As I said in my opening remarks, as of September, we have $383 million of FY 2024 adjusted EBITDA. I said in a response to an earlier question that we’re on track with the cost reductions that we previously outlined. So if you do the math on that, those cost reductions, we said $75 million of benefit in FY 2024, roughly ratably over the first three quarters. So, there’s still $50 million to come a benefit that will come into the run rate over the next two quarters. And then we said that we have currency headwinds this year of about $20 million for the year. $3.5 million of that was in Q1. So there’s $16.5 million left to go there. So, if you just add all that up, you need to — we need to deliver just under $10 million of the EBITDA expansion over the remaining three quarters of the year from the flow-through of growth to get to at least $425 million.
That’s not KPIs. But basically, in order to be confident in our guidance, you need to believe that we can deliver just under $10 million of improvement outside of cost reductions that we announced in March and outside of currency impact, whether that be from growth, efficiency, so on. We remain confident. Obviously, that should — hopefully, that’s understood from the fact that we increased our guidance. But that’s the math that I would do to get comfortable.
Meredith Burns: Great. Thank you. So a couple of other questions here. One of which was pre-submitted and one of which came in live. Sean, can you walk us through the puts and takes of the FY 2024 guide, which calls for at least 8% year-over-year reported growth and 6% year-over-year FX-neutral growth and what is baked into the guide in terms of the macro? And another revenue question, I still don’t understand how you get to 6% constant currency revenue growth for the full year if 1Q was 4%, and you’re seeing Q2 was a tough comp. 2H, you’d have to have — there’s some math here. You have to have 16% constant currency comp in Q3 and 9% comp in Q4, what am I missing, raising EBITDA guidance by $5 million is great, but did 1Q outperform more than $5 million? Were there any pushouts of expenses from 1Q into the rest of the year?
Sean Quinn: Okay. A lot there. Let me try and cover all that. So, just in terms of puts and takes, the first question and influence the macro. I walk through that bridge to get to our EBITDA guidance just now. And then the cash flow guidance just flows from that because it’s — we’re talking about cash flow conversion off of that EBITDA. From a macro perspective, we don’t make specific predictions and frankly, we don’t have any better ability to forecast macro than people on this call. And so the way that I would think about it in terms of the puts and takes in the FY 2024 guide and also the macro. I think it’s helpful if you actually start from the bottom of the P&L and work your way upwards. And starting with OpEx after the cost reductions and the focusing of investment that we did last year.
We feel good about our OpEx levels. Those are well under control and will continue to be managed very closely. From an advertising spend perspective, there, we made some decisions around focus last year as well. We continue to experiment there. Those decisions are all within our control. So, we feel good about that. From a cost of goods sold perspective, as I mentioned in response to an earlier question as well, input cost environment is improving. We do expect to experience those improved levels for the remainder of the year. So we feel good about that as well. And then it comes down to revenue and that’s frankly where I’d say we attempt to be appropriately realistic about the environment that we’re in. But of course, there’s always macro risk to some extent.
In terms of all the math to get back to 6% constant currency growth. The question is referring to what we’ll be comping through the rest of the year. And yes, we do expect there to be some pressure on Vista growth from consumer. We’ve talked about that. There’s nothing new in the December quarter. But other than that, I’m not going to walk through quarter-by-quarter revenue guidance or by segment. But we feel comfortable that we can still get to that level. Keep in mind also that there are some of these timing impacts in Q1 as well. And more than half of that will flip into revenue over the rest of the year. So that helps. And then as we get to — towards the back end of the year, and it actually becomes an easier comp in parts of our business, and so that will influence growth rate in parts of our business as well.
So listen, I think overall, is there a risk? There always is because there’s always uncertainties from a macro perspective. But we’ve tried to be realistic about our expectations. Hopefully, the way that we’ve performed over recent quarters as we’ve given this guidance also kind of shows that that’s how we’re acting and we’re trying to be realistic. Things can change, but we’re going to try to be realistic, and we’ll keep everyone updated on how we’re doing against those expectations.
Meredith Burns: Thanks Sean. All right. A question on Vista profitability. With Vista, adjusted EBITDA margins coming in at 19% for the quarter. How should we think about the potential upside to your previously provided color at Investor Day, which calls for 16% to 18% margins in FY 2024?
Sean Quinn: Yes. The Q1 results position us well within the context of that range that we talked about. I think the one variable, just to keep in mind there is advertising spend as a percentage of revenue was at the low end of the range that we had provided in terms of annual spend. I think it was a little bit under 15%, 14.5% or so. And so that’s one variable just to take into account from a margin perspective. We do expect that will fluctuate quarter-to-quarter. But yes, I think the Q1 results position us well within the context of that range.
Meredith Burns: Thank you. All right. Question for you, Robert. What percentage of annual revenue or EBITDA is from business cards only, excluding stationery and everything else, just business cards. Not much of the market still thinks impress as things of Cimpress as the business card company. I know it’s been decreasing. And I hope that the asker knows that, that’s as a percentage of revenue. So, I believe it’s helpful to disclose that. It’s literally the first question I get when I bring up Cimpress.
Robert Keane: Okay. Well, thanks for the question. First of all, let me be very clear. Variable gross profit, gross profit and contribution profit after advertising of business cards are all up in absolute dollars versus FY 2018 before we started this whole transformation of Vista. They were all-time highs in fiscal 2023, and they were Q1 historical highs this quarter. And it’s very close to that from a revenue perspective. There’s some differences there. And I realize that the Investor Day, we gave a category that included stationary. But if you looked at just business cards, what I just said is true. So, business cards revenue and business, our gross profit continue to grow in absolute dollar amounts that’s true FY 2023 versus FY 2022, it’s true this past quarter versus the first quarter of FY 2023.
Now, the growth is in low single digits each year, and we think it’s going to continue like that. But we also recognize it’s a market which is declining overall, but we’re taking share. Now, for many years, we spent a lot of advertising reinforcing Vistaprint, not Cimpress is print as a discount business company. So that was a perception, and we have moved way with that over the last multiple years. And so we still get some of that perception in the universe of investors. But although we don’t disclose, in fact, we don’t even calculate EBITDA by product, which was a question, I think, we do calculate the gross profit numbers and variable contribution profit I just described. And now couple of more thoughts on this. inside Cimpress, obviously, Visa has the most significant revenue gross profit from business cards.
But we do see them — they’re about 25% plus or minus of revenue base, as I mentioned, other than during the pandemic, which they did fall, but they have consistently grown. Why are they growing? I think one, people are using them in new — our customers are using them in new use cases. QR codes are becoming very popular, which it’s a very easy way to get someone to your website or your digital presence. We have greatly increased the quality and the depth and breadth of our business card offering in terms of all the variations. And we’re finding that customers are buying much smaller volumes of business cards, but at much higher end products, which is leading to both order and value growth. And because we’re selling it at higher price points and higher gross profits than our traditional lead products, if you think of a very traditional Vistaprint approach 5, 10 years ago, it was 250 or 500 basic business cards with constant deep discounting often a $10 or $9.99 business cards for 50% off.
