CPI Card Group, Inc. (NASDAQ: PMTS) reported Q4 EPS of ($0.19), $0.08 better than the analyst estimate of ($0.27). Revenue for the quarter came in at $72.6 million versus the consensus estimate of $69.38 million.

“Fourth quarter results were strong, rounding out another year of crisp execution of our customer-centric strategy,” said Scott Scheirman, President and Chief Executive Officer of CPI. “We believe we gained market share across all of our business units during 2019 by leveraging our robust products and solutions. We delivered our eighth consecutive quarter of year-over-year net sales growth, highlighted by a 24% increase in net sales from our U.S. Debit and Credit segment driven by increased demand for our dual interface EMV® products, including our Second Wave™ card featuring a core made with recovered ocean-bound plastic. We generated strong top-line results and continued to leverage our business model, which delivered significantly improved bottom-line performance.”

Scheirman continued, “We believe we are well-positioned to capitalize on market opportunities, including continued strong growth of dual interface card conversions in the U.S. and strong market demand for innovative and differentiated products, such as our Second Wave™ card and Card@Once® instant issuance solution. We remain committed to our customer-centric strategy by continuing to deliver innovative and diversified products and solutions.”

2020 Strategy and Market Outlook

The Company’s vision is to be the partner of choice by providing market-leading quality products and customer service with a market-competitive business model. The Company will continue to execute on its four key strategies:

Deep customer focus,
Market-leading quality products and customer service,
Continuous innovation, and
Market-competitive business model.

The Company believes it is well-positioned to meet customer and market demands through its strong portfolio of differentiated products and solutions. In addition, due to the operating leverage in the Company’s business model, the Company believes it can drive incremental profitability as the top line grows.

Our expectations for the U.S. market in 2020 with respect to the Company’s portfolio of products and solutions are:

U.S. Debit and Credit Segment

Secure Card

The Company expects steady card manufacturing volume growth. In addition, the Company expects the migration to dual interface cards will continue its strong growth and will become a larger part of the overall card market. With over 20 years of card manufacturing experience and a growing portfolio of innovative and highly differentiated products within its Secure Card business, the Company believes it is well-positioned to continue to win in the market, inclusive of the market conversion to dual interface and contactless cards. In addition, with Second Wave™ payment cards, featuring a core made with recovered ocean-bound plastic, the Company offers a solution to support the sustainability initiatives of its customers, which bolsters the Company’s position in the marketplace.

Card@Once®

The Company expects strong growth in the number of small and medium sized financial institution locations offering instant issuance, the Company’s primary market for Card@Once® today. With nearly 11,000 printers in the field across over 1,600 financial institutions, the Company’s Card@Once® instant issuance offering is the leading Software-as-a-Service solution in the market. The Company believes it will continue to win new business and expand its addressable market.

Personalization

The Company expects low but steady market volume growth in the small and medium sized financial institution personalization market, driven by continued reissuances and the broader dual interface market conversion. The Company has invested in broadening its product and solution capabilities, including CPI On-Demand™. The Company believes its enhanced capabilities and high level of customer service will enable it to win incremental business from its current customers and expand its customer base.

U.S. Prepaid Segment

The Company expects the open loop prepaid card market to be directionally flat. With its market-leading quality and innovative solutions, including the use of differentiated card materials and secure and sustainable packaging capabilities, the Company believes it will continue to win in the space.

For earnings history and earnings-related data on CPI Card Group, Inc. (PMTS) click here.