Pitney Bowes (NYSE:PBI) executives used the company’s fiscal fourth-quarter 2025 earnings call to emphasize progress in an ongoing transformation effort, highlighting leadership additions, steps taken to simplify operations and reduce costs, and a near-term focus on stabilizing performance while positioning the business for profitable growth.
Leadership changes and transformation focus
Chief Executive Officer Kurt Wolf opened by welcoming recently announced executive hires, saying the company is attracting a “level of talent” he is excited to bring into the organization. Wolf singled out Steve Fischer, described as an accomplished bank leader, and said he looks forward to working with him to “maximize the value of Pitney Bowes Bank.”
Wolf also said the company expects to begin an “external review with qualified advisors” during the second quarter.
Guidance range reflects uncertainty
In response to a question about a wider guidance range, Wolf pointed to broader uncertainty, including the possibility of a government shutdown, which he said can affect performance in SendTech. He also referenced uncertainty around potential changes at the Federal Reserve and the direction of the economy.
While describing Pitney Bowes as “a pretty non-cyclical business,” Wolf said the marketing mail component of the Presort business is more economically sensitive and could face potential headwinds.
Presort: pricing strategy, customer wins, and margin expectations
Management spent significant time discussing Presort, including customer wins, competitive dynamics, and profitability expectations.
Asked about the timing of volume contributions from new business wins and “boomerang” customers, Wolf said volumes typically come in quickly, but he emphasized that the sales cycle can be lengthy. He said the company became more aggressive starting in June 2025 and that it took time to rebuild the pipeline. Wolf added that the pipeline is now “pretty full start to finish,” and said customer wins in the fourth quarter had already been matched “half the way into Q1” 2026. He cautioned that translating those wins into financial results takes time, particularly given the need to overcome “major losses from the first half of last year.”
On pricing, Wolf said Pitney Bowes was “caught flat-footed” early in 2025 as industry margins increased and competitors moved aggressively to win customers. He said the company faced headwinds including customer losses and concessions to retain existing customers, but wasn’t similarly aggressive in pursuing new business at that time. He described the current strategy as being more competitive on pricing primarily to win new customers, noting that concessions to the existing base have largely already been made.
Chief Financial Officer Paul Evans addressed profitability expectations, suggesting investors “target low-to-mid 20% range for EBIT margins” in Presort. Evans also said Pitney Bowes is the low-cost provider in the space, which he argued allows the company to sustain those margins even while becoming more aggressive on pricing.
When asked whether Presort could return to positive growth in the second half of 2026 as comparisons become easier, management said the second half should present a better year-over-year comparison but emphasized the company must work through tougher comparisons in the first half. Evans said the company is seeing traction, but reiterated that the sales cycle takes time.
SendTech: product cycle improving, but revenue expected to decline
Management said it expects SendTech revenue to decline overall in 2026, but forecast a stronger second half relative to the first. Evans said the company believes the “second half of the year will be stronger than the front part of the year.” Wolf added that quarterly year-over-year trends improved sequentially throughout 2025, which he tied to recovery from the IMI migration, and said the company expects that trend to continue at least through 2026, though he cautioned it may not improve every quarter.
Responding to a question about business mix within SendTech, Wolf broke the segment into three parts:
- Mailing meters: Wolf said the IMI migration created headwinds in 2025, which he expects to “slowly ease.” He also said the company historically focused on growing markets, which did not apply to mailing meters, and that more effort will be placed on slowing the rate of decline.
- Shipping software: Wolf said the company has a wide product array and is working to become more focused, including identifying where it has the best competitive advantage and refining go-to-market strategy. He said the team is “aggressively already testing some concepts” and that the company will have more to share in future quarters.
- The bank (reported within SendTech): Wolf said the hire of Fischer is intended to help unlock growth opportunities, though he said it is “too early to say” and that the company will remain cautious given lending risks.
Wolf also said management believes SendTech is exiting a low point in its product cycle tied to the IMI migration and said there has not been a fundamental change in competitive conditions. He added that the company believes it has strong products and is doing “increasingly well” in federal and government markets.
Capital allocation: opportunistic buybacks, leverage target, and investor day plans
Evans described the company’s approach to share repurchases and debt buybacks as “opportunistic” and “very disciplined,” noting activity was particularly strong in the fourth quarter. He said the company is committed to targeting net debt to EBITDA around 3x, while also arguing that the stock remains undervalued and that Pitney Bowes will continue to buy shares.
On leverage, Evans said the company finished the year “slightly below 3x” net debt to adjusted EBITDA and framed 3x as an appropriate target level, with expectations that results could move slightly above or below that mark quarter to quarter. Wolf added that while management believes the business could support higher leverage, it remains mindful of market perceptions and intends to manage leverage accordingly.
Management also said it plans to hold an investor day in 2026, with Wolf agreeing that there is an opportunity to further educate investors on the company’s fundamentals.
On free cash flow, Evans said a “big component” is Presort prepayments, noting the company does not fully control timing and that the fourth quarter was strong in that regard. When asked to quantify expected restructuring payments in 2026, Evans said the company adds back restructuring payments because they are not representative of ongoing operations, but he did not provide a specific figure. Later in the call, management attributed fourth-quarter restructuring costs primarily to headcount reductions and indicated most of those costs were captured in the 2025 number.
Wolf closed the call by reiterating that management is focused on building a strong foundation and said that as the foundation strengthens, the company expects to be more successful in its pursuit of growth.
About Pitney Bowes (NYSE:PBI)
Pitney Bowes Inc (NYSE: PBI) is an American technology company that specializes in shipping, mailing, and e-commerce solutions. Founded in 1920 by Walter Bowes and Arthur Pitney, the company pioneered postage meter technology and has since evolved to offer a broad portfolio of hardware, software, and services designed to streamline physical and digital communications. Headquartered in Stamford, Connecticut, Pitney Bowes leverages a century of expertise to serve enterprises, small businesses, and government agencies around the globe.
The company’s core offerings span mailing and shipping equipment, including postage meters, folder inserters, and address verification systems, alongside integrated software platforms for customer information management, data analytics, and location intelligence.
Recommended Stories
- Five stocks we like better than Pitney Bowes
- NEW LAW: Congress Approves Setup For Digital Dollar?
- Your Bank Account Is No Longer Safe
- ATCX is Sitting on One of Brazil’s Largest Critical Minerals Portfolios!
- This Company is Built to Monetize Today. Flexible for What Comes Next.
- Gilder: Don’t Buy AI Stocks, Do This Instead
