Deluxe Corporation's Revenue Declines in Q3 2023
Segments of revenue
Deluxe Corporation reported total revenue of $537.8 million in the third quarter of 2023, a decrease of 3.1% compared to the same quarter last year. The company's product revenue was $304.8 million, down 3.9% from the previous year, while service revenue decreased by 2.0% to $233.0 million.
Despite the decline in revenue, Deluxe Corporation's management highlighted the impact of price increases in response to the current inflationary environment, which partially offset the revenue decreases. Additionally, the company reported an increase in merchant services revenue, driven by strong merchant activations and volume.
The primary challenges faced by Deluxe Corporation in the latest quarter were the continuing secular decline in business forms and some accessories, as well as demand softness in their distributor network. These factors contributed to the decline in total revenue.
It is worth noting that the company's business exits resulted in a revenue decline of approximately $2 million in the third quarter of 2023. Furthermore, the slight decrease in treasury management revenue was primarily driven by softness in lockbox processing volumes and the impact of one-time volume increases in the third quarter of 2022 resulting from an extended outage experienced by a competitor.
Deluxe Corporation experienced a decline in revenue in the third quarter of 2023, primarily driven by the secular decline in certain business segments and demand softness in their distributor network. However, the company managed to partially offset the revenue decreases through price increases and reported an increase in merchant services revenue. The challenges faced by Deluxe Corporation highlight the need for continued adaptation to changing market dynamics.