 2026.
• Effective Q2 2026, the Company renamed "Free Cash Flow" to "Adjusted Free Cash Flow" with no change in definition or calculation methodology.
• Effective January 1, 2026, Adjusted Segment EBIT excludes pension expense related to U.S. and Canada pension plans the Company has taken steps to terminate.
• Non-recurring benefits totaling $10 million ($3 million for SendTech, $7 million for Presort) were recognized in the quarter due to better-than-anticipated medical claims.