Cimpress : Q2 2021 Quarterly Earnings Document

TABLE OF CONTENTS

	Page
IMPORTANT NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
LETTER FROM CEO ROBERT KEANE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
SUMMARY CONSOLIDATED RESULTS: 3-YEARTREND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
SUMMARY CONSOLIDATED RESULTS: QUARTERLY TREND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
INCOME STATEMENT HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
CASH FLOW AND RETURN ON INVESTED CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
DEBT AND SHARE REPURCHASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
SEGMENT RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
VISTAPRINT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
UPLOAD AND PRINT: PRINTBROTHERS AND THE PRINT GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
NATIONAL PEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
ALL OTHER BUSINESSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
CENTRAL AND CORPORATE COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
CURRENCY IMPACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
CURRENT OUTLOOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21
BALANCE SHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22
INCOME STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23
CASH FLOW STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24
ABOUT NON-GAAPMEASURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
NON-GAAPRECONCILIATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
ABOUT CIMPRESS, SAFE HARBOR STATEMENT AND CONTACT INFORMATION . . . . . . . . . . . . . . . . . . . . . . .	36

Page 2 of 36

CIMPRESS' UPPERMOST FINANCIAL OBJECTIVE

Our uppermost financial objective is to maximize our intrinsic value per share ("IVPS"). We define IVPS as (a) the unlevered free cash flow per diluted share that, in our best judgment, will occur between now and the long-term future, appropriately discounted to reflect our cost of capital, minus (b) net debt per diluted share. We define unlevered free cash flow as adjusted free cash flow plus cash interest expense related to borrowing.

We endeavor to make all financial decisions in service of this priority. As such, we often make decisions that could be considered non-optimal were they to be evaluated based on other criteria such as (but not limited to) near- and mid-term revenue, operating income, net income, EPS, adjusted EBITDA, and cash flow.

IVPS is inherently long term in nature. Thus an explicit outcome of this is that we accept fluctuations in our financial metrics as we make investments that we believe will deliver attractive long-term returns on investment.

OUR STRATEGY

Cimpress invests in and builds customer-focused, entrepreneurial, mass customization businesses for the long term, which we manage in a decentralized, autonomous manner.

We drive competitive advantage across Cimpress through a select few shared strategic capabilities that have the greatest potential to create company-wide value.

We limit all other central activities to only those which absolutely must be performed centrally.

OUR CAPITAL ALLOCATION PHILOSOPHY

Cimpress has historically deployed capital via organic investments, share repurchases, acquisitions and equity investments, and debt reduction. We have not paid a dividend and we do not intend to for the foreseeable future. We consider capital to be fungible across all of these categories; we do not favor one over the other, but rather seek to grow our IVPS by allocating capital across these categories in function of the relative returns of current and expected future opportunities.

We delegate to our businesses and central teams capital allocation decisions that our operational executives expect to pay back in less than twelve months. For capital allocation with pay back beyond that time frame, we evaluate the relative returns of potential uses of capital. Most of the executives that lead our businesses are incentivized based on the long-term returns on invested capital generated in their business. The remainder are primarily incentivized though performance share units that are based on the long-term growth of the Cimpress share price beyond a hurdle rate.

We seek to deliver a weighted average return on our portfolio of deployed capital, net of failures, that is materially above our weighted average cost of capital (WACC), which we estimate to be 8.5%. In support of this objective, we vary the hurdle rates that we use at the time of investment decisions in function of our judgment of the risks to various types of investment. For example, we require only 10% for highly predictable organic investments in established markets, 15% for M&A of established, growing, profitable companies, and 25% for risky investments such as our investments in startup businesses or emerging markets.

We recognize that a portfolio of investments that exceeds our WACC does not necessarily mean, by itself, that we have made good capital allocation decisions. We compare our returns against the opportunity cost of potentially higher returns that might have come from deploying the same capital into even higher-returning opportunities of a similar risk level. This more stringent measure of performance clarifies the cost of mistakes, which we have made in the past.

Page 3 of 36

LETTER FROM ROBERT

Dear Investor,

COVID-19 raged for ten of the twelve months in calendar 2020, creating chaos for the small and medium businesses who account for most of our revenues. This adversely impacted Cimpress but we did not stand still. We made significant cost reductions in March and April, many of them permanent. We continued our implementation of the broad series of actions to drive focus and operational execution as I first described publicly in my quarterly letter on January 30, 2019. And we maintained or accelerated our significant investments in technology, data and analytics, talent, customer experience, new product introductions, quality, customer service technology upgrades and brand.

At the same time, we demonstrated our financial resilience for the owners of our approximately 26 million shares outstanding as of the end of December.

• Calendar year 2020 operating income was $39 million and operating cash flow was $330 million. Adjusted EBITDA was $367 million and adjusted free cash flow was $243 million.
• Year to date in FY 2021, we have repaid $171 million of debt. Our net debt of $1,278 million as of December 31, 2020 is lower than it was prior to the pandemic, with a total leverage ratio as calculated per our debt covenants of 3.53.
• When comparing year-to-date FY 2021 to the same six-month period two years ago (the period just before we began to implement the series of actions mentioned above), operating income improved 54%, adjusted EBITDA 28%, operating cash flow 25%, and adjusted free cash flow 47%.

Although our revenue is down because of the pandemic we believe that our traditional competitors, who still constitute the majority of the market, have experienced a greater revenue drop as many customers migrate from offline to online where Cimpress is the clear leader. We believe most of these customers will stay online post- pandemic, which would mean that we have been taking market share. Furthermore, we are expanding Vistaprint's total addressable market via the acquisition of 99designs, a global marketplace that connects freelance graphic designers and businesses. 99designs' revenue has grown year over year during the pandemic.

In summary, during difficult pandemic circumstances Cimpress has reduced costs, continued pre-COVID plans to focus on execution and invest to improve customer value and competitive capabilities, demonstrated our underlying cash generation capability, gained market share and entered the very large adjacent market for design services via a freelance marketplace.

These factors bode well for Cimpress in post-pandemic times. Of course, for now COVID-19 still rages and our revenue may get worse before it gets better. But the pandemic will eventually end. In the meantime we will keep driving efficiencies, continue investing to serve customers better, and remain steadfast on our multi-decade journey of value-creating growth for all our stakeholders.

We will host our typical mid-year strategy update call on February 24, 2021, in which we will share more detailed examples of the exciting work going on across Cimpress, and answer investors' questions. If you have questions you'd like us to address on that call, please email them to [e-mail] before February 17, 2021.

Sincerely,

Robert S. Keane

Founder, Chairman & CEO

Please see non-GAAP reconciliations at the end of this document.

Page 4 of 36

SUMMARY CONSOLIDATED RESULTS: THREE-YEAR TREND

$ in thousands, except percentages

REVENUE BY REPORTABLE SEGMENT, TOTAL REVENUE AND INCOME FROM OPERATIONS:

		Q2 FY2019	Q2 FY2020	Q2 FY2021		YTD FY19		YTD FY20		YTD FY21
Vistaprint		$	443,940	$	433,305	$	436,317	$	789,260	$	776,476	$	765,608
PrintBrothers			116,314		126,617		121,806		217,703		235,907		221,918
The Print Group			87,740		87,699		76,204		158,740		159,957		142,641
National Pen			132,951		127,985		114,692		198,922		198,148		182,341
All Other Businesses			48,256		49,774		55,365		55,971		92,050		98,843
Inter-segment eliminations			(3,634)		(5,047)		(18,239)		(6,048)		(8,246)		(38,706)
Total revenue		$	825,567	$	820,333	$	786,145	$	1,414,548	$	1,454,292	$	1,372,645
Reported revenue growth			8 %		(1)%		(4)%		7 %		3 %		(6)%
Organic constant currency revenue growth			6 %		- %		(9)%		7 %		2 %		(10)%
Income from operations		$	90,615	$	121,595	$	94,194	$	84,627	$	146,974	$	130,180
Income from operations margin			11 %		15 %		12 %		6 %		10 %		9 %

EBITDA (LOSS) BY REPORTABLE SEGMENT ("SEGMENT EBITDA") AND ADJUSTED EBITDA:

		Q2 FY2019	Q2 FY2020	Q2 FY2021		YTD FY19		YTD FY20		YTD FY21
Vistaprint		$	102,510	$	138,857	$	112,331	$	168,051	$	226,161	$	202,488
PrintBrothers			11,691		16,459		16,457		22,262		27,236		26,172
The Print Group			16,368		18,105		12,569		28,214		31,739		24,752
National Pen			26,634		28,099		18,728		10,166		18,249		8,057
All Other Businesses			(2,294)		3,668		10,657		(7,016)		5,385		19,266
Total segment EBITDA		$	154,909	$	205,188	$	170,742	$	221,677	$	308,770	$	280,735
Central and corporate costs			(29,810)		(35,631)		(30,490)		(60,577)		(69,783)		(60,360)
Unallocated share-based compensation			11,138		(2,774)		(494)		7,070		(2,275)		(1,644)
Exclude:1share-based compensation			(5,612)		8,325		5,243		3,305		13,075		13,526
expense
Include: Realized gains (losses) on certain			7,446		10,408		(1,578)		9,053		15,246		(361)
currency derivatives not included in
segment EBITDA
Adjusted EBITDA		$	138,071	$	185,517	$	143,423	$	180,528	$	265,033	$	231,896
Adjusted EBITDA margin			17 %		23 %		18 %		13 %		18 %		17 %
Adjusted EBITDA year-over-year growth			3 %		34 %		(23)%		- %		47 %		(13)%

1SBC expense listed above excludes the portion included in restructuring-related charges to avoid double counting.

CASH FLOW AND OTHER METRICS:

		Q2 FY2019	Q2 FY2020	Q2 FY2021	YTD FY19		YTD FY20		YTD FY21
Net cash provided by operating activities		$ 183,270	$ 202,192	$ 150,487	$ 205,490	$	265,097	$	256,168
Net cash used in investing activities		(299,940)	(24,453)	(55,593)	(349,508)		(53,816)		(76,677)
Net cash provided by (used in) financing		118,218	(174,385)	(99,775)	149,861		(207,390)		(191,754)
activities
Adjusted free cash flow		154,841	177,345	130,439	144,780		213,586		212,933
Cash interest related to borrowing		20,423	23,929	49,221	26,123		33,313		58,299

Please see non-GAAP reconciliations at the end of this document.

Page 5 of 36

SUMMARY CONSOLIDATED RESULTS: THREE-YEAR TREND (CONTINUED)

$ in thousands, except where noted

COMPONENTS OF ADJUSTED FREE CASH FLOW:

Adjusted EBITDA

Cash restructuring payments

Cash taxes

Other changes in net working capital and other reconciling items

Purchases of property, plant and equipment

Purchases of intangible assets not related to acquisitions

Capitalization of software and website development costs

Adjusted free cash flow before cash interest related to borrowing

Cash interest related to borrowing

Adjusted free cash flow

Q2 FY2019	Q2 FY2020	Q2 FY2021		YTD FY19		YTD FY20		YTD FY21
$	138,071	$	185,517	$	143,423	$	180,528	$	265,033	$	231,896
	(425)		(494)		(1,446)		(1,656)		(2,756)		(3,961)
	(5,512)		(711)		(4,639)		(10,961)		(5,183)		(4,991)
	71,559		41,809		62,370		63,702		41,316		91,523
	(17,741)		(13,901)		(8,407)		(38,767)		(28,094)		(16,790)
	-		-		-		(22)		-		-
	(10,688)		(10,946)		(11,641)		(21,921)		(23,417)		(26,445)
$	175,264	$	201,274	$	179,660	$	170,903	$	246,899	$	271,232
	(20,423)		(23,929)		(49,221)		(26,123)		(33,313)		(58,299)
$	154,841	$	177,345	$	130,439	$	144,780	$	213,586	$	212,933

Q2 FY2021 COMPONENTS OF ADJUSTED FREE CASH FLOW ($M)

		$62.4	$179.7
$143.4		($8.4)	($11.6)
		$130.4
($1.4)
($4.6)		($49.2)

Adjusted	Restructuring	Cash taxes	Other NWC	Capital	Capitalization	Adjusted FCF	Cash interest	Adjusted FCF
EBITDA	payments		changes &	expenditures	of software	before interest	related to
			other items			related to	borrowing
						borrowing

YTD FY2021 COMPONENTS OF ADJUSTED FREE CASH FLOW ($M)

		$91.5
		$(16.8)	$271.2
$231.9
	($26.4)	$212.9
($4.0)	($5.0)		($58.3)

Adjusted	Restructuring	Cash taxes	Other NWC	Capital	Capitalization	Adjusted FCF	Cash interest	Adjusted FCF
EBITDA	payments		changes &	expenditures	of software	before interest	related to
			other items			related to	borrowing
						borrowing

Please see non-GAAP reconciliations at the end of this document.

Page 6 of 36

SUMMARY CONSOLIDATED RESULTS: QUARTERLY TREND

$ in millions, except percentages and share data

Revenue &	Organic Constant-Currency Revenue
Reported Revenue Growth (Decline) (1)	Growth (Decline)

	$826							$820							$786
			$662	$675	$634
									$598			$587
													$429
	8%			7%	8%										6%		5%	4%
			4%															3%
																				-%
									(1)%
															(4)%
															(7)%								(9)%			(9)%
											(10)%											(10)%
													(36)%												(36)%
Q2	FY19	Q3	FY19	Q4	FY19	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21	Q2FY19	Q3FY19	Q4FY19	Q1FY20	Q2FY20	Q3FY20	Q4FY20	Q1FY21	Q2FY21

1. Reported revenue growth rates are impacted by the timing of acquisitions and divestitures.

Cash Flow from Operations

$202

$183

$150

$109

$106

$63

$54

$17

$19

Q2

FY19

Q3

FY19

Q4

FY19

Q1

FY20

Q2

FY20

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

1. Cash interest related to borrowing is total cash interest less interest expense for Waltham, MA lease.

Adjusted Free Cash Flow &

Cash Interest Related to Borrowing (2)

Adj. FCF

Interest

Q2

FY19

Q3

FY19

Q4

FY19

Q1

FY20

Q2

FY20

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

Q219

Q319

Q419

Q120

Q220

Q320

Q420

Q121

Q221

Adj. FCF

$155

($15)

$82

$36

$177

($4)

$34

$82

$130

Interest (2)

$20

$8

$22

$9

$24

$9

$30

$9

$49

Please see non-GAAP reconciliations at the end of this document.

Page 7 of 36

SUMMARY CONSOLIDATED RESULTS: QUARTERLY TREND (CONTINUED)

$ in millions, except percentages and share data

GAAP Operating Income (Loss)

& Adjusted EBITDA

					GAAP OI (Loss)				Adjusted EBITDA
									$186
	$138															$143
						$117		$122
	$91			$89			$80							$88	$94
										$71
												$64
					$49									$36
			$30			$25
													$(3)
											$(88)
Q2	FY19	Q3	FY19	Q4	FY19	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21

Net Income (Loss) Attributable to

Cimpress

$190

$69

$34

$20

$32

$7

$(11)

$(42)

$(85)

Q2

FY19

Q3

FY19

Q4

FY19

Q1

FY20

Q2

FY20

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

	Net Debt (1)	Weighted Average Shares Outstanding
	Cash / cash equivalents			(Millions) (2)
	High yield notes			Basic		Diluted
	2nd lien notes

Term loan

Revolver

Other debt

													$228										31.8	31.5	31.3	30.5
	$48	$44	$35		$31		$37		$45		$40		$37
																	27.9
	($400)	($400)	($400)	($400)	($400)											30.9	30.8											26.4
			($600)	($600)	$(600)		30.6	29.7			26.0	25.9	25.9
													($600)
	($274)																														27.0	26.0	25.9	25.9	26.0
	($516)	($505)	($491)	($478)
	($376)											($452)	($300)	($300)	$(300)
			($116)									($148)	($146)	$(144)
	($10)	($156)	($331)
	($16)	($14)		($488)
	($1,012) ($1,044) ($1,000)	($17)							($344)	$(260)
							($422)
								($1,208)	($15)	($612)				$(11)
											($11)
								($12)			($1,278)
											($1,344)				($1,361)
													($14)		($1,437)
													($1,450)
Q2	FY19	Q3	FY19	Q4	FY19	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21	Q2	FY19	Q3	FY19	Q4	FY19	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21

1. Excludes debt issuance costs, debt premiums and discounts.
2. Basic and diluted shares are the same in certain periods where we reported a GAAP net loss.

Please see non-GAAP reconciliations at the end of this document.

Page 8 of 36

INCOME STATEMENT HIGHLIGHTS

Our reported revenue and organic constant-currency revenue declined 4% and 9%, respectively, in Q2. The pandemic continues to negatively impact revenue results, but the year-over-year decline in organic constant-currency revenue was slightly better than Q1 FY2021. Below is a view of our revenue results by segment for Q2 FY2021:

	Q2 revenue change FY21 versus FY20
Segment:	Reported	Organic
Constant-Currency
Vistaprint	1%	(6)%
Combined Upload and Print	(8)%	(14)%
National Pen	(10)%	(13)%
All Other Businesses	11%	14%
Total	(4)%	(9)%

These results vary by segment as each business has a different mix of products and customers with unique pandemic impact. Revenue from event-driven and some small business products continued to decline, partially offset by revenue from new products introduced in reaction to the pandemic such as face masks (about 5% of total Q2 revenue), and consumer products in Vistaprint and BuildASign that in total grew 6% year over year in Q2 excluding invitations & announcements, which is an event- driven category.

Q2 FY2021 GAAP operating income decreased $27.4 million year over year to $94.2 million. The negative impact of the pandemic was partly offset by variable cost controls, fixed cost savings and lower share-based compensation expense, but the gross margin profile of our revenue mix was unfavorable compared to last year particularly in Vistaprint, and we increased organic investment including advertising spend. Additionally, gross margin was negatively impacted by approximately $4.5 million of expense for some pandemic-related products, most notably disposable masks in National Pen, for which pricing and demand have dropped. Operating income benefited from about $4.0 million of COVID-19-related government incentives, primarily to offset wages for manufacturing and customer service team members in countries where demand decreased but roles were maintained.

Adjusted EBITDA for Q2 FY2021 was $143.4 million, down 23% from Q2 FY2020 for many of the same reasons as the decrease in operating income. Note that share- based compensation, restructuring charges and depreciation and amortization are excluded from our adjusted EBITDA calculation. Another difference between operating income and adjusted EBITDA is the inclusion of realized gains or losses on currency derivatives intended to hedge EBITDA, the details of which can be found on page

20. Year over year, the net impact of currency negatively impacted adjusted EBITDA by about $4.0 million in Q2.

(continued on next page)

2-Year Stacked Reported Revenue

Growth

		Earlier period		Later period

40%
8%	20%	19%	13%	7%			1%
32%	4%	7%
8%		7%	(1)%
	16%	12%	8%	4%	8%
			5%	(1)%	(10)%		(7)%	(4)%
				(36)%		(5)%
					(6)%
						(29)%

Q2'18+	Q2'19	Q3'19	Q4'19	Q1'20	Q2'20	Q3'20	Q4'20	Q1'21	Q2'21
Q3'18+	Q4'18+	Q1'19+	Q2'19+	Q3'19+	Q4'19+	Q1'20+	Q2'20+

2-Year Stacked Organic Constant-

Currency

Revenue Growth

			Earlier period		Later period
	17%	14%	16%	12%	6%
	6%	3%	5%	4%	3%			-%
	6%	5%	4%
	11%	11%	11%	8%	-%	(9)%	(9)%
							(10)%
						(6)%	(36)%	(6)%	(9)%
							(31)%
Q2'18+	Q2'19	Q3'19	Q4'19	Q1'20	Q2'20	Q3'20	Q4'20	Q1'21	Q2'21
Q3'18+	Q4'18+	Q1'19+	Q2'19+	Q3'19+	Q4'19+	Q1'20+	Q2'20+
		GAAP Operating Income (Loss) ($M)
			& Margin (%) (Quarterly)

									$122
	$91															$94
			$30	$49	$25							$36
					15%			$(3)
	11%			7%							12%
	5%									6%
			4%					(1)%
											(15)%
											$(88)
Q2	FY19	Q3	FY19	Q4	FY19	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21

Adjusted EBITDA ($M) & Margin (%)

(Quarterly)

									$186
	$138			$117											$143
			$89									$88
					$80	23%	$71	$64
													18%
	17%	13%	17%	13%					15%	15%
							12%
Q2	FY19	Q3	FY19	Q4	FY19	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21

Please see non-GAAP reconciliations at the end of this document.

Page 9 of 36

INCOME STATEMENT HIGHLIGHTS (CONTINUED)

GAAP net income per diluted share for the second quarter was $1.22, versus $6.81 in the same quarter a year ago. In addition to the operating income decline, the most material driver of this decline was a $114.1 million income tax benefit recorded in the year-ago period as a result of Swiss tax reform. We also had increased interest expense, as well as the recognition of non-operational,non-cashyear-over-year currency losses in other income (expense), net (details on page 20).

Gross profit (revenue minus the cost of revenue) decreased year over year by $26.1 million in the second quarter, due to the pandemic-induced revenue decrease and product mix shifts and the $4.5 million of pandemic- related product expense described above, partially offset by cost reductions and approximately $2.5 million of government wage incentives recognized during the quarter in cost of revenue. Currency had a positive impact on gross profit for the quarter.

Gross margin (revenue minus the cost of revenue expressed as a percent of revenue) in the second quarter was 50.9%, down compared to the same quarter a year ago, with the most significant impact being product mix.

Contribution profit (revenue minus the cost of revenue, advertising and payment processing) decreased year over year by $30.4 million in the second quarter. In addition to the decrease in gross profit mentioned above, we also increased advertising spend slightly year over year including investment in upper funnel spend in Vistaprint. Payment processing fees decreased in line with revenue. Currency movements benefited contribution profit year over year.

Contribution margin (revenue minus the cost of revenue, the cost of advertising and payment processing, expressed as a percent of revenue) in the second quarter was 36.4%, down from 38.6% in the same quarter a year ago.

Advertising as a percent of revenue increased year over year for the second quarter from 11.8% to 12.7%, for the same reasons described above.

GAAP Operating Income & Adj. EBITDA

($M) (TTM)

TTM OI TTM Adj EBITDA

				$471	$453
			$424
				$400	$409
		$387
				$367
	$347
$327
			$195	$226
		$164
	$136
$123				$109
					$56	$67
					$39

Q2

FY19

Q3

FY19

Q4

FY19

Q1

FY20

Q2

FY20

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

Gross Profit ($M) & Gross Margin (%)

										Gross Profit					Gross Margin %
	$414										$426								$400
				$319	$330	$308
								$288			$288
																		$210
	50.2%	48.2%	48.9%	48.6%	52.0%	48.2%	48.8%	49.0%	50.9%
Q2	FY19	Q3	FY19	Q4	FY19	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21
					Contribution Profit ($M) & Contribution
												Margin (%)
									Contribution Profit				Contribution Margin %
													$317
	$266																			$286
									$239
				$210			$205			$201			$208
																		$166
									35.4%			38.6%	33.7%	38.6%	35.5%	36.4%
	32.3%	31.8%	32.3%

Q2

FY19

Q3

FY19

Q4

FY19

Q1

FY20

Q2

FY20

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

Please see non-GAAP reconciliations at the end of this document.

Page 10 of 36

CASH FLOW & RETURN ON INVESTED CAPITAL

We generated $150.5 million of cash from operations in Q2 FY2021, compared with $202.2 million in the year-ago period, largely driven by the $42.1 million decrease in adjusted EBITDA described on page 9. Additionally, cash interest was higher year-over-year by $25.3 million as a result of the February 2020 add on to our senior unsecured notes and the debt servicing from our May 2020 second lien notes. Cash taxes were higher by $4.0 million year over year. The year-over-year decrease in cash from operations was partially offset by more favorable inflows from working capital.

Adjusted free cash flow was $130.4 million in the second quarter of FY2021 compared to $177.3 million in the same period a year ago. Adjusted free cash flow decreased as a result of similar factors as our operating cash flow. In Q2 FY2021 an increase in capitalized software spend was more than offset by lower spend in capital expenditures which resulted in a combined year-over-year contribution to free cash flow of $4.8 million.

Internally, our most important annual performance metric is unlevered free cash flow, which we define as adjusted free cash flow plus cash interest expense related to borrowing. The top two charts at the right illustrate these components on a quarterly and trailing-twelve-month basis.

The GAAP operating measures that we use as a basis to calculate adjusted return on invested capital (adjusted ROIC) are total debt, total shareholders' equity, and operating income. Debt decreased compared to the year- ago period. Excess cash is excluded from our calculation of invested capital. On a trailing-twelve-month basis, adjusted ROIC as of December 31, 2020 declined compared to the prior year and sequentially due to the year-over-year decline in TTM profits. Excluding share-based compensation, adjusted ROIC also decreased both year over year and sequentially.

Adjusted Free Cash Flow &

Cash Interest Related to Borrowing

($M)

(Quarterly)

FCF

Interest

Q2

FY19

Q3

FY19

Q4

FY19

Q1

FY20

Q2

FY20

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

	Q219	Q319	Q419	Q120	Q220	Q320	Q420	Q121	Q221
Adj. FCF	$155	($15)	$82	$36	$177	($4)	$34	$82	$130
Interest	$20	$8	$22	$9	$24	$9	$30	$9	$49

Adjusted Free Cash Flow &

Cash Interest Related to Borrowing ($M)

(TTM)

								FCF			Interest
									$64	$65			$73
							$60							$98
											$73
					$57
	$53	$55
							$258	$281	$292	$244	$290	$243
					$212
	$165	$153
Q2	FY19	Q3	FY19	Q4	FY19	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21

Adjusted Return on Invested Capital

(TTM)

	Adjusted ROIC		Adjusted ROIC ex SBC
		27%	26%		25%
	23%
			22%	22%
	21%
17%	18%	25%	23%
22%			21%
			20%
	19%			19%
14%	16%

Q2

FY19

Q3

FY19

Q4

FY19

Q1

FY20

Q2

FY20

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

Please see non-GAAP reconciliations at the end of this document.

Page 11 of 36

CASH FLOW & ROIC (CONTINUED)

Cash Flow from Operations ($M)

(Quarterly)

$202

$183

$150

$109

$106

$63

$54

$17

$19

Q2

FY19

Q3

FY19

Q4

FY19

Q1

FY20

Q2

FY20

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

Cash Flow from Operations ($M)

(TTM)

$372	$391	$393		$381
		$338
$331			$330

$270

$221

Q2

FY19

Q3

FY19

Q4

FY19

Q1

FY20

Q2

FY20

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

Certain Cash Payments Impacting	Certain Cash Payments Impacting
Cash Flow from Operations ($M)*	Cash Flow from Operations ($M)*
(Quarterly)	(TTM)

Cash Restructuring

Cash Interest Related to Borrowing Cash Earn-Out Payments

Cash Restructuring

Cash Interest Related to Borrowing Cash Earn-Out Payments

																			$110															$108
																	$50
																			$49											$82	$82
													$34											$67	$71	$71
																			$62	$63
					$23			$24							$49																		$98
	$20
			$22																									$73	$73
											$30													$64	$65
	$20																			$60
															$53	$55	$57
	$11			$11			$11			$12
					$24
			$8			$9			$9			$9
			$3	$1	$2			$2	$4	$3	$1		$8	$7	$6	$7	$7	$6	$9	$9	$10
Q2	FY19	Q3	FY19	Q4	FY19	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21	Q2	FY19	Q3	FY19	Q4	FY19	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21

Capital Expenditures & Capitalization of	Capital Expenditures & Capitalization of
Software & Website Development Costs	Software & Website Development Costs
($M)	($M)
(Quarterly)	(TTM)

				Capital Expenditures				Capitalized Software					Capital Expenditures				Capitalized Software
	$29	$32															$106	$117	$120	$114	$110	$101
			$27	$26
			$25																	$94	$91
					$23			$23													$86
			$13											$46	$49
	$11							$20	$20		$45	$50	$50
			$14	$12	$11										$50	$44	$46
					$12	$8	$15													$47
											$12
																				$71
	$18	$19	$13	$14	$14	$11	$12	$8	$8		$61	$71	$64	$60	$51	$50	$45	$39
Q2	FY19	Q3	FY19	Q4	FY19	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21	Q2	FY19	Q3	FY19	Q4	FY19	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21

• Cash restructuring and cash interest related to borrowing impact both cash flow from operations and adjusted free cash flow. Cash earn-out payments impact cash flow from operations but are excluded from adjusted free cash flow.

Please see non-GAAP reconciliations at the end of this document.

Page 12 of 36

DEBT & SHARE REPURCHASES

As of December 31, 2020, our total debt net of issuance costs, was $1,271.1 million. Net debt, excluding issuance costs, other debt discounts and premiums and net of cash on the balance sheet, was $1,278.5 million, down from $1,360.6 million as of September 30, 2020 as we used excess cash to repay debt.

As previously described, during Q4 FY2020 we amended our credit facility to ensure financial flexibility while we are responding to the effects of the pandemic. The credit facility amendment suspends pre-existing maintenance covenants including the total and senior secured leverage covenants and interest coverage ratio covenant, until the publication of results for the quarter ending December 31, 2021, for which quarter the pre-amendment maintenance covenants will be reinstated. The covenant suspension period could end earlier at our election if we have total leverage equal to or lower than 4.75x annualized EBITDA for each of two consecutive quarters and are compliant with the pre-amendment maintenance covenants. We have met these requirements for Q1 and Q2 FY2021 and so this election is available to us at our option upon filing of these results. During the suspension period, we have new maintenance covenants requiring minimum liquidity (defined as unrestricted cash plus unused revolver) of $50 million and EBITDA (as defined in our debt agreements) above zero in each of the quarters ending June 30 and September 30, 2021. Our liquidity (unrestricted cash plus available revolver) increased from $542.8 million as of September 30, 2020 to $621.8 million as of December 31, 2020.

The calculation of our debt-covenant-defined leverage ratio (either total or senior secured debt to trailing-twelve-month EBITDA) uses definitions of both debt and EBITDA that differ from the corresponding figures reported in this document. For that reason, we will continue to provide visibility to our leverage ratio during the covenant suspension period, which was a total leverage ratio of

3.53 as of December 31, 2020, an increase from 3.41 as of September 30, 2020, and senior secured leverage ratio of 1.90, a decrease from last quarter. These calculations are based on gross leverage and do not reflect cash on the balance sheet.

We did not repurchase any shares during Q2 FY2021. As part of the Q4 FY2020 amendment to our credit facility we are not able to repurchase shares during the covenant suspension period.

Total Leverage Ratio*

3.21	3.19			3.42	3.57	3.41	3.53
2.74	3.00	2.99

Q2

FY19

Q3

FY19

Q4

FY19

Q1

FY20

Q2

FY20

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

*Total leverage ratio as calculated in accordance with our debt covenants

Amount Available for Borrowing ($M)

	$604	$522	$531		$585
$424	$439	$485	$502
			$424

Q2

FY19

Q3

FY19

Q4

FY19

Q1

FY20

Q2

FY20

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

Interest Expense Related to Borrowing

($M)*

(Income Statement View)

$28 $31 $30

$14 $15 $14 $15 $16 $17

Q2

FY19

Q3

FY19

Q4

FY19

Q1

FY20

Q2

FY20

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

*Excludes interest expense associated with our Waltham, Massachusetts lease as well as investment consideration

Share Repurchases ($M)

$305

$232

$90

$14

$12

$29

$-

$-

$-

Q2

FY19

Q3

FY19

Q4

FY19

Q1

FY20

Q2

FY20

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

Please see non-GAAP reconciliations at the end of this document.

Page 13 of 36

SEGMENT RESULTS

VISTAPRINT

Vistaprint's Q2 FY2021 revenue was up 1% year over year on a reported basis but declined 6% on an organic constant-currency basis. This is the first quarter that 99designs revenue is included in Vistaprint results. Though sequentially heightened pandemic restrictions negatively impacted revenue for most business products and event-related consumer products like invitations & announcements, Vistaprint delivered growth in seasonal holiday products and other product categories. Face masks continued to benefit Vistaprint's year-over-year growth, but revenue from face masks was lower sequentially both in absolute dollars and percentage of revenue.

Vistaprint segment EBITDA declined year over year by $26.5 million in Q2 FY2021 partly due to the pandemic-influenced change in product mix described above. As expected, advertising spend increased to 15% of segment revenue in Q2, up from 11% in Q1 and 14% in the year-ago period. Vistaprint further expanded return thresholds for performance advertising channels from Q1, and also increased upper-funnel advertising spend and brand-based sponsorships year over year by approximately $5 million. These investments contributed to growth in new customer count and bookings, but we don't expect to see returns on the upper-funnel and sponsorship spend until future quarters. Other Q2 operating expenses grew year over year with continued hiring, increased spend on an improved customer experience, and $4 million of agency fees for Q2 and future ad campaigns. These were partially offset by cost reductions including technology savings from a Q4 FY2020 restructuring and reduced consulting spend versus last year. The 99designs acquisition was neutral to segment EBITDA.

Vistaprint continues to progress on the multi-year project to rebuild its technology infrastructure. To date, we have launched new sites in seven countries, constantly iterating and improving capabilities on the site along with new processes that improve customer experience. We plan to launch in additional markets in coming quarters, including in the U.S. prior to our next holiday season.

Vistaprint had approximately $25 million of revenue related to face masks in Q2. We think mask-related sales will decline over the coming quarters, although we expect that such a decline in revenue from face masks should broadly coincide with the start of increased activity that should improve demand for core business products.

Revenue ($M) & Reported Revenue

Growth

Quarterly

$444	$359	$360	$343	$433	$316	$245	$329	$436
1%		1%
(2)%	(2)%	(1)%	(2)%		(4%)
(12)%
					(32)%

Q2FY19

Q3FY19

Q4FY19 Q1FY20

Q2FY20

Q3FY20 Q4FY20 Q1FY21

Q2FY21

Organic Constant-Currency Revenue

Growth

Quarterly

3%	1%	-%	1%	(2)%	(11)%	(5)%	(6)%
						(31)%

Q2FY19

Q3FY19 Q4FY19

Q1FY20 Q2FY20

Q3FY20

Q4FY20

Q1FY21

Q2FY21

2-Year Stacked Organic Constant-

Currency

Revenue Growth

		Earlier period		Later period

3%	1%	-%	1%	(2)%
(5)%	(6)%
(2)%	(11)%
	(4)%
(31)%	(8)%
	(10)%

Q2'19+ Q2'20

Q3'19+ Q3'20

Q4'19+ Q4'20

Q1'20+ Q1'21

Q2'20+ Q2'21

Segment EBITDA ($M) & Segment EBITDA

Margin

Quarterly

										$139							$112
	$103	$88	$94	$87							$90
			$74
						$66
		23%	25%	26%	25%	32%	23%	27%	27%	26%
Q2	FY19	Q3	FY19	Q4	FY19	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21

Vistaprint Advertising ($M) & as % of

Revenue

	$92
			$62	$54	$53	$61							$67
			$45
									$35
													$19
	21%	17%
	15%	15%	14%	14%					15%
					11%
					8%
					FY19
Q2	FY19	Q3	FY19	Q4	Q1	FY20	Q2	FY20	Q3	FY20	Q4	FY20	Q1	FY21	Q2	FY21

Please see non-GAAP reconciliations at the end of this document.

Page 14 of 36