UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


(Mark One)
☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	~~December 31, 2021~~September 30, 2022
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission file number 000-51539

Cimpress plc

(Exact Name of Registrant as Specified in Its Charter)


Ireland									98-0417483
(State or Other Jurisdiction of Incorporation or Organization)									(I.R.S. Employer Identification No.)

Building D, Xerox Technology Park A91 H9N9,

Dundalk, Co. Louth

Ireland

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: 353 42 938 8500

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Exchange on Which Registered

Ordinary Shares, nominal value of €0.01 per share

CMPR

NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ☐ No þ

As of ~~January~~October 24, 2022, there were ~~26,101,248~~26,232,581 Cimpress plc ordinary shares outstanding.

CIMPRESS PLC

QUARTERLY REPORT ON FORM 10-Q

For the Three ~~and Six~~ Months Ended ~~December 31, 2021~~September 30, 2022

TABLE OF CONTENTS


						Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)						1
Consolidated Balance Sheets as of ~~December 31, 2021~~September 30, 2022 and June 30, ~~2021~~2022						1
Consolidated Statements of Operations for the three ~~and six~~ months ended ~~December 31,~~September 30, 2022 and 2021 ~~and 2020~~						2
Consolidated Statements of Comprehensive ~~Income~~Loss for the three ~~and six~~ months ended ~~December 31,~~September 30, 2022 and 2021 ~~and 2020~~						3
Consolidated Statements of Shareholders' Deficit for the three ~~and six~~ months ended ~~December 31,~~September 30, 2022 and 2021 ~~and 2020~~						4
Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~December 31,~~September 30, 2022 and 2021 ~~and 2020~~						65
Notes to Consolidated Financial Statements						76
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations						2925
Item 3. Quantitative and Qualitative Disclosures About Market Risk						4337
Item 4. Controls and Procedures						4438

PART II OTHER INFORMATION
Item 1A. Risk Factors						4439
Item 6. Exhibits						4539
Signatures						4640

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CIMPRESS PLC

CONSOLIDATED BALANCE SHEETS

(unaudited in thousands, except share and per share data)


		December 31, 2021		June 30, 2021			September 30, 2022		June 30, 2022
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	231,159	$	183,023	Cash and cash equivalents	$	132,100	$	277,053
Marketable securities	Marketable securities	147,199		152,248		Marketable securities	101,726		49,952
Accounts receivable, net of allowances of $7,055 and $9,404, respectively		61,537		50,679
Accounts receivable, net of allowances of $6,652 and $6,140, respectively						Accounts receivable, net of allowances of $6,652 and $6,140, respectively	70,533		63,885
Inventory	Inventory	96,656		70,044		Inventory	153,504		126,728
Prepaid expenses and other current assets	Prepaid expenses and other current assets	94,000		72,504		Prepaid expenses and other current assets	121,428		108,697

Total current assets	Total current assets	630,551		528,498		Total current assets	579,291		626,315
Property, plant and equipment, net	Property, plant and equipment, net	301,909		328,679		Property, plant and equipment, net	272,625		286,826
Operating lease assets, net	Operating lease assets, net	82,413		87,626		Operating lease assets, net	64,389		80,694
Software and website development costs, net	Software and website development costs, net	90,431		87,690		Software and website development costs, net	89,661		90,474
Deferred tax assets	Deferred tax assets	138,805		149,618		Deferred tax assets	114,020		113,088
Goodwill	Goodwill	783,159		726,979		Goodwill	748,055		766,600
Intangible assets, net	Intangible assets, net	180,960		186,744		Intangible assets, net	139,864		154,730
Marketable securities, non-current	Marketable securities, non-current	27,693		50,713		Marketable securities, non-current	22,449		—
Other assets	Other assets	39,456		35,951		Other assets	67,693		48,945
Total assets	Total assets	$	2,275,377	$	2,182,498	Total assets	$	2,098,047	$	2,167,672
Liabilities, noncontrolling interests and shareholders’ deficit	Liabilities, noncontrolling interests and shareholders’ deficit					Liabilities, noncontrolling interests and shareholders’ deficit
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	271,430	$	199,831	Accounts payable	$	285,226	$	313,710
Accrued expenses	Accrued expenses	260,930		247,513		Accrued expenses	266,196		253,841
Deferred revenue	Deferred revenue	57,521		50,868		Deferred revenue	54,229		58,861
Short-term debt	Short-term debt	11,217		9,895		Short-term debt	9,900		10,386
Operating lease liabilities, current	Operating lease liabilities, current	28,522		26,551		Operating lease liabilities, current	23,013		27,706
Other current liabilities	Other current liabilities	75,599		103,515		Other current liabilities	33,061		28,035

Total current liabilities	Total current liabilities	705,219		638,173		Total current liabilities	671,625		692,539
Deferred tax liabilities	Deferred tax liabilities	23,161		27,433		Deferred tax liabilities	48,418		41,142
Long-term debt	Long-term debt	1,707,052		1,732,511		Long-term debt	1,654,529		1,675,562

Operating lease liabilities, non-current	Operating lease liabilities, non-current	59,444		66,222		Operating lease liabilities, non-current	44,783		57,474
Other liabilities	Other liabilities	78,522		96,410		Other liabilities	56,443		64,394
Total liabilities	Total liabilities	2,573,398		2,560,749		Total liabilities	2,475,798		2,531,111
Commitments and contingencies (Note 13)
Commitments and contingencies (Note 12)						Commitments and contingencies (Note 12)
Redeemable noncontrolling interests	Redeemable noncontrolling interests	84,783		71,120		Redeemable noncontrolling interests	129,909		131,483
Shareholders’ deficit:	Shareholders’ deficit:					Shareholders’ deficit:
Preferred shares, nominal value €0.01 per share, 100,000,000 shares authorized; none issued and outstanding	Preferred shares, nominal value €0.01 per share, 100,000,000 shares authorized; none issued and outstanding	—		—		Preferred shares, nominal value €0.01 per share, 100,000,000 shares authorized; none issued and outstanding	—		—
Ordinary shares, nominal value €0.01 per share, 100,000,000 shares authorized; 44,080,627 shares issued; 26,100,345 and 26,035,910 shares outstanding, respectively		615		615
Deferred ordinary shares, nominal value €1.00 per share, 25,000 shares authorized, issued and outstanding		28		28
Treasury shares, at cost, 17,980,282 and 18,044,717 shares, respectively		(1,364,336)		(1,368,595)
Ordinary shares, nominal value €0.01 per share, 100,000,000 shares authorized; 44,196,093 and 44,083,569 shares issued, respectively; 26,224,846 and 26,112,322 shares outstanding, respectively						Ordinary shares, nominal value €0.01 per share, 100,000,000 shares authorized; 44,196,093 and 44,083,569 shares issued, respectively; 26,224,846 and 26,112,322 shares outstanding, respectively	615		615

Treasury shares, at cost, 17,971,247 shares for both periods presented						Treasury shares, at cost, 17,971,247 shares for both periods presented	(1,363,550)		(1,363,550)
Additional paid-in capital	Additional paid-in capital	476,002		459,904		Additional paid-in capital	509,444		501,003
Retained earnings	Retained earnings	562,214		530,159		Retained earnings	385,972		414,138
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(57,327)		(71,482)		Accumulated other comprehensive loss	(40,141)		(47,128)

Total shareholders' deficit	Total shareholders' deficit	(382,804)		(449,371)		Total shareholders' deficit	(507,660)		(494,922)
Total liabilities, noncontrolling interests and shareholders’ deficit	Total liabilities, noncontrolling interests and shareholders’ deficit	$	2,275,377	$	2,182,498	Total liabilities, noncontrolling interests and shareholders’ deficit	$	2,098,047	$	2,167,672

See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited in thousands, except share and per share data)

Three Months Ended December 31, Six Months Ended December 31,
2021 2020 2021 2020
Revenue $ 849,716 $ 780,904 $ 1,507,315 $ 1,367,404
Cost of revenue (1) 423,937 380,738 762,926 679,582
Technology and development expense (1) 70,267 65,036 137,544 123,525
Marketing and selling expense (1) 208,616 182,322 383,313 320,472
General and administrative expense (1) 46,726 42,979 93,274 84,791
Amortization of acquired intangible assets 13,882 13,453 27,340 26,758
Restructuring expense 307 2,182 (2) 2,096
Income from operations 85,981 94,194 102,920 130,180
Other income (expense), net 12,839 (17,198) 26,009 (25,952)
Interest expense, net (25,369) (30,141) (51,057) (60,657)
Income before income taxes 73,451 46,855 77,872 43,571
Income tax expense 17,298 12,954 26,679 19,748
Net income 56,153 33,901 51,193 23,823
Add: Net (income) attributable to noncontrolling interest (1,364) (1,614) (3,102) (2,291)
Net income attributable to Cimpress plc $ 54,789 $ 32,287 $ 48,091 $ 21,532
Basic net income per share attributable to Cimpress plc $ 2.10 $ 1.24 $ 1.84 $ 0.83
Diluted net income per share attributable to Cimpress plc $ 2.08 $ 1.22 $ 1.82 $ 0.82
Weighted average shares outstanding — basic 26,096,786 26,003,649 26,084,518 25,974,823
Weighted average shares outstanding — diluted 26,402,703 26,384,460 26,493,258 26,390,273


	Three Months Ended September 30,
	2022		2021
Revenue	$	703,415	$	657,599
Cost of revenue (1)	377,735		338,989
Technology and development expense (1)	74,475		67,277
Marketing and selling expense (1)	200,930		174,697
General and administrative expense (1)	54,072		46,548
Amortization of acquired intangible assets	12,350		13,458
Restructuring expense (1)	1,820		(309)


(Loss) income from operations	(17,967)		16,939
Other income, net	27,397		13,170
Interest expense, net	(24,806)		(25,688)

(Loss) income before income taxes	(15,376)		4,421
Income tax expense	9,365		9,381
Net loss	(24,741)		(4,960)
Add: Net (income) attributable to noncontrolling interests	(700)		(1,738)
Net loss attributable to Cimpress plc	$	(25,441)	$	(6,698)
Basic and diluted net loss per share attributable to Cimpress plc	$	(0.97)	$	(0.26)

Weighted average shares outstanding — basic and diluted	26,178,818		26,072,249

(1) Share-based compensation is allocated as follows:


		Three Months Ended December 31,				Six Months Ended December 31,					Three Months Ended September 30,
		2021		2020		2021		2020				2022		2021
Cost of revenue	Cost of revenue	$	127	$	34	$	243	$	134	Cost of revenue		$	193	$	116
Technology and development expense	Technology and development expense	3,355		1,215		6,258		3,406		Technology and development expense		3,041		2,903
Marketing and selling expense	Marketing and selling expense	2,798		754		5,475		2,439		Marketing and selling expense		2,459		2,677
General and administrative expense	General and administrative expense	6,225		3,240		11,535		7,547		General and administrative expense		4,782		5,310

Restructuring expense										Restructuring expense		156		—

See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited in thousands)

Three Months Ended December 31, Six Months Ended December 31,
2021 2020 2021 2020
Net income $ 56,153 $ 33,901 $ 51,193 $ 23,823
Other comprehensive income, net of tax:
Foreign currency translation gains, net of hedges 3,542 13,946 3,359 14,763
Net unrealized (losses) gains on derivative instruments designated and qualifying as cash flow hedges (2,498) 3,802 (4,423) 7,638
Amounts reclassified from accumulated other comprehensive loss to net income on derivative instruments 7,768 (3,226) 13,314 (5,297)
Gain (loss) on pension benefit obligation, net 444 — 444 (336)
Comprehensive income 65,409 48,423 63,887 40,591
Add: Comprehensive income attributable to noncontrolling interests (760) (2,877) (1,641) (4,980)
Total comprehensive income attributable to Cimpress plc $ 64,649 $ 45,546 $ 62,246 $ 35,611


	Three Months Ended September 30,
	2022		2021
Net loss	$	(24,741)	$	(4,960)
Other comprehensive (loss) income, net of tax:
Foreign currency translation losses, net of hedges	(8,182)		(183)
Net unrealized gains (losses) on derivative instruments designated and qualifying as cash flow hedges	16,760		(1,925)
Amounts reclassified from accumulated other comprehensive loss to net loss on derivative instruments	(2,938)		5,546



Comprehensive loss	(19,101)		(1,522)
Add: Comprehensive loss (income) attributable to noncontrolling interests	647		(881)
Total comprehensive loss attributable to Cimpress plc	$	(18,454)	$	(2,403)

See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT

(unaudited in thousands)

Ordinary Shares Deferred Ordinary Shares Treasury Shares
Number of
Shares
Issued Amount Number of
Shares
Issued Amount Number
of
Shares Amount Additional
Paid-in
Capital Retained
Earnings Accumulated Other
Comprehensive
Loss Total
Shareholders’
Deficit
Balance at June 30, 2020 44,080 $ 615 25 $ 28 (18,195) $ (1,376,496) $ 438,616 $ 618,437 $ (88,676) $ (407,476)
Restricted share units vested, net of shares withheld for taxes — — — — 118 7,773 (13,366) — — (5,593)
Share-based compensation expense — — — — — — 8,577 — — 8,577
Net loss attributable to Cimpress plc — — — — — — — (10,755) — (10,755)
Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges — — — — — — — — 1,765 1,765
Foreign currency translation, net of hedges — — — — — — — — (609) (609)
Unrealized loss on pension benefit obligation, net of tax — — — — — — — — (336) (336)
Balance at September 30, 2020 44,080 $ 615 25 $ 28 (18,077) $ (1,368,723) $ 433,827 $ 607,682 $ (87,856) $ (414,427)
Share-based compensation expense — — — — — — 5,036 — — 5,036
Net income attributable to Cimpress plc — — — — — — — 32,287 — 32,287
Redeemable noncontrolling interest accretion to redemption value — — — — — — — (1,086) — (1,086)
Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges — — — — — — — — 576 576
Foreign currency translation, net of hedges — — — — — — — — 12,683 12,683
Balance at December 31, 2020 44,080 $ 615 25 $ 28 (18,077) $ (1,368,723) $ 438,863 $ 638,883 $ (74,597) $ (364,931)

~~See accompanying notes.~~

~~CIMPRESS PLC~~

~~CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT (CONTINUED)~~

~~(unaudited in thousands)~~


		Ordinary Shares			Deferred Ordinary Shares			Treasury Shares																									Ordinary Shares					Deferred Ordinary Shares			Treasury Shares
		Number of Shares Issued	Amount		Number of Shares Issued	Amount		Number of Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Deficit																Number of Shares Issued		Amount			Number of Shares Issued	Amount		Number of Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Deficit
Balance at June 30, 2021	Balance at June 30, 2021	44,080	$	615	25	$	28	(18,045)	$	(1,368,595)	$	459,904	$	530,159	$	(71,482)	$	(449,371)													Balance at June 30, 2021		44,080		$	615		25	$	28	(18,045)	$	(1,368,595)	$	459,904	$	530,159	$	(71,482)	$	(449,371)

Restricted share units vested, net of shares withheld for taxes	Restricted share units vested, net of shares withheld for taxes	—	—		—	—		54	3,516		(6,095)		—		—		(2,579)														Restricted share units vested, net of shares withheld for taxes		—		—			—	—		54	3,516		(6,095)		—		—		(2,579)

Share-based compensation expense	Share-based compensation expense	—	—		—	—		—	—		11,129		—		—		11,129														Share-based compensation expense		—		—			—	—		—	—		11,129		—		—		11,129
Net income attributable to Cimpress plc		—	—		—	—		—	—		—		(6,698)		—		(6,698)
Net loss attributable to Cimpress plc																			Net loss attributable to Cimpress plc	—	—		—	—		—	—		—			(6,698)		—			(6,698)
Redeemable noncontrolling interest accretion to redemption value	Redeemable noncontrolling interest accretion to redemption value	—	—		—	—		—	—		—		(7,592)		—		(7,592)														Redeemable noncontrolling interest accretion to redemption value		—		—			—	—		—	—		—		(7,592)		—		(7,592)
Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges	Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges	—	—		—	—		—	—		—		—		3,621		3,621														Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges		—		—			—	—		—	—		—		—		3,621		3,621
Foreign currency translation, net of hedges	Foreign currency translation, net of hedges	—	—		—	—		—	—		—		—		674		674														Foreign currency translation, net of hedges		—		—			—	—		—	—		—		—		674		674
Balance at September 30, 2021	Balance at September 30, 2021	44,080	$	615	25	$	28	(17,991)	$	(1,365,079)	$	464,938	$	515,869	$	(67,187)	$	(450,816)													Balance at September 30, 2021		44,080		$	615		25	$	28	(17,991)	$	(1,365,079)	$	464,938	$	515,869	$	(67,187)	$	(450,816)

Balance at June 30, 2022																			Balance at June 30, 2022	44,084	$	615	—	$	—	(17,971)	$	(1,363,550)	$	501,003		$	414,138	$	(47,128)		$	(494,922)

Restricted share units vested, net of shares withheld for taxes	Restricted share units vested, net of shares withheld for taxes	—	—		—	—		11	743		(1,062)		—		—		(319)														Restricted share units vested, net of shares withheld for taxes		112		—			—	—		—	—		(2,212)		—		—		(2,212)

Share-based compensation expense	Share-based compensation expense	—	—		—	—		—	—		12,398		—		—		12,398														Share-based compensation expense		—		—			—	—		—	—		10,653		—		—		10,653
Net income attributable to Cimpress plc		—	—		—	—		—	—		—		54,789		—		54,789
Net loss attributable to Cimpress plc																			Net loss attributable to Cimpress plc	—	—		—	—		—	—		—			(25,441)		—			(25,441)
Redeemable noncontrolling interest accretion to redemption value	Redeemable noncontrolling interest accretion to redemption value	—	—		—	—		—	—		—		(8,444)		—		(8,444)														Redeemable noncontrolling interest accretion to redemption value		—		—			—	—		—	—		—		(2,725)		—		(2,725)
Purchase of noncontrolling interest		—	—		—	—		—	—		(272)		—		—		(272)
Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges	Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges	—	—		—	—		—	—		—		—		5,270		5,270														Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges		—		—			—	—		—	—		—		—		13,822		13,822
Foreign currency translation, net of hedges	Foreign currency translation, net of hedges	—	—		—	—		—	—		—		—		4,146		4,146														Foreign currency translation, net of hedges		—		—			—	—		—	—		—		—		(6,835)		(6,835)
Unrealized gain on pension benefit obligation, net of tax		—	—		—	—		—	—		—		—		444		444

Balance at December 31, 2021		44,080	$	615	25	$	28	(17,980)	$	(1,364,336)	$	476,002	$	562,214	$	(57,327)	$	(382,804)
Balance at September 30, 2022																			Balance at September 30, 2022	44,196	$	615	—	$	—	(17,971)	$	(1,363,550)	$	509,444		$	385,972	$	(40,141)		$	(507,660)

See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited in thousands)

Six Months Ended December 31,
2021 2020
Operating activities
Net income $ 51,193 $ 23,823
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 89,746 85,887
Share-based compensation expense 23,511 13,526
Deferred taxes 3,977 2,681
Unrealized (gain) loss on derivatives not designated as hedging instruments included in net income (23,020) 32,545
Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency (6,302) (3,132)
Other non-cash items (1,699) 4,829
Changes in operating assets and liabilities:
Accounts receivable (13,102) (14,259)
Inventory (23,327) 510
Prepaid expenses and other assets (9,969) 78
Accounts payable 69,318 60,800
Accrued expenses and other liabilities 19,585 48,880
Net cash provided by operating activities 179,911 256,168
Investing activities
Purchases of property, plant and equipment (26,539) (16,790)
Business acquisitions, net of cash acquired (68,946) (36,395)
Capitalization of software and website development costs (32,134) (26,445)
Proceeds from the sale of assets 25,835 3,372
Proceeds from maturity of held-to-maturity investments 27,000 —
Payments for settlement of derivatives designated as hedging instruments (1,880) —
Other investing activities (617) (419)
Net cash used in investing activities (77,281) (76,677)
Financing activities
Proceeds from borrowings of debt — 301,000
Payments of debt (7,671) (472,469)
Payments of debt issuance costs (1,435) (1,051)
Payments of purchase consideration included in acquisition-date fair value — (648)
Payments of withholding taxes in connection with equity awards (2,898) (5,592)
Payments of finance lease obligations (33,107) (3,275)
Purchase of noncontrolling interests (324) (5,063)
Distribution to noncontrolling interest (3,963) (4,599)
Other financing activities 41 (57)
Net cash used in financing activities (49,357) (191,754)
Effect of exchange rate changes on cash (5,137) 4,125
Net increase (decrease) in cash and cash equivalents 48,136 (8,138)
Cash and cash equivalents at beginning of period 183,023 45,021
Cash and cash equivalents at end of period $ 231,159 $ 36,883

Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest $ 49,687 $ 58,299
Income taxes 15,825 4,991
Non-cash investing and financing activities
Property and equipment acquired under finance leases 3,596 150
Amounts accrued related to property, plant and equipment 9,818 7,990
Amounts accrued related to capitalized software development costs 475 2,719
Amounts accrued related to business acquisitions 52,677 45,369


	Three Months Ended September 30,
	2022		2021
Operating activities
Net loss	$	(24,741)	$	(4,960)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	40,942		44,432

Share-based compensation expense	10,631		11,006

Deferred taxes	(1,024)		(1,138)




Unrealized gain on derivatives not designated as hedging instruments included in net loss	(14,024)		(16,534)
Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency	(749)		174

Other non-cash items	2,158		(471)

Changes in operating assets and liabilities, net of effects of businesses acquired:
Accounts receivable	(9,460)		(7,149)
Inventory	(36,434)		(11,744)
Prepaid expenses and other assets	3,151		(4,832)
Accounts payable	(12,013)		10,290
Accrued expenses and other liabilities	16,312		17,493
Net cash (used in) provided by operating activities	(25,251)		36,567
Investing activities
Purchases of property, plant and equipment	(11,758)		(8,624)



Capitalization of software and website development costs	(15,330)		(15,639)
Proceeds from the sale of assets	122		1,699

Purchases of marketable securities	(84,030)		—
Proceeds from maturity of held-to-maturity investments	9,953		10,000


Other investing activities	—		(617)
Net cash used in investing activities	(101,043)		(13,181)
Financing activities
Proceeds from borrowings of debt	10,000		—




Payments of debt	(13,256)		(4,111)



Payments of debt issuance costs	(23)		(1,137)
Payments of purchase consideration included in acquisition-date fair value	(225)		—
Payments of withholding taxes in connection with equity awards	(2,212)		(2,579)
Payments of finance lease obligations	(2,412)		(2,526)






Distributions to noncontrolling interests	(3,652)		—
Other financing activities	—		2
Net cash used in financing activities	(11,780)		(10,351)
Effect of exchange rate changes on cash	(6,879)		(2,827)

Net (decrease) increase in cash and cash equivalents	(144,953)		10,208
Cash and cash equivalents at beginning of period	277,053		183,023
Cash and cash equivalents at end of period	$	132,100	$	193,231

Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	15,060	$	14,358
Income taxes	4,257		7,767
Non-cash investing and financing activities
Property and equipment acquired under finance leases	2,412		865
Amounts accrued related to property, plant and equipment	9,500		7,441
Amounts accrued related to capitalized software development costs	213		2,357
Amounts accrued related to business acquisitions	8,463		44,852

See accompanying notes.

CIMPRESS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited in thousands, except share and per share data)

1. Description of the Business

Cimpress is a strategically focused group of more than a dozen businesses that specialize in mass customization of printing and related products, via which we deliver large volumes of individually small-sized customized ~~orders for~~orders. Our products include a broad ~~spectrum~~range of ~~print,~~marketing materials, business cards, signage, promotional products, logo apparel, packaging, books and magazines, wall decor, photo merchandise, invitations and announcements, ~~writing instruments, packaging, apparel~~ and other categories. ~~We invest in and build customer-focused, entrepreneurial mass customization businesses for the long term, which we manage in a decentralized, autonomous manner.~~ Mass customization is a core element of the business model of each Cimpress business. We drive competitive advantage across Cimpress through a select few shared strategic capabilities that have the greatest potential to create Cimpress-wide value. We limit all other central activities to only those which absolutely must be performed centrally.

~~In October 2021 our Vistaprint~~ business and ~~reportable segment began evolving its brand architecture~~is a competitive strategy which seeks to ~~"Vista". Brands like "VistaPrint", "VistaCreate", "99designs by Vista",~~produce goods and ~~"Vista Corporate Solutions" now operate within the "Vista" architecture. This move should help open customers' minds~~services to ~~allow us to serve a broader set of their~~meet individual customer needs across a wide range of products and solutions that includes design, social media and web presence as well as print. No changes were made to our internal organizational or reporting structure as a result of this rebranding, but we we now refer to this reportable segment as "Vista".with near mass production efficiency.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Cimpress plc, its wholly owned subsidiaries, entities in which we maintain a controlling financial interest, and those entities in which we have a variable interest and are the primary beneficiary. Intercompany balances and transactions have been eliminated. Investments in entities in which we cannot exercise significant influence, and for which the related equity securities do not have a readily determinable fair value, are included in other assets on the consolidated balance sheets; otherwise the investments are recognized by applying equity method accounting. Our equity method investments are included in other assets on the consolidated balance sheets.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We believe our most significant estimates are associated with the ongoing evaluation of the recoverability of our long-lived assets and goodwill, estimated useful lives of assets, share-based compensation, accounting for business combinations, and income taxes and related valuation allowances, among others. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results could differ from those estimates.

~~Significant Accounting Policies~~

~~Our significant accounting policies are described in Note 2 in our consolidated financial statements included in the Form 10-K for our year ended June 30, 2021.~~

Revision of Prior Period Financial Statements

Foreign Currency Gains Associated with Intercompany Loan Hedge

During the quarter ended December 31, 2021, we identified an error related to the recognition of foreign currency gains that were included in other income (expense), net within our consolidated statements of operations, associated with a net investment hedge. In May 2021, we designated a €300,000 intercompany loan as a net investment hedge to hedge the risk of changes in the U.S. dollar equivalent value of a portion of our net investment in one of our consolidated subsidiaries that has the Euro as its functional currency. As this hedging instrument was designated as a net investment hedge, all foreign currency gains and losses should be recognized in accumulated other comprehensive loss as part of currency translation adjustment. For the ~~year ended June 30, 2021 and~~ three months ended September 30, 2021, we incorrectly recognized ~~$7,518 and~~ $9,027, respectively, of gains in other income (expense), net. This error overstated other income (expense), net; income (loss) before income taxes; and net income for both periods but did not have an impact on cash provided by operating activities, since it is a non-cash currency item. Included below are the revisions made for each period presented.

Consolidated Balance Sheets As of September 30, 2021
Reported Adjustments Revised
Accumulated other comprehensive loss $ (83,732) $ 16,545 $ (67,187)
Retained earnings 532,414 (16,545) 515,869
As of June 30, 2021
Reported Adjustments Revised
Accumulated other comprehensive loss $ (79,000) $ 7,518 $ (71,482)
Retained earnings 537,677 (7,518) 530,159
Consolidated Statements of Operations Three months ended
September 30, 2021
Reported Adjustments Revised
Other income (expense), net $ 22,197 $ (9,027) $ 13,170
Income (loss) before income taxes 13,448 (9,027) 4,421
Net income (loss) 4,067 (9,027) (4,960)
Net income (loss) attributable to Cimpress plc 2,329 (9,027) (6,698)
Net income (loss) per share attributable to Cimpress plc:
Basic $ 0.09 $ (0.35) $ (0.26)
Diluted $ 0.09 $ (0.35) $ (0.26)
Consolidated Statements of Comprehensive Loss Three months ended
September 30, 2021
Reported Adjustments Revised
Net income (loss) $ 4,067 $ (9,027) $ (4,960)
Foreign currency translation losses, net of hedges (9,210) 9,027 (183)
Consolidated Statements of Shareholders' Deficit Three months ended
September 30, 2021
Reported Adjustments Revised
Net income (loss) attributable to Cimpress plc $ 2,329 $ (9,027) $ (6,698)
Foreign currency translation, net of hedges (8,353) 9,027 674
Consolidated Statements of Cash Flows Three months ended
September 30, 2021
Reported Adjustments Revised
Net income (loss) $ 4,067 $ (9,027) $ (4,960)
Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency (8,853) 9,027 174

Consolidated Statements of Operations Year ended
June 30, 2021
Reported Adjustments Revised
Other income (expense), net $ (11,835) $ (7,518) $ (19,353)
Loss before income taxes (56,036) (7,518) (63,554)
Net loss (74,939) (7,518) (82,457)
Net loss attributable to Cimpress plc (77,711) (7,518) (85,229)
Net loss per share attributable to Cimpress plc:
Basic $ (2.99) $ (0.29) $ (3.28)
Diluted $ (2.99) $ (0.29) $ (3.28)
Consolidated Statements of Comprehensive (Loss) Income Year ended
June 30, 2021
Reported Adjustments Revised
Net loss $ (74,939) $ (7,518) $ (82,457)
Foreign currency translation losses, net of hedges 5,397 7,518 12,915
Consolidated Statements of Shareholders' Equity (Deficit) Year ended
June 30, 2021
Reported Adjustments Revised
Net loss attributable to Cimpress plc $ (77,711) $ (7,518) $ (85,229)
Foreign currency translation, net of hedges 3,765 7,518 11,283
Consolidated Statements of Cash Flows Year ended
June 30, 2021
Reported Adjustments Revised
Net loss $ (74,939) $ (7,518) $ (82,457)
Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency (7,278) 7,518 240


Consolidated Balance Sheets	As of September 30, 2021
	Reported		Adjustments		Revised
Accumulated other comprehensive loss	$	(83,732)	$	16,545	$	(67,187)
Retained earnings	532,414		(16,545)		515,869






Consolidated Statements of Operations	Three months ended September 30, 2021
	Reported		Adjustments		Revised
Other income (expense), net	$	22,197	$	(9,027)	$	13,170
Income (loss) before income taxes	13,448		(9,027)		4,421
Net income (loss)	4,067		(9,027)		(4,960)
Net income (loss) attributable to Cimpress plc	2,329		(9,027)		(6,698)
Net income (loss) per share attributable to Cimpress plc:
Basic	$	0.09	$	(0.35)	$	(0.26)
Diluted	$	0.09	$	(0.35)	$	(0.26)

Consolidated Statements of Comprehensive Loss	Three months ended September 30, 2021
	Reported		Adjustments		Revised
Net income (loss)	$	4,067	$	(9,027)	$	(4,960)
Foreign currency translation losses, net of hedges	(9,210)		9,027		(183)

Consolidated Statements of Shareholders' Deficit	Three months ended September 30, 2021
	Reported		Adjustments		Revised
Net income (loss) attributable to Cimpress plc	$	2,329	$	(9,027)	$	(6,698)
Foreign currency translation, net of hedges	(8,353)		9,027		674

Consolidated Statements of Cash Flows	Three months ended September 30, 2021
	Reported		Adjustments		Revised
Net income (loss)	$	4,067	$	(9,027)	$	(4,960)
Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency	(8,853)		9,027		174

~~Presentation of Revenue and Cost of Revenue~~

During the first quarter of fiscal 2022, we identified an immaterial error related to the presentation of revenue for one-to-one design service arrangements that overstated revenue and cost of revenue for the period from October 1, 2020 through June 30, 2021. On October 1, 2020 we acquired the 99designs business, which is presented as part of our Vista reportable segment, and after acquisition we recognized revenue on a gross basis as if we were the principal to the transactions. During the first quarter of fiscal 2022, we reconsidered the guidance of ASC 606-10-55-39 and confirmed we are the principal for contest arrangements; however, the one-to-one design service portion of 99designs revenue is governed by different terms and conditions. We evaluated whether we have control over these services before the design is transferred to the customer, as we leverage a network of third-party designers to fulfill this offering. The pricing and fulfillment responsibility aspects of the one-to-one design arrangements led us to conclude we are an agent to these specific transactions.

~~The revision for the three and six months ended December 31, 2020 is summarized in the table below.~~

Consolidated Statements of Operations Three months ended
December 30, 2020
Reported Adjustments Revised
Revenue $ 786,145 $ (5,241) $ 780,904
Cost of revenue 385,979 (5,241) 380,738
Six months ended
December 31, 2020
Reported Adjustments Revised
Revenue $ 1,372,645 $ (5,241) $ 1,367,404
Cost of revenue 684,823 (5,241) 679,582

~~The impact of this revision will result in a decrease to revenue and cost of revenue for the third quarter of fiscal 2021 of $5,489 and for fiscal year 2021 of $16,552.~~

Management assessed the materiality of the misstatements described above on prior period financial statements in accordance with SEC Staff Accounting Bulletin (“SAB” No. 99, Materiality, codified in ASC 250-10, Accounting Changes and Error Corrections ("ASC 250") and ASC 250 (SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements) and concluded that these misstatements were not material to any prior annual or interim periods.

~~Purchase and Sale of Leased Facility~~

During the current quarter, we paid $27,885 to exercise the purchase option available for one of our leased facilities, resulting in a $23,534 decrease in the current portion of our finance lease obligations. We immediately sold this facility to a separate third party for $23,226. Due to an impairment charge recognized during the third quarter of fiscal 2021 that resulted from triggering events that assumed a less advantageous sublease scenario than the current-quarter sale, we recognized a $3,324 gain on the sale of the asset within general and administrative expense on our consolidated statement of operations during the three and six months ended December 31, 2021.

For the six months ended December 31, 2021, our consolidated statement of cash flows includes a $3,324 noncash adjustment within cash provided by operating activities to eliminate the gain described above, a $23,226 cash inflow for the sale of the facility presented as an investing activity, and a $27,885 cash outflow for the exercise of the purchase option presented as a financing activity.

Marketable Securities

We hold certain investments that are classified as held-to-maturity (HTM) as we have the intent and ability to hold them to their maturity dates. Our policy is to invest in the following permitted classes of assets: overnight money market funds invested in U.S. Treasury securities and U.S. government agency securities, U.S. Treasury ~~securities-specifically~~securities, specifically U.S. Treasury bills, notes, and bonds, U.S. government agency securities, bank time deposits, commercial paper, corporate notes and bonds, and medium term notes. We generally invest in securities with a maturity of two years or less. As the investments are classified as held-to-maturity they are recorded at amortized cost and interest income is recorded as it is earned within interest expense, net.

We will continue to assess our securities for impairment when the fair value is less than amortized cost to determine if any risk of credit loss exists. As our intent is to hold the securities to maturity, we must assess whether any credit losses related to our investments are recoverable and determine if it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. We did not record an allowance for credit losses and we recognized no impairments for these marketable securities during the three ~~and six~~ months ended ~~December 31, 2021,~~September 30, 2022 and ~~we held no marketable securities during the prior comparative periods.~~2021.

The following is a summary of the net carrying amount, unrealized gains, unrealized losses, and fair value of held-to-maturity securities by type and contractual maturity as of ~~December 31, 2021~~September 30, 2022 and June 30, ~~2021.~~2022.


		December 31, 2021				September 30, 2022
		Amortized cost		Unrealized losses			Fair value			Amortized cost		Unrealized losses		Fair value
Due within one year or less:	Due within one year or less:								Due within one year or less:
Commercial paper	Commercial paper	$	47,490	$	(12)		$	47,478	Commercial paper	$	50,608	$	(261)	$	50,347
Corporate debt securities	Corporate debt securities	99,709		(102)			99,607		Corporate debt securities	51,118		(518)		50,600
Total due within one year or less	Total due within one year or less	147,199		(114)			147,085		Total due within one year or less	$	101,726	$	(779)	$	100,947
Due between one and two years:	Due between one and two years:								Due between one and two years:
Corporate debt securities	Corporate debt securities	27,693		(126)			27,567		Corporate debt securities	$	13,239	$	(271)	$	12,968
U.S. government securities									U.S. government securities	9,210		(124)		9,086
Total held-to-maturity securities	Total held-to-maturity securities	$	174,892	$	(240)		$	174,652	Total held-to-maturity securities	$	124,175	$	(1,174)	$	123,001


		June 30, 2021				June 30, 2022
		Amortized cost		Unrealized losses			Fair value			Amortized cost		Unrealized losses		Fair value
Due within one year or less:	Due within one year or less:								Due within one year or less:
Commercial paper		$	74,463	$	(28)		$	74,435
Corporate debt securities		77,785		(57)			77,728
Total due within one year or less		152,248		(85)			152,163
Due after one year through two years:
Corporate debt securities	Corporate debt securities	50,713		(90)			50,623		Corporate debt securities	$	49,952	$	(546)	$	49,406
Total held-to-maturity securities	Total held-to-maturity securities	$	202,961	$	(175)		$	202,786	Total held-to-maturity securities	$	49,952	$	(546)	$	49,406

Other Income, ~~(Expense),~~ Net

The following table summarizes the components of other income, ~~(expense),~~ net:

Three Months Ended December 31, Six Months Ended December 31,
2021 2020 2021 2020
Gains (losses) on derivatives not designated as hedging instruments (1) $ 6,481 $ (19,020) $ 19,808 $ (32,515)
Currency-related gains, net (2)(3) 5,551 1,809 5,874 5,884
Other gains 807 13 327 679
Total other income (expense), net $ 12,839 $ (17,198) $ 26,009 $ (25,952)


	Three Months Ended September 30,
	2022		2021
Gains on derivatives not designated as hedging instruments (1)	$	28,645	$	13,327
Currency-related (losses) gains, net (2)	(197)		323
Other losses	(1,051)		(480)
Total other income, net	$	27,397	$	13,170

_____________________

(1) ~~Primarily relates to both~~Includes realized and unrealized gains and losses on derivative currency forward and option contracts not designated as hedging instruments,as well as the ineffective portion of certain interest rate swap contracts that ~~have been~~were de-designated from hedge accounting ~~due~~in the prior period. For contracts not designated as hedging instruments, we realized gains of $14,621 and losses of $3,672 for the three months ended September 30, 2022 and 2021, respectively. Refer to ~~their ineffectiveness.~~Note 4 for additional details relating to our derivative contracts.

(2) ~~We have~~Currency-related (losses) gains, net primarily relates to significant non-functional currency intercompany financing relationships that we may change at times and are subject to currency exchange rate volatility. ~~The currency-related gains, net are primarily driven by this intercompany activity for the periods presented.~~ In addition, we have ~~certain~~a cross-currency ~~swaps~~swap designated as a cash flow ~~hedges~~hedge which ~~hedge~~hedges the remeasurement of ~~certain~~an intercompany loans; both are presented in the same component above. Unrealized gains related to cross-currency swaps were $3,067 and $6,356 during the three and six months ended December 31, 2021, respectively, while there were unrealized losses of $6,085 and $11,522 during the three and six months ended December 31, 2020, respectively.

(3) During the second quarter of fiscal year 2022, we identified an immaterial error and revised our previously reported results to reduce the gains presented above by $9,027 for the six months ended December 31, 2021.loan. Refer to ~~the "Revision of Prior Period Financial Statements" section above~~Note 4 for additional ~~details.~~details relating to this cash flow hedge.

Net ~~Income~~Loss Per Share Attributable to Cimpress plc

Basic net ~~income~~loss per share attributable to Cimpress plc is computed by dividing net ~~income~~loss attributable to Cimpress plc by the weighted-average number of ordinary shares outstanding for the respective period. Diluted net ~~income~~loss per share attributable to Cimpress plc gives effect to all potentially dilutive securities, including share options, restricted share units (“RSUs”), warrants, and performance share units ("PSUs"), if the effect of the securities is dilutive using the treasury stock method. Awards with performance or market conditions are included using the treasury stock method only if the conditions would have been met as of the end of the reporting period and their effect is dilutive.

The following table sets forth the reconciliation of the weighted-average number of ordinary shares:

Three Months Ended December 31, Six Months Ended December 31,
2021 2020 2021 2020
Weighted average shares outstanding, basic 26,096,786 26,003,649 26,084,518 25,974,823
Weighted average shares issuable upon exercise/vesting of outstanding share options/RSUs/warrants (1) 305,917 380,811 408,740 415,450
Shares used in computing diluted net income per share attributable to Cimpress plc 26,402,703 26,384,460 26,493,258 26,390,273
Weighted average anti-dilutive shares excluded from diluted net income per share attributable to Cimpress plc 567,220 3,129 292,834 1,565


	Three Months Ended September 30,
	2022	2021
Weighted average shares outstanding, basic and diluted	26,178,818	26,072,249


Weighted average anti-dilutive shares excluded from diluted net loss per share attributable to Cimpress plc (1)(2)	2,688,813	530,011

___________________

(1) In the periods in which a net loss is recognized, the impact of share options, RSUs and warrants is not included as they are anti-dilutive.

~~(1)~~(2) On May 1, 2020, we entered into a financing arrangement with Apollo Global Management, Inc., which included 7-year warrants with a strike price of $60 that have a potentially dilutive impact on our weighted average shares outstanding. For the three ~~and six~~ months ended ~~December 31,~~September 30, 2022 and 2021, the weighted average ~~dilutive~~anti-dilutive effect of the warrants ~~was 281,884~~were 1,055,377 and ~~345,722~~409,561 shares, ~~respectively, as compared to 318,191 and 317,224 shares for the three and six months ended December 31, 2020,~~ respectively.

Recently Issued or Adopted Accounting Pronouncements

Adopted Accounting Standards

In October 2021, the FASB issued Accounting Standards Update No. 2021-08 "Business Combinations (Topic 805) — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" (ASU 2021-08), which provides authoritative guidance for the accounting of acquired contract assets and liabilities when an acquired company has applied ASC 606 - Revenue from Contracts with Customers. We early adopted the standard in the current quarter, which allowed us to record the deferred revenue contract liability as it relates to our acquisition of Depositphotos at carrying value. Refer to Note 7 for additional information relating to our Depositphotos acquisition
. ~~The impact of this adoption did not have a material effect on our consolidated financial statements.~~

In July 2021, the FASB issued Accounting Standards Update No. 2021-08 "Leases (Topic 842): Lessors – Certain Leases with Variable Lease Payments. We early adopted the standard in the current quarter, which provides the option for lessors to classify direct-financing or sales-type leases as operating leases if a loss would have been incurred at lease commencement when considering non-indexed variable lease payments in the classification test. We sublease a small number of equipment assets which are classified as direct-financing leases; the variable lease payments associated with these leases would not have created a loss on day one. Therefore, the impact of this adoption had no effect on our consolidated financial statements.

~~Issued Accounting Standards to be Adopted~~

In May 2021, the FASB issued Accounting Standards Update No. 2021-04 "Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)" (ASU 2021-04), which provides authoritative guidance for the accounting treatment of ~~modifications or exchanges of~~contracts in an entity's own equity when calculating earnings per share. We adopted the standard on July 1, 2022. We recognize freestanding equity-classified ~~written call options (for example, warrants) that remain equity classified after modification or exchange.~~warrants on our consolidated balance sheet and as the standard is applied prospectively, there was no impact on our consolidated financial statements in the current period.

Issued Accounting Standards to be Adopted

In September 2022, the FASB issued Accounting Standards Update No. 2022-04 "Liabilities - Supplier Finance Programs (Subtopic 405-50)" (ASU 2022-04), which provides authoritative guidance for expanded disclosure requirements for supply chain finance programs. The standard is effective for us on July 1, ~~2022,~~2023, and early adoption is permitted. ~~We are assessing the impact on our consolidated financial statements.~~Cimpress businesses have an active supply chain finance program which will require additional disclosure after adoption of this standard.

3. Fair Value Measurements

We use a three-level valuation hierarchy for measuring fair value and include detailed financial statement disclosures about fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

•Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•Level 2: Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

•Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following tables summarize our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:


	September 30, 2022
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Interest rate swap contracts	$	28,209	$	—	$	28,209	$	—
Cross-currency swap contracts	3,448		—		3,448		—
Currency forward contracts	26,995		—		26,995		—
Currency option contracts	19,173		—		19,173		—
Total assets recorded at fair value	$	77,825	$	—	$	77,825	$	—

Liabilities


Currency forward contracts	$	(1,409)	$	—	$	(1,409)	$	—

Total liabilities recorded at fair value	$	(1,409)	$	—	$	(1,409)	$	—


		December 31, 2021									June 30, 2022
		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets	Assets									Assets
Interest rate swap contracts										Interest rate swap contracts	$	14,336	$	—	$	14,336	$	—

Cross-currency swap contracts		$	1,858	$	—	$	1,858	$	—
Currency forward contracts	Currency forward contracts	11,688		—		11,688		—		Currency forward contracts	20,638		—		20,638		—
Currency option contracts	Currency option contracts	3,100		—		3,100		—		Currency option contracts	10,611		—		10,611		—
Total assets recorded at fair value	Total assets recorded at fair value	$	16,646	$	—	$	16,646	$	—	Total assets recorded at fair value	$	45,585	$	—	$	45,585	$	—

Liabilities	Liabilities									Liabilities
Interest rate swap contracts		$	(16,541)	$	—	$	(16,541)	$	—

Cross-currency swap contracts	Cross-currency swap contracts	(5,246)		—		(5,246)		—		Cross-currency swap contracts	$	(446)	$	—	$	(446)	$	—
Currency forward contracts	Currency forward contracts	(3,343)		—		(3,343)		—		Currency forward contracts	(505)		—		(505)		—
Currency option contracts	Currency option contracts	(1,181)		—		(1,181)		—		Currency option contracts	(9)		—		(9)		—
Total liabilities recorded at fair value	Total liabilities recorded at fair value	$	(26,311)	$	—	$	(26,311)	$	—	Total liabilities recorded at fair value	$	(960)	$	—	$	(960)	$	—

June 30, 2021
Total Quoted Prices in
Active
Markets for
Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Assets
Currency forward contracts $ 1,679 $ — $ 1,679 $ —
Total assets recorded at fair value $ 1,679 $ — $ 1,679 $ —
Liabilities
Interest rate swap contracts $ (25,193) $ — $ (25,193) $ —
Cross-currency swap contracts (9,914) — (9,914) —
Currency forward contracts (19,651) — (19,651) —
Currency option contracts (3,080) — (3,080) —
Total liabilities recorded at fair value $ (57,838) $ — $ (57,838) $ —

During the ~~six~~three months ended ~~December 31, 2021~~September 30, 2022 and year ended June 30, ~~2021,~~2022, there were no significant transfers in or out of Level 1, Level 2 and Level 3 classifications.

The valuations of the derivatives intended to mitigate our interest rate and currency risk are determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument. This analysis utilizes observable market-based inputs, including interest rate curves, interest rate volatility, or spot and forward exchange rates, and reflects the contractual terms of these instruments, including the period to maturity. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparties' nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements.

Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to appropriately reflect both our own nonperformance risk and the respective counterparties' nonperformance risk in the fair value measurement. However, as of ~~December 31, 2021,~~September 30, 2022, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall

valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 in the fair value hierarchy.

As of ~~December 31, 2021~~September 30, 2022 and June 30, ~~2021,~~2022, the carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximated their estimated fair values. As of ~~December 31, 2021~~September 30, 2022 and June 30, ~~2021,~~2022, the carrying value of our debt, excluding debt issuance costs and debt premiums and discounts, was $~~1,739,427~~1,682,977 and ~~$1,764,856,~~$1,705,365, respectively, and the fair value was ~~$1,791,255~~$1,511,108 and ~~$1,767,209,~~$1,600,627, respectively. Our debt at ~~December 31, 2021~~September 30, 2022 includes variable-rate debt instruments indexed to LIBOR that resets periodically, as well as fixed-rate debt instruments. The estimated fair value of our debt was determined using available market information based on recent trades or activity of debt instruments with substantially similar risks, terms and maturities, which fall within Level 2 under the fair value hierarchy.

As of ~~December 31, 2021~~September 30, 2022 and June 30, ~~2021~~2022 our held-to-maturity marketable securities were held at an amortized cost of ~~$174,892~~$124,175 and ~~$202,961,~~$49,952, respectively, while the fair value was ~~$174,652~~$123,001 and $~~202,786,~~49,406, respectively. The securities were valued using quoted prices for identical assets in active markets, which fall into Level 1 under the fair value hierarchy.

The estimated fair value of assets and liabilities disclosed above may not be representative of actual values that could have been or will be realized in the future.

4. Derivative Financial Instruments

We use derivative financial instruments, such as interest rate swap contracts, cross-currency swap contracts, and currency forward and option contracts, to manage interest rate and foreign currency exposures. Derivatives are recorded in the consolidated balance sheets at fair value. If ~~the~~a derivative is designated as a cash flow hedge or net investment hedge, then the change in the fair value of the derivative is recorded in accumulated other comprehensive loss and subsequently reclassified into earnings in the period the hedged forecasted transaction affects earnings. We have designated one intercompany loan as a net investment hedge, and any unrealized currency gains and losses on the loan are recorded in accumulated other comprehensive loss. Additionally, any ineffectiveness associated with an effective and designated hedge is recognized within accumulated other comprehensive loss.

The change in the fair value of derivatives not designated as hedges is recognized directly in earnings as a component of other income, ~~(expense),~~ net.

Hedges of Interest Rate Risk

We enter into interest rate swap contracts to manage variability in the amount of our known or expected cash payments related to a portion of our debt. Our objective in using interest rate swaps is to add stability to interest expense and to manage our exposure to interest rate movements. We designate our interest rate swaps as cash flow hedges. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the contract agreements without exchange of the underlying notional amount. Realized gains or losses from interest rate swaps are recorded in earnings as a component of interest expense, net.

Amounts reported in accumulated other comprehensive loss related to interest rate swap contracts will be reclassified to interest expense, net as interest payments are accrued or made on our variable-rate debt.

As of ~~December 31, 2021,~~September 30, 2022, we estimate that ~~$8,027~~$6,490 will be reclassified from accumulated other comprehensive loss to interest expense, net during the twelve months ending ~~December 31, 2022.~~September 30, 2023. As of ~~December 31, 2021,~~September 30, 2022, we had 15fourteen effective outstanding interest rate swap contracts indexed to USD ~~LIBOR, sixof which were not highly effective and therefore not designated for hedge accounting.~~LIBOR. These hedges have varying start ~~dates~~ and maturity dates through April 2028.


Interest rate swap contracts outstanding:	Notional Amounts
Contracts accruing interest as of ~~December 31, 2021~~September 30, 2022	$	~~500,000~~400,000
Contracts with a future start date	430,000
Total	$	~~930,000~~830,000

1411

Hedges of Currency Risk

Cross-Currency Swap Contracts

From time to time, we execute cross-currency swap contracts designated as cash flow hedges or net investment hedges. Cross-currency swaps involve an initial receipt of the notional amount in the hedge currency in exchange for our reporting currency based on a contracted exchange rate. Subsequently, we receive fixed rate payments in our reporting currency in exchange for fixed rate payments in the hedged currency over the life of the contract. At maturity, the final exchange involves the receipt of our reporting currency in exchange for the notional amount in the hedged currency.

Cross-currency swap contracts designated as cash flow hedges are executed to mitigate our currency exposure to the interest receipts as well as the principal remeasurement and repayment associated with certain intercompany loans denominated in a currency other than our reporting currency, the U.S. dollar. As of ~~December 31, 2021,~~September 30, 2022, we had 2one outstanding cross-currency swap ~~contracts~~contract designated as a cash flow ~~hedges~~hedge with a total notional amount of ~~$120,874,~~$58,478, ~~both~~ maturing during June 2024. We entered into the ~~two~~ cross-currency swap ~~contracts~~contract to hedge the risk of changes in one Euro-denominated intercompany loan entered into with one of our consolidated subsidiaries that has the Euro as its functional currency.

Amounts reported in accumulated other comprehensive loss will be reclassified to other income, ~~(expense),~~ net as interest payments are accrued or paid and upon remeasuring the intercompany loan. As of ~~December 31, 2021,~~September 30, 2022, we estimate that $~~2,735~~2,132 of income will be reclassified from accumulated other comprehensive loss to interest expense, net during the twelve months ending ~~December 31, 2022.~~September 30, 2023.

Other Currency ~~Contracts~~Hedges

We execute currency forward and option contracts in order to mitigate our exposure to fluctuations in various currencies against our reporting currency, the U.S. dollar.

~~As of December 31, 2021, we had 4 currency forward~~ These contracts or intercompany loans may be designated as ~~net investment~~ hedges ~~with a total notional amount of $122,041, maturing during various dates through October 2026. We entered into these contracts~~ to ~~hedge~~mitigate the risk of changes in the U.S. dollar equivalent value of a portion of our net investment in ~~two~~ consolidated subsidiaries that have the Euro as their functional currency. Amounts reported in accumulated other comprehensive loss are recognized as a component of our cumulative translation adjustment.

In April 2022 we early terminated all of our currency forward contracts designated as net investment hedges, and as of September 30, 2022 we had no currency forward contracts designated as net investment hedges. We have one intercompany loan designated as a net investment hedge with a total notional amount of $364,524 that matures in May 2028.

We have elected to not apply hedge accounting for all other currency forward and option contracts. During the three ~~and six~~ months ended ~~December 31,~~September 30, 2022 and 2021, ~~and 2020,~~ we experienced volatility within other income, ~~(expense),~~ net, in our consolidated statements of operations from unrealized gains and losses on the mark-to-market of outstanding currency forward and option contracts. We expect this volatility to continue in future periods for contracts for which we do not apply hedge accounting. Additionally, since our hedging objectives may be targeted at non-GAAP financial metrics that exclude non-cash items such as depreciation and amortization, we may experience increased, not decreased, volatility in our GAAP results as a result of our currency hedging program.

As of ~~December 31, 2021,~~September 30, 2022, we had the following outstanding currency derivative contracts that were not designated for hedge accounting and were used to hedge fluctuations in the U.S. dollar value of forecasted transactions or balances denominated in Australian Dollar, British Pound, Canadian Dollar, Danish Krone, Euro, Indian Rupee, Japanese Yen, Mexican Peso, New Zealand Dollar, Norwegian Krone, Philippine Peso, Swiss Franc and Swedish Krona:

Notional Amount

Effective Date

Maturity Date

Number of Instruments

Index

Notional Amount

Effective Date

Maturity Date

Number of Instruments

Index

$428,387

March 2020 through December 2021

Various dates through October 2024

683

Various

$675,605

December 2020 through September 2022

Various dates through September 2024

559

Various

Financial Instrument Presentation

The table below presents the fair value of our derivative financial instruments as well as their classification on the balance sheet as of ~~December 31, 2021~~September 30, 2022 and June 30, ~~2021.~~2022. Our derivative asset and liability balances fluctuate with interest rate and currency exchange rate volatility.


	September 30, 2022
	Asset Derivatives							Liability Derivatives
	Balance Sheet line item	Gross amounts of recognized assets		Gross amount offset in Consolidated Balance Sheet		Net amount		Balance Sheet line item	Gross amounts of recognized liabilities		Gross amount offset in Consolidated Balance Sheet		Net amount
Derivatives designated as hedging instruments
Derivatives in cash flow hedging relationships
Interest rate swaps	Other assets	$	28,209	$	—	$	28,209	Other current liabilities / other liabilities	$	—	$	—	$	—
Cross-currency swaps	Other assets	3,448		—		3,448		Other liabilities	—		—		—



Total derivatives designated as hedging instruments		$	31,657	$	—	$	31,657		$	—	$	—	$	—

Derivatives not designated as hedging instruments


Currency forward contracts	Other current assets / other assets	$	35,378	$	(8,383)	$	26,995	Other current liabilities / other liabilities	$	(1,435)	$	26	$	(1,409)
Currency option contracts	Other current assets / other assets	19,173		—		19,173		Other liabilities	—		—		—
Total derivatives not designated as hedging instruments		$	54,551	$	(8,383)	$	46,168		$	(1,435)	$	26	$	(1,409)

December 31, 2021
Asset Derivatives Liability Derivatives
Balance Sheet line item Gross amounts of recognized assets Gross amount offset in Consolidated Balance Sheet Net amount Balance Sheet line item Gross amounts of recognized liabilities Gross amount offset in Consolidated Balance Sheet Net amount
Derivatives designated as hedging instruments
Derivatives in cash flow hedging relationships
Interest rate swaps Other assets $ — $ — $ — Other current liabilities / other liabilities $ (11,574) $ — $ (11,574)
Cross-currency swaps Other assets 1,858 — 1,858 Other liabilities (5,246) — (5,246)
Derivatives in net investment hedging relationships
Currency forward contracts Other current assets / other assets — — — Other current liabilities / other liabilities (3,654) 569 (3,084)
Total derivatives designated as hedging instruments $ 1,858 $ — $ 1,858 $ (20,474) $ 569 $ (19,904)
Derivatives not designated as hedging instruments
Interest rate swaps Other assets $ — $ — $ — Other liabilities $ (5,156) $ 189 $ (4,967)
Currency forward contracts Other current assets / other assets 13,581 (1,893) 11,688 Other current liabilities / other liabilities (1,126) 867 (259)
Currency option contracts Other current assets / other assets 3,280 (180) 3,100 Other liabilities (1,264) 83 (1,181)
Total derivatives not designated as hedging instruments $ 16,861 $ (2,073) $ 14,788 $ (7,546) $ 1,139 $ (6,407)


	June 30, 2022
	Asset Derivatives							Liability Derivatives
	Balance Sheet line item	Gross amounts of recognized assets		Gross amount offset in Consolidated Balance Sheet		Net amount		Balance Sheet line item	Gross amounts of recognized liabilities		Gross amount offset in Consolidated Balance Sheet		Net amount
Derivatives designated as hedging instruments
Derivatives in cash flow hedging relationships
Interest rate swaps	Other current assets / other assets	$	14,336	$	—	$	14,336	Other current liabilities / other liabilities	$	—	$	—	$	—
Cross-currency swaps	Other assets	—		—		—		Other liabilities	(446)		—		$	(446)



Total derivatives designated as hedging instruments		$	14,336	$	—	$	14,336		$	(446)	$	—	$	(446)

Derivatives not designated as hedging instruments


Currency forward contracts	Other current assets / other assets	$	24,440	$	(3,802)	$	20,638	Other current liabilities / other liabilities	$	(505)	$	—	$	(505)
Currency option contracts	Other current assets / other assets	10,612		(1)		10,611		Other current liabilities / other liabilities	(9)		—		(9)
Total derivatives not designated as hedging instruments		$	35,052	$	(3,803)	$	31,249		$	(514)	$	—	$	(514)

June 30, 2021
Asset Derivatives Liability Derivatives
Balance Sheet line item Gross amounts of recognized assets Gross amount offset in Consolidated Balance Sheet Net amount Balance Sheet line item Gross amounts of recognized liabilities Gross amount offset in Consolidated Balance Sheet Net amount
Derivatives designated as hedging instruments
Derivatives in cash flow hedging relationships
Interest rate swaps Other current assets / other assets $ — $ — $ — Other current liabilities / other liabilities $ (23,527) $ 176 $ (23,351)
Cross-currency swaps Other assets — — — Other liabilities (9,914) — (9,914)
Derivatives in Net Investment Hedging Relationships
Currency forward contracts Other assets — — — Other current liabilities / other liabilities (11,379) — (11,379)
Total derivatives designated as hedging instruments $ — $ — $ — $ (44,820) $ 176 $ (44,644)
Derivatives not designated as hedging instruments
Interest rate swaps Other assets $ — $ — $ — Other liabilities $ (1,842) $ — $ (1,842)
Currency forward contracts Other current assets / other assets 1,796 (117) 1,679 Other current liabilities / other liabilities (11,510) 3,238 (8,272)
Currency option contracts Other current assets / other assets — — — Other current liabilities / other liabilities (3,315) 235 (3,080)
Total derivatives not designated as hedging instruments $ 1,796 $ (117) $ 1,679 $ (16,667) $ 3,473 $ (13,194)

1714

The following table presents the effect of our derivative financial instruments designated as hedging instruments and their classification within comprehensive ~~income (loss)~~loss for the three ~~and six~~ months ended ~~December 31, 2021~~September 30, 2022 and ~~2020~~:2021:


			Amount of Net Gain (Loss) on Derivatives Recognized in Comprehensive Income
		Three Months Ended December 31,			Six Months Ended December 31,				Three Months Ended September 30,
			2021		2020		2021			2020			2022		2021
Derivatives in cash flow hedging relationships	Derivatives in cash flow hedging relationships											Derivatives in cash flow hedging relationships
Interest rate swaps	Interest rate swaps		$	5,021	$	731	$	5,540		$	1,142	Interest rate swaps	$	12,954	$	519
Cross-currency swaps	Cross-currency swaps		(7,519)		3,071		(9,963)			6,496		Cross-currency swaps	3,806		(2,444)
Derivatives in net investment hedging relationships	Derivatives in net investment hedging relationships											Derivatives in net investment hedging relationships

Intercompany loan												Intercompany loan	12,951		9,027
Currency forward contracts	Currency forward contracts		2,922		(7,294)		6,414			(24,832)		Currency forward contracts	—		3,492
Total	Total		$	424	$	(3,492)	$	1,991		$	(17,194)	Total	$	29,711	$	10,594

The following table presents reclassifications out of accumulated other comprehensive loss for the three ~~and six~~ months ended ~~December 31, 2021~~September 30, 2022 and ~~2020:~~2021:


		Amount of Net Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income								Affected line item in the Statement of Operations	Amount of Net Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income					Affected line item in the Statement of Operations
		Three Months Ended December 31,				Six Months Ended December 31,					Three Months Ended September 30,
		2021		2020		2021		2020						2022			2021
Derivatives in cash flow hedging relationships	Derivatives in cash flow hedging relationships												Derivatives in cash flow hedging relationships
Interest rate swaps	Interest rate swaps	$	2,973	$	2,001	$	5,470	$	4,623			Interest expense, net	Interest rate swaps	$	397		$	2,497	Interest expense, net
Cross-currency swaps	Cross-currency swaps	3,821		(5,525)		7,808		(10,292)				Other income (expense), net	Cross-currency swaps	(3,742)			3,987		Other income, net
Total before income tax	Total before income tax	6,794		(3,524)		13,278		(5,669)				Income before income taxes	Total before income tax	(3,345)			6,484		(Loss) income before income taxes
Income tax	Income tax	974		298		36		372				Income tax expense	Income tax	407			(938)		Income tax expense
Total	Total	$	7,768	$	(3,226)	$	13,314	$	(5,297)				Total	$	(2,938)		$	5,546

The following table presents the adjustment to fair value recorded within the consolidated statements of operations for the three ~~and six~~ months ended ~~December 31,~~September 30, 2022 and 2021 ~~and 2020~~ for derivative instruments for which we did not elect hedge accounting and de-designated derivative financial instruments that ~~no longer~~did not qualify as hedging instruments.


		Amount of Gain (Loss) Recognized in Net Income									Affected line item in the Statement of Operations						Affected line item in the Statement of Operations
			Three Months Ended December 31,				Six Months Ended December 31,					Three Months Ended September 30,
			2021		2020		2021		2020						2022			2021
Currency contracts	Currency contracts		$	7,161	$	(19,496)	$	20,024	$	(32,964)			Other income (expense), net	Currency contracts	$	28,645		$	12,863	Other income, net
Interest rate swaps	Interest rate swaps		(680)		476		(216)		449				Other income (expense), net	Interest rate swaps	—			464		Other income, net
Total	Total		$	6,481	$	(19,020)	$	19,808	$	(32,515)				Total	$	28,645		$	13,327

1815

5. Accumulated Other Comprehensive Loss

The following table presents a roll forward of amounts recognized in accumulated other comprehensive loss by component, net of tax of $~~1,189,~~5,506 for the ~~six~~three months ended ~~December 31, 2021~~September 30, 2022:

(Losses) gains on cash flow hedges (1) (Losses) gains on pension benefit obligation Translation adjustments, net of hedges (2) Total
Balance as of June 30, 2021 $ (23,831) $ (1,735) $ (45,916) $ (71,482)
Other comprehensive income (loss) before reclassifications (3) (4,423) 444 4,820 841
Amounts reclassified from accumulated other comprehensive loss to net income 13,314 — — 13,314
Net current period other comprehensive income (loss) 8,891 444 4,820 14,155
Balance as of December 31, 2021 $ (14,940) $ (1,291) $ (41,096) $ (57,327)


	Gains on cash flow hedges (1)		Losses on pension benefit obligation		Translation adjustments, net of hedges (2)		Total
Balance as of June 30, 2022	$	5,179	$	(86)	$	(52,221)	$	(47,128)
Other comprehensive income (loss) before reclassifications	16,760		—		(6,835)		9,925
Amounts reclassified from accumulated other comprehensive loss to net loss	(2,938)		—		—		(2,938)
Net current period other comprehensive income (loss)	13,822		—		(6,835)		6,987
Balance as of September 30, 2022	$	19,001	$	(86)	$	(59,056)	$	(40,141)

________________________

(1) ~~(Losses) gains~~Gains on cash flow hedges include our interest rate swap and cross-currency swap contracts designated in cash flow hedging relationships.

(2) As of ~~December 31, 2021~~September 30, 2022 and June 30, ~~2021,~~2022, the translation adjustment is inclusive of both the unrealized and realized effects of our net investment ~~hedges,~~hedges. Gains on currency forward and swap contracts, net of ~~which unrealized~~tax, of $15,079 have been included in accumulated other comprehensive loss as of September 30, 2022 and June 30, 2022. Intercompany loan hedge gains of ~~$7,871~~$76,073 and ~~$1,457, respectively,~~$56,743, net of tax, have been included in accumulated other comprehensive ~~loss.~~loss as of September 30, 2022 and June 30, 2022, respectively.

(3) During the second quarter of fiscal year 2022, we identified an immaterial error and revised our previously reported results to increase the translation adjustments, net of hedges presented above by $9,027 for the six months ended December 31, 2021. Refer to Note 2 for additional details.

6. Goodwill

The carrying amount of goodwill by reportable segment as of ~~December 31, 2021~~September 30, 2022 and June 30, ~~2021~~2022 was as follows:
Vista PrintBrothers The Print Group All Other Businesses Total
Balance as of June 30, 2021 $ 225,147 $ 137,307 $ 164,220 $ 200,305 $ 726,979
Acquisitions (1) 72,942 — — — 72,942
Adjustments (2) (821) — — — (821)
Effect of currency translation adjustments (3) (1,286) (6,497) (7,982) (175) (15,940)
Balance as of December 31, 2021 $ 295,982 $ 130,810 $ 156,238 $ 200,130 $ 783,159


	Vista		PrintBrothers		The Print Group		All Other Businesses		Total
Balance as of June 30, 2022	$	291,498	$	130,828	$	143,969	$	200,305	$	766,600



Adjustments	—		—		—		225		225


Effect of currency translation adjustments (1)	(2,836)		(7,430)		(8,504)		—		(18,770)
Balance as of September 30, 2022	$	288,662	$	123,398	$	135,465	$	200,530	$	748,055

________________________

(1) ~~On October 1, 2021, we acquired Depositphotos Inc., which is included in our Vista reportable segment. Refer to Note 7 for additional details.~~

~~(2) We recognized an immaterial balance sheet adjustment related to our 99design acquisition during the six months ended December 31, 2021, which was offset against goodwill.~~

~~(3)~~ Related to goodwill held by subsidiaries whose functional currency is not the U.S. dollar.

~~7. Business Combinations~~

~~Acquisition of Depositphotos Inc.~~

On October 1, 2021, we acquired Depositphotos Inc. and its subsidiaries ("Depositphotos"), a global creative platform for digital design. We acquired all outstanding shares of the company for a purchase price of $84,900, which includes a post-closing adjustment based on acquired cash, debt, and working capital as of the closing date. We paid $76,119 in cash at closing, and the remaining purchase consideration, including the post-closing adjustment but net of any indemnifiable losses recoverable against the deferred amount, will be paid in two separate deferred payments. The first, and smaller, payment will be made in January 2022 and the second, and majority, of the deferred payment is due in October 2022.

The acquisition is managed within our Vista business and includes VistaCreate (formerly Crello), a rapidly growing leader in do-it-yourself (DIY) digital design. The acquisition also includes their separately branded Depositphotos business, a platform for creators that includes images, videos and music that are developed by a large group of content contributors. We expect synergies to provide significant benefits to our Vista business as this represents another integral step toward providing a compelling, full-spectrum design offering to our customers, and also provides another vehicle for the acquisition of new customers, to whom we plan to cross-sell our other products and services.

1916

~~The table below details the consideration transferred to acquire Depositphotos:~~


~~Cash consideration (paid at closing)~~	$	~~76,119~~
~~Deferred payment~~	~~8,781~~

~~Total purchase price~~	$	~~84,900~~

We recognized the assets and liabilities on the basis of their fair values at the date of the acquisition with any excess of the purchase price paid over the fair value of the net assets recorded as goodwill, which is primarily attributable to the synergies that we expect to achieve through the acquisition. The goodwill balance has been attributed to the Vista reporting unit and none of the goodwill balance is deductible for tax purposes. Additionally, we identified and valued Depositphotos intangible assets, which include their trade name, customer relationships,

~~owned content and developed technology.~~

Our preliminary estimate of the fair value of specifically identifiable assets acquired and liabilities assumed as of the date of acquisition is subject to change upon finalizing our valuation analysis, including certain valuation assumptions and tax matters. The final determination may result in changes in the fair value of certain assets and liabilities as compared to our preliminary estimates, which are expected to be finalized prior to the end of fiscal year 2022.

~~The fair value of the assets acquired and liabilities assumed was:~~

~~Amount~~

~~Weighted Average Useful Life in Years~~

~~Tangible assets acquired and liabilities assumed:~~

~~Cash and cash equivalents~~

~~7,173~~

~~n/a~~

~~Accounts receivable, net~~

~~329~~

~~n/a~~

~~Prepaid expenses and other current assets~~

~~448~~

~~n/a~~

~~Property, plant and equipment, net~~

~~611~~

~~n/a~~

~~Operating lease assets, net~~

~~383~~

~~n/a~~

~~Other assets~~

~~324~~

~~n/a~~

~~Accounts payable~~

~~(843)~~

~~n/a~~

~~Accrued expenses~~

~~(5,009)~~

~~n/a~~

~~Deferred revenue~~

~~(10,999)~~

~~n/a~~

~~Operating lease liabilities, current~~

~~(152)~~

~~n/a~~

~~Deferred tax liabilities~~

~~(4,176)~~

~~n/a~~

~~Operating lease liabilities, non-current~~

~~(231)~~

~~n/a~~

~~Identifiable intangible assets:~~

~~Customer relationships~~

~~11,600~~

~~4 years~~

~~Trade name~~

~~2,500~~

~~10 years~~

~~Developed technology~~

~~2,300~~

~~2 years~~

~~Owned content~~

~~7,700~~

~~10 years~~

~~Goodwill~~

~~72,942~~

~~n/a~~

~~Total purchase price~~

~~84,900~~

~~n/a~~

Depositphotos has been included in our consolidated financial statements starting on its acquisition date. The revenue and earnings of Depositphotos included in our consolidated financial statements for the three and six months ended December 31, 2021 are not material, and therefore no proforma financial information is presented. We used our cash on hand to fund the acquisition. In connection with the acquisition, we incurred $387 and $887in general and administrative expenses, as part of our central and corporate costs during the three and six months ended December 31, 2021, respectively, primarily related to legal, financial, and other professional services.

8.7. Other Balance Sheet Components

Accrued expenses included the following:

December 31, 2021 June 30, 2021
Compensation costs $ 67,558 $ 73,861
Income and indirect taxes (1) 58,186 46,074
Advertising costs 33,701 35,093
Shipping costs (1) 10,294 9,401
Production costs (1) 8,160 6,881
Sales returns (1) 6,840 5,636
Purchases of property, plant and equipment 3,333 1,110
Professional fees 2,837 4,210
Interest payable 2,495 2,399
Other 67,526 62,848
Total accrued expenses $ 260,930 $ 247,513

~~________________________~~


	September 30, 2022		June 30, 2022
Compensation costs	$	69,156	$	78,521
Income and indirect taxes	45,696		41,886
Advertising costs	26,534		25,925
Shipping costs	12,200		10,228
Third party manufacturing and digital content costs	16,290		15,790
Variable compensation incentives (1)	7,978		—
Sales returns	6,793		6,286
Purchases of property, plant and equipment	1,445		642
Professional fees	3,712		2,394
Interest payable (2)	13,076		2,477
Other	63,316		69,692
Total accrued expenses	$	266,196	$	253,841

______________________

(1) Includes cash-based employee bonus incentives, which are variable based on the performance of individual businesses and vest over four years.

(2) The increase in ~~income and indirect taxes, shipping and production costs, and sales returns~~interest payable as of September 30, 2022, is due to ~~increased sales volumes during~~the interest on our ~~peak holiday season in the second quarter~~2026 Notes being payable semi-annually on June 15 and December 15 of ~~our fiscal~~each year. Refer to Note 8 for further detail.

Other current liabilities included the following:

December 31, 2021 June 30, 2021
Current portion of finance lease obligations (1) $ 7,556 $ 32,314
Short-term derivative liabilities 6,674 20,530
Other (2) 61,369 50,671
Total other current liabilities $ 75,599 $ 103,515


	September 30, 2022		June 30, 2022
Current portion of finance lease obligations	$	6,452	$	6,684
Short-term derivative liabilities (1)	9,713		4,299


Other	16,896		17,052
Total other current liabilities	$	33,061	$	28,035

________________________

(1) The ~~decrease~~increase in ~~the current portion of our finance lease obligations~~short-term derivative liabilities is ~~primarily~~ due to ~~the exercise of a purchase option for a previously leased facility that decreased our finance lease liability by $23,534. We immediately sold this facility to a third party~~volatility in interest and ~~recognized a $3,324 gain on the sale of the asset during the three and six months ended December 31, 2021.~~foreign currency rates. Refer to Note 24 for additional details.

(2) Other current liabilities increased as $8,781 of the purchase price to acquire Depositphotos was deferred with payments due in January and October 2022. Refer to Note 7 for details. This also includes a deferred payment of $43,691 associated with our prior year acquisition of 99designs that is payable in February 2022.

Other liabilities included the following:


		December 31, 2021		June 30, 2021			September 30, 2022		June 30, 2022
Long-term finance lease obligations	Long-term finance lease obligations	$	16,649	$	18,528	Long-term finance lease obligations	$	14,669	$	14,699
Long-term derivative liabilities	Long-term derivative liabilities	23,420		41,074		Long-term derivative liabilities	104		463

Long-term compensation incentives (1)						Long-term compensation incentives (1)	14,583		19,934
Other	Other	38,453		36,808		Other	27,087		29,298
Total other liabilities	Total other liabilities	$	78,522	$	96,410	Total other liabilities	$	56,443	$	64,394

________________________

(1) Includes cash-based employee bonus incentives, which are variable based on the performance of each individual business and vest over four years.

2117

9.8. Debt


		December 31, 2021		June 30, 2021			September 30, 2022		June 30, 2022
7.0% Senior notes due 2026		$	600,000	$	600,000
7.0% Senior Notes due 2026						7.0% Senior Notes due 2026	$	600,000	$	600,000
Senior secured credit facility	Senior secured credit facility	1,128,999		1,152,021		Senior secured credit facility	1,076,279		1,097,302

Other	Other	10,428		12,835		Other	6,698		8,063
Debt issuance costs and debt premiums (discounts)	Debt issuance costs and debt premiums (discounts)	(21,158)		(22,450)		Debt issuance costs and debt premiums (discounts)	(18,548)		(19,417)
Total debt outstanding, net	Total debt outstanding, net	1,718,269		1,742,406		Total debt outstanding, net	1,664,429		1,685,948
Less: short-term debt (1)	Less: short-term debt (1)	11,217		9,895		Less: short-term debt (1)	9,900		10,386
Long-term debt	Long-term debt	$	1,707,052	$	1,732,511	Long-term debt	$	1,654,529	$	1,675,562

_____________________

(1) Balances as of ~~December 31, 2021~~September 30, 2022 and June 30, ~~2021~~2022 are inclusive of short-term debt issuance costs, debt premiums and discounts of $3,498 ~~and $3,435, respectively.~~for both periods presented.

Our various debt arrangements described below contain customary representations, warranties and events of default. As of ~~December 31, 2021,~~September 30, 2022, we were in compliance with all covenants in our debt contracts, including those under our amended and restated senior secured credit agreement ("Restated Credit Agreement") and the indenture governing our 2026 Notes (as defined below).

Senior Secured Credit Facility

On May 17, 2021, we entered into a Restated Credit Agreement consisting of the following:

•A senior secured Term Loan B with a maturity date of May 17, 2028 (the “Term Loan B”), consisting of:

◦a $795,000 tranche that bears interest at LIBOR (with a LIBOR floor of 0.50%) plus 3.50%, and

◦a €300,000 tranche that bears interest at EURIBOR (with a EURIBOR floor of 0%) plus 3.50%; and

•A $250,000 senior secured revolving credit facility with a maturity date of May 17, 2026 (the “Revolving Credit Facility”). Borrowings under the Revolving Credit Facility bear interest at LIBOR (with a LIBOR floor of 0%) plus 2.50% to 3.00% depending on the Company’s First Lien Leverage Ratio, a net leverage calculation, as defined in the Restated Credit Agreement.

The Restated Credit Agreement contains covenants that restrict or limit certain activities and transactions by Cimpress and our subsidiaries, including, but not limited to, the incurrence of additional indebtedness and liens; certain fundamental organizational changes; asset sales; certain intercompany activities; and certain investments and restricted payments, including purchases of Cimpress plc’s ordinary shares and payment of dividends. In addition, if any loans made under the Revolving Credit Facility are outstanding on the last day of any fiscal quarter, then we are subject to a financial maintenance covenant that the First Lien Leverage Ratio calculated as of the last day of such quarter does not exceed 3.25 to 1.00.

As of ~~December 31, 2021,~~September 30, 2022, we have borrowings under the Restated Credit Agreement of ~~$1,128,999~~$1,076,279 consisting of the Term Loan B, which amortizes over the loan period, with a final maturity date of May 17, 2028. We have no outstanding borrowings under our Revolving Credit Facility as of ~~December 31, 2021.~~September 30, 2022.

As of ~~December 31, 2021,~~September 30, 2022, the weighted-average interest rate on outstanding borrowings under the Restated Credit Agreement was ~~4.68%~~5.80%, inclusive of interest rate swap rates. We are also required to pay a commitment fee for our Revolving Credit Facility on unused balances of 0.35% to 0.45% depending on our First Lien Leverage Ratio. We have pledged the assets and/or share capital of a number of our subsidiaries as collateral for our debt as of ~~December 31, 2021.~~September 30, 2022.

Senior Unsecured Notes

We have issued $600,000 in aggregate principal of 7.0% Senior Notes due 2026 (the "2026 Notes"), which are unsecured. We can redeem some or all of the 2026 Notes at the redemption prices specified in the indenture that governs the 2026 Notes, plus accrued and unpaid interest to, but not including, the redemption date. As of ~~December 31, 2021,~~September 30, 2022, we have not redeemed any of the 2026 Notes.

2218

Other Debt

Other debt consists primarily of term loans acquired through our various acquisitions or used to fund certain capital investments. As of ~~December 31, 2021~~September 30, 2022 and June 30, ~~2021,~~2022, we had ~~$10,428~~$6,698 and ~~$12,835,~~$8,063, respectively, outstanding for those obligations that are payable through ~~January 2026.~~March 2027.

~~10.~~9. Income Taxes

Our income tax expense was ~~$17,298~~$9,365 and ~~$26,679~~$9,381 for the three ~~and six~~ months ended ~~December 31,~~September 30, 2022 and 2021, ~~respectively, as compared~~respectively. The decreased tax expense is due to ~~$12,954 and $19,748 for the three and six months ended December 31, 2020, respectively.~~decreased profits, offset by a higher forecasted effective tax rate. Excluding the effect of discrete tax adjustments, our estimated annual effective tax rate is higher for fiscal ~~2022~~2023 as compared to fiscal ~~2021~~2022 primarily due to ~~a less favorable mix of earnings.~~decreased forecasted profits. Our effective tax rate continues to be negatively impacted by losses in certain jurisdictions where we are unable to recognize a tax benefit in the current period.

As of ~~December 31, 2021~~September 30, 2022 we had unrecognized tax benefits of ~~$15,139,~~$14,468, including accrued interest and penalties of ~~$1,174.~~$1,500. We recognize interest and, if applicable, penalties related to unrecognized tax benefits in the provision for income taxes. If recognized, ~~$7,896~~$7,620 of unrecognized tax benefits would reduce our tax expense. It is reasonably possible that a reduction in unrecognized tax benefits may occur within the next twelve months in the range of ~~$300~~$360 to ~~$350~~$410 related to the lapse of applicable statutes of limitations. We believe we have appropriately provided for all tax uncertainties.

We conduct business in a number of tax jurisdictions and, as such, are required to file income tax returns in multiple jurisdictions globally. The years ~~2015~~2016 through ~~2021~~2022 remain open for examination by the U.S. Internal Revenue Service and the years 2015 through ~~2021~~2022 remain open for examination in the various states and non-U.S. tax jurisdictions in which we file tax returns. We believe that our income tax reserves are adequately maintained taking into consideration both the technical merits of our tax return positions and ongoing developments in our income tax audits. However, the final determination of our tax return positions, if audited, is uncertain, and there is a possibility that final resolution of these matters could have a material impact on our results of operations or cash flows.

We have not recorded a valuation allowance against deferred tax assets of $15,060 and $99,924 related to Swiss tax losses and the Swiss amortizable goodwill, respectively, as we expect to realize these assets in the future. Management believes there is sufficient positive evidence in the form of historical and future projected profitability to conclude that it is more likely than not that these benefits in Switzerland will be utilized against future taxable profits within the available carryforward periods. Our assessments are reliant on the attainment of our forecasted operating profits. Failure to achieve these forecasted operating profits may change our assessment of these deferred tax assets, and such change would result in additional valuation allowance and an increase in income tax expense to be recorded in the period of the change in assessment. We will continue to review our forecasts and profitability trends relevant to these Swiss deferred tax assets on a quarterly basis.

~~11.~~

10. Noncontrolling ~~Interest~~Interests

Redeemable Noncontrolling Interests

For some of our subsidiaries, we own a controlling equity stake, and a third party or key ~~member~~members of the ~~business'~~business management team owns a minority portion of the ~~equity.~~

~~Redeemable Noncontrolling Interests~~equity, which includes those described below. The put options for several of our noncontrolling interests are exercisable in fiscal year 2023. Exercising a put option is at the discretion of each noncontrolling interest holder, which creates uncertainty around the timing of our cash outflow should an option be exercised. As of September 30, 2022, the total estimated redemption value is$88,991for those noncontrolling interests with put option windows that are exercisable in fiscal year 2023, of which $4,726 has already been exercised in the second quarter of fiscal 2023. The remaining equity interests are exercisable through November 30, 2022.

PrintBrothers

Members of the PrintBrothers management team hold a minority equity ~~interest~~interests ranging from 11% to 12% in each of the three businesses within the segment. The put options associated with the redeemable noncontrolling ~~interest~~interests have annual exercise windows for 90% of their minority equity interest to Cimpress in each quarter ending in December. ~~The first~~For the exercise window ~~occurred~~occurring in the ~~current~~second quarter of fiscal 2023, the estimated redemption

value for the portion of the put options that could be exercised is $84,266 and ~~no options were exercised.~~ is based on actual results through June 30, 2022.If the put options are exercised, then Cimpress may redeem the remaining 10% of these holders' minority equity ~~interest~~interests concurrently with the put option exercise or on the first, second, or third anniversary of the put option exercise. Cimpress has call options for the full amount of the minority equity ~~interest~~interests with the first exercise window occurring during the second quarter of fiscal year 2027.

During the ~~six~~three months ended ~~December 31, 2021,~~September 30, 2022, the redemption value of a PrintBrothers business increased above ~~the~~its carrying value due to continued strong ~~financial performance during the first half of the current fiscal year as well as the lapping of a period where performance was more severely impacted by the pandemic.~~performance. The increased redemption value resulted in an adjustment to ~~the~~ redeemable noncontrolling interest of ~~$16,037, with the~~$2,075. The offsetting amount was recognized within retained earnings ~~since~~as the redemption ~~value remains~~values for this noncontrolling interest was below the estimated fair value.

~~All Other Businesses~~

On October 1, 2018, we acquired approximately 99% of the outstanding equity interests of BuildASign LLC. The remaining 1% is considered a redeemable noncontrolling equity interest, as it is redeemable for cash based on future financial results through put and call rights and not solely within our control.~~As of December 31, 2021, the~~

~~redemption value of the noncontrolling equity interest was less than the carrying value, and therefore no adjustment was required.~~

~~On April 23, 2021, we acquired 81% of the outstanding equity interests of a U.S.-based company that provides production expertise and sells into a growing product category. The remaining~~19% is considered a redeemable noncontrolling equity interest as it is redeemable for cash based on future financial results through put and call rights and not solely within our control. On the acquisition date, we recognized the redeemable noncontrolling interest at fair value of $4,370. As of December 31, 2021, the redemption value was less than the carrying value, and therefore no adjustment was required.

The following table presents the reconciliation of changes in our redeemable noncontrolling interests:

Redeemable ~~noncontrolling interests~~Noncontrolling Interest

Balance as of June 30, ~~2021~~2022

~~71,120~~131,483

Accretion to redemption value ~~recognized in retained earnings~~ (1)

~~16,037~~2,725

Net income attributable to noncontrolling ~~interest~~interests

~~3,102~~700

~~Distribution~~Distributions to noncontrolling ~~interest~~interests (2)

~~(3,963)~~(3,652)

~~Purchase of noncontrolling interest~~

~~(52)~~

Foreign currency translation

~~(1,461)~~(1,347)

Balance as of ~~December 31, 2021~~September 30, 2022

~~84,783~~129,909

_________________

(1) Accretion of redeemable noncontrolling interests to redemption value recognized in retained earnings or additional paid in capital is the result of the estimated redemption amount being greater than carrying value but less than fair value. Refer above for additional details.

(2) ~~During the three months ended December 31, 2021, we~~Distributions to noncontrolling interests include contractually required profit sharing payments made ~~a required annual distribution~~annually to the ~~noncontrolling~~minority interest holders ~~of a PrintBrothers business. The distribution is determined based on forecasted performance and will be adjusted for actual results upon exercise~~in one of the ~~related put or call options described above.~~PrintBrothers businesses.

~~12.~~11. Segment Information

Our operating segments are based upon the manner in which our operations are managed and the availability of separate financial information reported internally to the Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”) for purposes of making decisions about how to allocate resources and assess performance.

As of ~~December 31, 2021,~~September 30, 2022, we have numerous operating segments under our management reporting structure which are reported in the following 5five reportable segments:

•Vista - Vista is the parent brand of multiple offerings including VistaPrint, VistaCreate, 99designs by Vista, and Vista Corporate Solutions, which together represent a full-service design, digital and print solution, elevating small businesses’ presence in physical and digital spaces and empowering them to achieve success. This segment also includes our recently acquired Depositphotos business, whose subsidiary, Crello, was rebranded to VistaCreate ~~during~~soon after the ~~current quarter.~~acquisition.

•PrintBrothers - Includes the results of our druck.at, Printdeal, and WIRmachenDRUCK businesses.

•The Print Group - Includes the results of our Easyflyer, Exaprint, Pixartprinting, and Tradeprint businesses.

•National Pen - Includes the global operations of our National Pen business, which manufactures and markets custom writing instruments and promotional products, apparel and gifts.

•All Other Businesses - Includes ~~a collection of~~two businesses grouped together based on materiality. In addition to BuildASign, which is a larger and profitable business, the All Other Businesses reportable segment consists of ~~two~~another, smaller ~~businesses~~business that we continue to manage at a relatively modest operating loss and a recently acquired company that provides production expertise and sells into a growing product category.

◦BuildASign is an internet-based provider of canvas-print wall décor, business signage and other large-format printed products, based in Austin, Texas. ~~In the fourth quarter of fiscal year 2021, we closed a small acquisition under BuildASign in a new product category.~~

◦Printi is an online printing leader in Brazil, which offers a superior customer experience with transparent and attractive pricing, reliable service and quality.

◦
YSD is a startup operation that provides end-to-end mass customization solutions to brands and intellectual property owners in China, supporting multiple channels including retail stores, websites, WeChat and e-commerce platforms to enhance brand awareness and competitiveness and develop new markets.

Central and corporate costs consist primarily of the team of software engineers that is building our mass customization platform; shared service organizations such as global procurement; technology services such as hosting and security; administrative costs of our Cimpress India offices where numerous Cimpress businesses have dedicated business-specific team members; and corporate functions including our Board of Directors, CEO, and the team members necessary for managing corporate activities, such as treasury, tax, capital allocation, financial consolidation, internal audit and legal. These costs also include certain unallocated share-based compensation costs.

The expense value of our PSU awards is based on a Monte Carlo fair value analysis and is required to be expensed on an accelerated basis. In order to ensure comparability in measuring our businesses' results, we allocate the straight-line portion of the fixed grant value to our businesses. Any expense in excess of the amount as a result of the fair value measurement of the PSUs and the accelerated expense profile of the awards is recognized within central and corporate costs.

Our definition of segment EBITDA is GAAP operating income excluding certain items, such as depreciation and amortization, expense recognized for contingent earn-out related charges including the changes in fair value of contingent consideration and compensation expense related to cash-based earn-out mechanisms dependent upon continued employment, share-based compensation related to investment consideration, certain impairment expense, and restructuring charges. We include insurance proceeds that are not recognized within operating income. We do not allocate non-operating income, including realized gains and losses on currency hedges, to our segment results.

During the fourth quarter of fiscal 2022, we revised our internal reporting to reallocate certain third-party technology costs that were previously held within our Central and corporate costs to our Vista business and reportable segment. These include certain third-party costs that are variable in nature and the cost variability is primarily driven by decisions or volumes in the Vista business. We revised our presentation of the prior period presented to reflect our updated segment reporting, which decreased both Vista segment EBITDA and Central and corporate costs by $1,119 for the three months ended September 30, 2021.

Our balance sheet information is not presented to the CODM on an allocated basis, and therefore we do not present asset information by segment. We do present other segment information to the CODM, which includes purchases of property, plant and equipment and capitalization of software and website development costs, and therefore include that information in the tables below.

Revenue by segment is based on the business-specific websites or sales channel through which the customer’s order was transacted. The following tables set forth revenue by reportable segment, as well as disaggregation of revenue by major geographic region and reportable segment.


		Three Months Ended December 31,			Six Months Ended December 31,						Three Months Ended September 30,
			2021		2020		2021		2020				2022		2021
Revenue:	Revenue:											Revenue:
Vista ~~(1)~~	Vista ~~(1)~~		$	448,114	$	431,076	$	797,594	$	760,367		Vista ~~(1)~~	$	369,369	$	349,480
PrintBrothers	PrintBrothers		137,694		121,806		263,051		221,918			PrintBrothers	132,699		125,357
The Print Group	The Print Group		90,130		76,204		162,950		142,641			The Print Group	76,823		72,820
National Pen	National Pen		124,717		114,692		193,981		182,341			National Pen	81,666		69,264
All Other Businesses	All Other Businesses		57,719		55,365		105,590		98,843			All Other Businesses	51,827		47,871
Total segment revenue	Total segment revenue		858,374		799,143		1,523,166		1,406,110			Total segment revenue	712,384		664,792
Inter-segment eliminations ~~(2)~~(1)	Inter-segment eliminations ~~(2)~~(1)		(8,658)		(18,239)		(15,851)		(38,706)			Inter-segment eliminations ~~(2)~~(1)	(8,969)		(7,193)
Total consolidated revenue	Total consolidated revenue		$	849,716	$	780,904	$	1,507,315	$	1,367,404		Total consolidated revenue	$	703,415	$	657,599

_____________________

(1) During the first quarter of fiscal year 2022, we identified an immaterial error and revised our previously reported results to decrease Vista segment revenue by $5,241 for the three and six months ended December 31, 2020. Refer to Note 2 for additional details.

~~(2)~~ Refer to the "Revenue by Geographic Region" tables below for detail of the inter-segment revenue within each respective segment. The decrease of inter-segment eliminations is the result of significant cross-business transactions during the three and six months ended December 31, 2021 associated with the fulfillment of masks in response to the pandemic. Demand for this product was far lower in the current periods.

Three Months Ended December 31, 2021
Vista PrintBrothers The Print Group National Pen All Other Total
Revenue by Geographic Region:
North America $ 289,615 $ — $ — $ 57,976 $ 51,035 $ 398,626
Europe 117,627 137,173 87,596 53,797 — 396,193
Other 39,767 — — 9,229 5,901 54,897
Inter-segment 1,105 521 2,534 3,715 783 8,658
Total segment revenue 448,114 137,694 90,130 124,717 57,719 858,374
Less: inter-segment elimination (1,105) (521) (2,534) (3,715) (783) (8,658)
Total external revenue $ 447,009 $ 137,173 $ 87,596 $ 121,002 $ 56,936 $ 849,716

Six Months Ended December 31, 2021
Vista PrintBrothers The Print Group National Pen All Other Total
Revenue by Geographic Region:
North America $ 534,064 $ — $ — $ 99,014 $ 92,343 $ 725,421
Europe 189,160 262,301 158,751 74,648 — 684,860
Other 72,563 — — 12,762 11,709 97,034
Inter-segment 1,807 750 4,199 7,557 1,538 15,851
Total segment revenue 797,594 263,051 162,950 193,981 105,590 1,523,166
Less: inter-segment elimination (1,807) (750) (4,199) (7,557) (1,538) (15,851)
Total external revenue $ 795,787 $ 262,301 $ 158,751 $ 186,424 $ 104,052 $ 1,507,315

Three Months Ended December 31, 2020
Vista PrintBrothers The Print Group National Pen All Other Total
Revenue by Geographic Region:
North America $ 268,736 $ — $ — $ 48,678 $ 49,662 $ 367,076
Europe 126,877 121,564 69,343 47,578 — 365,362
Other 34,792 — — 8,699 4,975 48,466
Inter-segment 671 242 6,861 9,737 728 18,239
Total segment revenue 431,076 121,806 76,204 114,692 55,365 799,143
Less: inter-segment elimination (671) (242) (6,861) (9,737) (728) (18,239)
Total external revenue $ 430,405 $ 121,564 $ 69,343 $ 104,955 $ 54,637 $ 780,904

Six Months Ended December 31, 2020
Vista PrintBrothers The Print Group National Pen All Other Total
Revenue by Geographic Region:
North America $ 500,831 $ — $ — $ 78,999 $ 88,606 $ 668,436
Europe 204,125 221,505 129,721 68,182 — 623,533
Other 54,318 — — 12,347 8,770 75,435
Inter-segment 1,093 413 12,920 22,813 1,467 38,706
Total segment revenue 760,367 221,918 142,641 182,341 98,843 1,406,110
Less: inter-segment elimination (1,093) (413) (12,920) (22,813) (1,467) (38,706)
Total external revenue $ 759,274 $ 221,505 $ 129,721 $ 159,528 $ 97,376 $ 1,367,404

2621


	Three Months Ended September 30, 2022
	Vista		PrintBrothers		The Print Group		National Pen		All Other		Total
Revenue by Geographic Region:
North America	$	266,486	$	—	$	—	$	49,447	$	43,292	$	359,225
Europe	70,496		132,382		74,991		24,945		—		302,814
Other	31,877		—		—		2,552		6,947		41,376
Inter-segment	510		317		1,832		4,722		1,588		8,969
Total segment revenue	369,369		132,699		76,823		81,666		51,827		712,384
Less: inter-segment elimination	(510)		(317)		(1,832)		(4,722)		(1,588)		(8,969)
Total external revenue	$	368,859	$	132,382	$	74,991	$	76,944	$	50,239	$	703,415


	Three Months Ended September 30, 2021
	Vista		PrintBrothers		The Print Group		National Pen		All Other		Total
Revenue by Geographic Region:
North America	$	244,449	$	—	$	—	$	41,038	$	41,308	$	326,795
Europe	71,533		125,128		71,155		20,851		—		288,667
Other	32,796		—		—		3,533		5,808		42,137
Inter-segment	702		229		1,665		3,842		755		7,193
Total segment revenue	349,480		125,357		72,820		69,264		47,871		664,792
Less: inter-segment elimination	(702)		(229)		(1,665)		(3,842)		(755)		(7,193)
Total external revenue	$	348,778	$	125,128	$	71,155	$	65,422	$	47,116	$	657,599

The following table includes segment EBITDA by reportable segment, total income from operations and total income (loss) before income taxes:

Three Months Ended December 31, Six Months Ended December 31,
2021 2020 2021 2020
Segment EBITDA:
Vista $ 92,689 $ 112,331 $ 160,728 $ 202,488
PrintBrothers 18,605 16,457 34,888 26,172
The Print Group 16,358 12,569 30,747 24,752
National Pen 31,599 18,728 23,551 8,057
All Other Businesses 6,264 10,657 11,155 19,266
Total segment EBITDA 165,515 170,742 261,069 280,735
Central and corporate costs (36,626) (30,984) (71,898) (62,004)
Depreciation and amortization (45,314) (43,597) (89,746) (85,887)
Certain impairments and other adjustments (1) 2,713 215 3,493 (568)
Restructuring-related charges (307) (2,182) 2 (2,096)
Total income from operations 85,981 94,194 102,920 130,180
Other income (expense), net 12,839 (17,198) 26,009 (25,952)
Interest expense, net (25,369) (30,141) (51,057) (60,657)
Income before income taxes $ 73,451 $ 46,855 $ 77,872 $ 43,571

~~________________________~~

(1) During the three and six months ended December 31, 2021, we recognized a gain of $3,324 for the sale of a facility within general and administrative expense on our consolidated statement of operations. This gain is excluded from segment EBITDA and is therefore included as a positive adjustment to reconcile total segment EBITDA to income from operations. Refer to Note 2 for additional details about the sale of this facility.


	Three Months Ended September 30,
	2022		2021
Segment EBITDA:
Vista	$	30,737	$	66,920
PrintBrothers	14,991		16,283
The Print Group	12,220		14,389
National Pen	(1,297)		(8,048)
All Other Businesses	6,178		4,891
Total segment EBITDA	62,829		94,435
Central and corporate costs	(34,578)		(34,153)
Depreciation and amortization	(40,942)		(44,432)




Certain impairments and other adjustments	(3,456)		780
Restructuring-related charges	(1,820)		309


Total (loss) income from operations	(17,967)		16,939
Other income, net	27,397		13,170
Interest expense, net	(24,806)		(25,688)

(Loss) income before income taxes	$	(15,376)	$	4,421

Three Months Ended December 31, Six Months Ended December 31,
2021 2020 2021 2020
Depreciation and amortization:
Vista $ 17,563 $ 14,952 $ 33,966 $ 28,539
PrintBrothers 5,106 5,509 10,340 10,971
The Print Group 6,612 6,641 13,196 13,222
National Pen 6,220 6,255 12,128 12,322
All Other Businesses 4,381 4,391 9,423 10,259
Central and corporate costs 5,432 5,849 10,693 10,574
Total depreciation and amortization $ 45,314 $ 43,597 $ 89,746 $ 85,887

Three Months Ended December 31, Six Months Ended December 31,
2021 2020 2021 2020
Purchases of property, plant and equipment:
Vista $ 7,881 $ 2,515 $ 10,359 $ 4,449
PrintBrothers 1,204 213 2,716 1,138
The Print Group 5,249 3,043 6,677 5,930
National Pen 1,023 1,372 2,211 2,824
All Other Businesses 2,157 1,014 3,672 1,968
Central and corporate costs 401 250 904 481
Total purchases of property, plant and equipment $ 17,915 $ 8,407 $ 26,539 $ 16,790

2722

Three Months Ended December 31, Six Months Ended December 31,
2021 2020 2021 2020
Capitalization of software and website development costs:
Vista $ 8,618 $ 4,429 $ 16,190 $ 11,416
PrintBrothers 236 185 468 591
The Print Group 519 433 945 663
National Pen 1,053 355 1,731 1,069
All Other Businesses 1,083 681 2,267 1,742
Central and corporate costs 4,986 5,558 10,533 10,964
Total capitalization of software and website development costs $ 16,495 $ 11,641 $ 32,134 $ 26,445


	Three Months Ended September 30,
	2022		2021
Depreciation and amortization:
Vista	$	14,670	$	16,403
PrintBrothers	4,773		5,234
The Print Group	5,862		6,584
National Pen	5,891		5,908
All Other Businesses	4,516		5,042
Central and corporate costs	5,230		5,261
Total depreciation and amortization	$	40,942	$	44,432


	Three Months Ended September 30,
	2022		2021
Purchases of property, plant and equipment:
Vista	$	3,124	$	2,478
PrintBrothers	708		1,512
The Print Group	4,819		1,428
National Pen	1,601		1,188
All Other Businesses	1,068		1,515
Central and corporate costs	438		503
Total purchases of property, plant and equipment	$	11,758	$	8,624


	Three Months Ended September 30,
	2022		2021
Capitalization of software and website development costs:
Vista	$	6,635	$	7,572
PrintBrothers	389		232
The Print Group	490		426
National Pen	588		678
All Other Businesses	924		1,184
Central and corporate costs	6,304		5,547
Total capitalization of software and website development costs	$	15,330	$	15,639

The following table sets forth long-lived assets by geographic area:


		December 31, 2021		June 30, 2021			September 30, 2022		June 30, 2022
Long-lived assets (1):	Long-lived assets (1):					Long-lived assets (1):
United States ~~(2)~~	United States ~~(2)~~	$	91,888	$	107,868	United States ~~(2)~~	$	90,481	$	95,589
Switzerland						Switzerland	71,901		72,394
Netherlands	Netherlands	73,620		75,996		Netherlands	69,353		67,240
Canada	Canada	63,020		60,779		Canada	57,730		58,498
Switzerland		71,511		68,880
Italy	Italy	46,010		47,776		Italy	45,239		48,262
France	France	24,011		25,417		France	23,431		25,383
Jamaica	Jamaica	19,611		20,550		Jamaica	18,341		18,744
Australia	Australia	20,990		21,298		Australia	17,838		17,751
Japan	Japan	13,928		14,891		Japan	10,489		11,392
Other	Other	88,657		96,063		Other	88,406		90,677
Total	Total	$	513,246	$	539,518	Total	$	493,209	$	505,930

___________________

(1) Excludes goodwill of ~~$783,159~~$748,055 and ~~$726,979,~~$766,600, intangible assets, net of ~~$180,960~~$139,864 and ~~$186,744,~~$154,730, deferred tax assets of~~$138,805~~ $114,020 and ~~$149,618,~~$113,088, and marketable securities, non-current of ~~$27,693~~$22,449 and ~~$50,713~~zero as of ~~December 31, 2021~~September 30, 2022 and June 30, ~~2021,~~2022, respectively.

(2) The decrease in long-lived assets located in the United States was largely due to the sale of a facility which had a net book value of $15,860 as of June 30, 2021. Refer to Note 2 for additional details about the sale of the facility.

~~13.~~

12. Commitments and Contingencies

Purchase Obligations

At ~~December 31, 2021,~~September 30, 2022, we had unrecorded commitments under contract of ~~$306,904,~~$251,011, including ~~third-party web services of $97,982,~~ inventory, ~~and~~ third-party fulfillment and digital service purchase commitments of ~~$31,813,~~$86,678; third-party cloud services of $80,997; software of ~~$117,424,~~$42,238; advertising of ~~$22,868,~~$15,181; production and computer equipment purchases of ~~$21,162,~~$5,952; professional and consulting fees of ~~$4,581,~~$5,019, and other unrecorded purchase commitments of ~~$11,074.~~$14,946.

Other Obligations

We deferred payments for several of our acquisitions, resulting in the recognition of a liability of ~~$52,677~~$8,463 as of ~~December 31, 2021, of~~September 30, 2022, which ~~$43,691~~primarily relates to ~~the 99designs acquisition and is payable in February 2022. The remaining liability includes~~a deferred ~~payments related to~~payment for our acquisition of Depositphotos ~~which are~~that is payable in ~~January and~~ October ~~2022. Refer~~2022, subject to ~~Note 7 for additional details.~~any outstanding indemnification claims.

Legal Proceedings

We are not currently party to any material legal proceedings. Although we cannot predict with certainty the results of litigation and claims to which we may be subject from time to time, we do not expect the resolution of any of our current matters to have a material adverse impact on our consolidated results of operations, cash flows or financial position. For all legal matters, at each reporting period, we evaluate whether or not a potential loss amount

or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. We expense the costs relating to our legal proceedings as those costs are incurred.

~~14.~~13. Restructuring Charges

Restructuring costs include one-time employee termination benefits, acceleration of share-based compensation, write-off of assets and other related costs including third-party professional and outplacement services. During the ~~six~~three months ended ~~December 31, 2021,~~September 30, 2022, we recognized ~~immaterial adjustments to~~restructuring charges of $1,820. We recognized restructuring expense ~~due~~related to ~~changes~~prior quarter actions of $1,456 in ~~prior period estimates within The Print Group reportable segment.~~our Vista business, $209 in our National Pen business and $155 in our Central and corporate costs.

The following table summarizes the restructuring activity during the ~~six~~three months ended ~~December 31, 2021. All activity was related~~September 30, 2022.


	Severance and Related Benefits		Other Restructuring Costs		Accrued restructuring liability
Balance as of June 30, 2022	$	13,449	$	—	$	13,449
Restructuring charges	1,032		788		1,820
Cash payments	(7,931)		—		(7,931)
Non-cash charges (1)	(156)		(788)		(944)
Foreign currency translation	(419)		—		(419)
Balance as of September 30, 2022	$	5,975	$	—	$	5,975

________________

(1) During the three months ended September 30, 2022, non-cash restructuring charges primarily include the Vista segment's write-off of inventory for the Japan market which has no alternative use, the write-off of equipment from National Pen's ongoing move of its European production operations from Ireland to ~~employee termination benefits.~~

~~Accrued restructuring liability~~

~~Balance as of June 30, 2021~~

~~402~~

~~Restructuring charges~~

~~(2)~~

~~Cash payments~~

~~(244)~~

~~Non-cash charges~~

~~Balance as of December 31, 2021~~

~~167~~

the Czech Republic, and share-based compensation expense upon modification to accelerate the vesting of share-based compensation awards for the actions taken in the fourth quarter of fiscal year 2022.

Item 7.2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Report contains forward-looking statements that involve risks and uncertainties. The statements contained in this Report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to our statements about the anticipated growth and development of our businesses and ~~revenues,~~financial results, the ~~anticipated impacts~~persistence of ~~global~~higher costs and supply chain disruptions and the expected impacts of those costs and disruptions on our business; the planned divestiture of our business in China; the expected impacts of our ~~expectations for~~mass customization platform; our competitive advantages; the ~~brand evolution of Vista and the anticipated benefits of the Depositphotos acquisition on our Vista business, the anticipated~~expected effects of our ~~investments in our business,~~advertising spend; sufficiency of our liquidity ~~position,~~position; legal ~~proceedings, currency volatility,~~proceedings; and sufficiency of our tax reserves. Without limiting the foregoing, the words “may,” “should,” “could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “designed,” “potential,” “continue,” “target,” “seek” and similar expressions are intended to identify forward-looking statements. All forward-looking statements included in this Report are based on information available to us up to, and including the date of this document, and we disclaim any obligation to update any such forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various important factors, including but not limited to flaws in the assumptions and judgments upon which our forecasts and estimates are based; the development, severity, and duration of ~~the COVID-19 pandemic~~supply chain constraints, inflation, and the ~~timing~~ongoing COVID-19 pandemic; our inability to mitigate increases in our costs by increasing our prices and ~~pace of economic recovery; our failure to anticipate and react to the effects of the pandemic on our customers, supply chain, markets, team members, and business;~~taking other measures; our inability to make the investments that we plan to make or the failure of those investments to achieve the results we expect; our failure to execute on the transformation of the Vista business; loss or unavailability of key personnel or our inability to recruit talented personnel to drive performance of our businesses; the failure of businesses we acquire or invest in to perform as ~~expected, including possible impacts~~expected; our failure to develop and deploy our mass customization platform or the failure of the ~~conflict in Ukraine on Depositphotos' operations;~~platform to drive the efficiencies and competitive advantages we expect; the anticipated exercise of the PrintBrothers put options; unanticipated changes in our markets, customers, or businesses; changes in the laws and regulations, or in the interpretation of laws and regulations, that affect our businesses; our failure to manage the growth and complexity of our business and expand our operations; our failure to maintain compliance with the covenants in our debt documents or to pay our debts when due; competitive pressures; general economic ~~conditions;~~conditions, including the possibility of an economic downturn in some or all of our markets; and other factors described in this Report and the documents that we periodically file with the SEC.

Executive Overview

Cimpress is a strategically focused group of more than a dozen businesses that specialize in mass customization of printing and related products, via which we deliver large volumes of individually small-sized customized ~~orders for~~orders. Our products include a broad ~~spectrum~~range of ~~print,~~marketing materials, business cards, signage, promotional products, logo apparel, packaging, books and magazines, wall decor, photo merchandise, invitations and announcements, ~~writing instruments, packaging, apparel~~ and other categories. ~~We invest in and build customer-focused, entrepreneurial mass~~Mass customization ~~businesses for~~is a core element of the ~~long term, which we manage in a decentralized, autonomous manner. We drive competitive advantage across~~business model of each Cimpress through a select few shared strategic capabilities that have the greatest potential to create Cimpress-wide value. We limit all other central activities to only those which absolutely must be performed centrally.

~~In October 2021 our Vistaprint~~ business and ~~reportable segment introduced~~is a ~~new parent brand "Vista", reflecting the business' ongoing transformation into the expert design~~competitive strategy which seeks to produce goods and marketing partner for small businesses around the world. This new parent brand encompasses VistaPrint, 99designs by Vista, VistaCreate, and Vista Corporate Solutions. This move should help open customers' mindsservices to ~~allow us to serve a broader set of their~~meet individual customer needs across a wide range of products and solutions that includes design, social media and web presence as well as print. No changes were made to our internal organizational and reporting structure as a result of this rebranding, but we will refer to this reportable segment as "Vista" from here forward and throughout this document.with near mass production efficiency.

As of ~~December 31, 2021,~~September 30, 2022, we have numerous operating segments under our management reporting structure that are reported in the following five reportable segments: Vista, PrintBrothers, The Print Group, National Pen, and All Other Businesses. Refer to Note 1211 in our accompanying consolidated financial statements for additional information relating to our reportable segments and our segment financial measures.

~~COVID-19~~

The effects of the pandemic on Cimpress have continued to diminish in terms of its impact on demand, but we continue to experience volatility as COVID-19 variants emerge and government restrictions are put in place. These pandemic effects are more pronounced in product categories that are more dependent on physical interactions, while certain other product categories have also grown as a result of the pandemic.

Our businesses continue to experience supply chain challenges ~~as a facet~~including rising input costs and some areas of ~~pandemic impacts which has created both difficulties and opportunities for Cimpress businesses.~~disruption. Each of our reportable segments has seen material cost increases of product substrates like paper, production materials like aluminum plates, freight and shipping charges, energy costs and higher compensation costs due to inflationary pressures and a more competitive labor market. ~~Our~~We believe our scale-based shared strategic capabilities and supplier relationships provide competitive ~~advantage~~advantages for our businesses to weather these challenges. Through data capabilities, our businesses are regularly testing new pricing approaches, and in ~~most~~all businesses there ~~has~~have been ~~some form of~~ pricing increases that are ~~mostly~~partially offsetting the increased costs.

We continue to hire talent and make investments in technology, data, new product introduction, customer experience improvements, and branding that are designed to build on our competitive advantages and drive sustainable growth in our businesses as we come out of the pandemic. We continue to maintain flexibility in our cost structure, while at the same time increasing investment in areas we believe will generate high return.

Financial Summary

The primary financial metric by which we set quarterly and annual budgets both for individual businesses and Cimpress wide is our adjusted free cash flow before cash interest expense; however, in evaluating the financial condition and operating performance of our business, management considers a number of metrics including revenue growth, organic constant-currency revenue growth, operating income, adjusted EBITDA, cash flow from operations and adjusted free cash flow. Reconciliations of our non-GAAP financial measures are included within the ~~"Consolidated~~

"Consolidated Results of Operations" and "Additional Non-GAAP Financial Measures" sections of Management's Discussion and Analysis. A summary of these key financial metrics for the three ~~and six~~ months ended ~~December 31, 2021~~September 30, 2022 as compared to the three ~~and six~~ months ended ~~December 31, 2020~~September 30, 2021 follows:

~~Second Quarter Fiscal Year 2022~~

•Revenue increased by 9%7% to ~~$849.7~~$703.4 million.

•Constant-currency revenue (aincreased by 15% and by 14% when excluding the revenue of acquired companies for the first twelve months after acquisition (both non-GAAP financial ~~measure) increased by 11% and by 9% when excluding acquisitions completed in the last four quarters.~~measures).

•Operating ~~inco~~me income decreased by ~~$8.2~~ $34.9 million to ~~$86.0~~an operating loss of $18.0 million.

•Adjusted EBITDA (a non-GAAP financial measure) decreased by ~~$1.4~~$22.0 million to ~~$142.1~~$45.6 million.

•Diluted net ~~income~~loss per share attributable to Cimpress plc increased to ~~$2.08~~$(0.97) from ~~$1.22 in the comparative period.~~

~~Year to Date Fiscal Year 2022~~

•~~Revenue increased by 10% to $1,507.3 million.~~

•~~Constant-currency revenue (a non-GAAP financial measure) increased by 11% and by 9% when excluding acquisitions completed in the last four quarters.~~

•~~Operating income decreased by $27.3 million to $102.9 million.~~

•~~Adjusted EBITDA (a non-GAAP financial measure) decreased by $22.2 million to $209.7 million.~~

•~~Diluted net income per share attributable to Cimpress plc increased to $1.82 from $0.82~~$(0.26) in the comparative period.

•Cash provided by operating activities decreased by ~~$76.3~~$61.8 million to ~~$179.9~~an outflow of $(25.3) million.

•Adjusted free cash flow (a non-GAAP financial measure) decreased by ~~$91.7~~$64.6 million to ~~$121.2~~a use of cash of $(52.3) million.

For the ~~second~~first quarter of fiscal year ~~2022,~~2023, theincrease in reported revenue was primarily due to growth across all businesses and markets through increased pricing and customer demand. Reported revenue slightly benefited from our recent acquisitions, with the ~~continued recovery of demand, as the effects~~majority of the ~~pandemic have lessened but continue~~additional revenue attributable to have an impact. We continue to experience strong demand for newer fast-growing product categories, while the pandemic continued to negatively affect the demand for certain marketing material products. We benefited from the addition of revenue from Depositphotos, which was acquired on October 1, 2021 and is included in our Vista business. ~~Revenue also benefited from pricing~~Pricing changes ~~in many of~~made during the past year improved our ~~businesses, which was~~revenue on a year-over-year basis, as these actions were one tool we used to mitigate ~~the~~ inflationary cost pressures that have arisen from ongoing supply chain challenges. ~~Revenue for customized face masks was much lower as compared to the prior year as demand for pandemic-related products has diminished.~~ Currency exchange fluctuations ~~also~~ had a significant negative effect on revenue during the current quarter.

For the three months ended ~~December 31, 2021,~~September 30, 2022, the decreasein operating income was primarily due to increased investments ~~and discretionary costs as we compare against a period that still had temporary pandemic-driven cost control measures~~ in ~~place.~~our Vista business. These ~~increased costs~~investments include ~~higher compensation costs as we have hired additional team members to support key initiatives, mainly~~the impact of hiring in Vista throughout fiscal year 2022, as well as increased advertising spend driven by mid- and upper-funnel advertising. Inflationary pressures on input costs and wages were significantly offset by actions taken to pass these increases to customers in the form of increased pricing. We also recognized an increase in restructuring charges of $2.1 million, which were partially offset by savings from the related actions taken in our ~~central technology team. Share based compensation expense also increased year over year largely because~~Vista business in the ~~comparative period's annual grant cycle was delayed until the third~~fourth quarter of fiscal year ~~2021 while the current period's grants occurred during the first quarter of fiscal year~~ 2022. ~~Advertising spend also increased, primarily in our Vista business.~~

Adjusted EBITDA decreased year over year, primarily for the same reasons operating income decreased. Adjusted EBITDA excludes restructuring charges, share-based compensation expense, certain impairments, and non-cash gains on the sale of assets, and includes the realized gains or losses on our currency derivatives intended to hedge adjusted EBITDA. The net year-over-year impact of currency on consolidated adjusted EBITDA was ~~insignificant.~~a benefit of approximately $7.9 million.

~~Unrealized~~Diluted net loss per share attributable to Cimpress plc increased for three months ended September 30, 2022 primarily for the same reasons operating income decreased, partially offset by unrealized currency gains caused by exchange rate ~~volatility and~~volatility.

Cash from operations decreased ~~interest expense~~$61.8 million year over year due to the decrease in operating income described above, as well as decreased working capital cash flows of $42.5 million, largely driven by higher inventory levels as our ~~debt refinancing~~businesses increased raw materials on hand to minimize availability risk during our seasonally significant second quarter and thereafter.

Adjusted free cash flow decreased by $64.6 million, due to the ~~fourth quarter of fiscal 2021 resulted~~operating cash flow decrease described above, as well as a $3.1 million increase in ~~an increase to diluted net income per share attributable to Cimpress plc during the three months ended December 31, 2021.~~capital expenditures.

Consolidated Results of Operations

Consolidated Revenue

Our businesses generate revenue primarily from the sale and shipment of customized ~~manufactured~~ products. We also generate revenue, to a much lesser extent (and primarily in our Vista business), from digital services, graphic design services, website design and hosting, and email marketing services, as well as a small percentage of revenue from order referral fees and other third-party offerings. For additional discussion relating to segment revenue results, refer to the "Reportable Segment Results" section included below.

Total revenue and revenue growth by reportable segment for the three ~~and six~~ months ended ~~December 31,~~September 30, 2022 and 2021 ~~and 2020~~ are shown in the following table:

In thousands Three Months Ended December 31, Currency
Impact: Constant-
Currency Impact of Acquisitions/Divestitures: Constant- Currency Revenue Growth
2021 2020 %
Change (Favorable)/Unfavorable Revenue Growth (1) (Favorable)/Unfavorable Excluding Acquisitions/Divestitures (2)
Vista $ 448,114 $ 431,076 4% 1% 5% (2)% 3%
PrintBrothers 137,694 121,806 13% 5% 18% —% 18%
The Print Group 90,130 76,204 18% 5% 23% —% 23%
National Pen 124,717 114,692 9% 2% 11% —% 11%
All Other Businesses 57,719 55,365 4% 1% 5% (5)% —%
Inter-segment eliminations (8,658) (18,239)
Total revenue $ 849,716 $ 780,904 9% 2% 11% (2)% 9%

In thousands Six Months Ended December 31, Currency
Impact: Constant-
Currency Impact of Acquisitions/Divestitures: Constant- Currency Revenue Growth
2021 2020 %
Change (Favorable)/Unfavorable Revenue Growth (1) (Favorable)/Unfavorable Excluding Acquisitions/Divestitures (2)
Vista $ 797,594 $ 760,367 5% —% 5% (3)% 2%
PrintBrothers 263,051 221,918 19% 2% 21% —% 21%
The Print Group 162,950 142,641 14% 2% 16% —% 16%
National Pen 193,981 182,341 6% 1% 7% —% 7%
All Other Businesses 105,590 98,843 7% —% 7% (5)% 2%
Inter-segment eliminations (15,851) (38,706)
Total revenue $ 1,507,315 $ 1,367,404 10% 1% 11% (2)% 9%

~~_________________~~

(1) Constant-currency revenue growth, a non-GAAP financial measure, represents the change in total revenue between current and prior year periods at constant-currency exchange rates by translating all non-U.S. dollar denominated revenue generated in the current period using the prior year period’s average exchange rate for each currency to the U.S. dollar. Our reportable segments-related growth is inclusive of inter-segment revenues, which are eliminated in our consolidated results.

(2) Constant-currency revenue growth excluding acquisitions/divestitures, a non-GAAP financial measure, excludes revenue results for businesses in the period in which there is no comparable year-over-year revenue. Our reportable segments-related growth is inclusive of inter-segment revenues, which are eliminated in our consolidated results. For example, revenue from 99designs, which we acquired on October 1, 2020 in Q2 2021, is excluded from revenue growth in Q1 of fiscal year 2022 since there are no full quarter results in the comparable period, but revenue is included in revenue growth for Q2 through Q4 of fiscal year 2022. Our reportable segments-related growth is inclusive of inter-segment revenues, which are eliminated in our consolidated results.

We have provided these non-GAAP financial measures because we believe they provide meaningful information regarding our results on a consistent and comparable basis for the periods presented. Management uses these non-GAAP financial measures, in addition to GAAP financial measures, to evaluate our operating results. These non-GAAP financial measures should be considered supplemental to and not a substitute for our reported financial results prepared in accordance with GAAP.


In thousands	Three Months Ended September 30,					Currency Impact:	Constant- Currency	Impact of Acquisitions/Divestitures:	Constant- Currency Revenue Growth
	2022		2021		% Change	(Favorable)/Unfavorable	Revenue Growth (1)	(Favorable)/Unfavorable	Excluding Acquisitions/Divestitures (2)
Vista	$	369,369	$	349,480	6%	4%	10%	(2)%	8%
PrintBrothers	132,699		125,357		6%	17%	23%	(1)%	22%
The Print Group	76,823		72,820		6%	18%	24%	—%	24%
National Pen	81,666		69,264		18%	6%	24%	—%	24%
All Other Businesses	51,827		47,871		8%	—%	8%	—%	8%
Inter-segment eliminations	(8,969)		(7,193)
Total revenue	$	703,415	$	657,599	7%	8%	15%	(1)%	14%

Consolidated Cost of Revenue

Cost of revenue includes materials used by our businesses to manufacture their products, payroll and related expenses for production and design services personnel, depreciation of assets used in the production process and in support of digital marketing service offerings, shipping, handling and processing costs, third-party production and design costs, costs of free products and other related costs of products our businesses sell.

In thousands
Three Months Ended December 31, Six Months Ended December 31,
2021 2020 2021 2020
Cost of revenue $ 423,937 $ 380,738 $ 762,926 $ 679,582
% of revenue 49.9 % 48.8 % 50.6 % 49.7 %


In thousands	Three Months Ended September 30,
		2022			2021
Cost of revenue		$	377,735		$	338,989
% of revenue		53.7		%	51.5		%

For the three ~~and six~~ months ended ~~December 31, 2021,~~September 30, 2022, cost of revenue increased by ~~$43.2~~$38.7 million ~~and $83.3 million, respectively,~~as compared to the prior period, primarily due to demand-dependent cost of goods sold, including third-party fulfillment, material and shipping costs. ~~During the first half of the fiscal year, we experienced increasing~~We've continued to experience impacts from global supply chain challenges that resulted in increased costs for product substrates like paper, production materials like aluminum plates, freight and shipping charges, and energy costs. Compensation costs are also higher due to the combination of a more competitive labor ~~market.~~market and the inflationary environment in many jurisdictions where we operate. The overall impact of increased costs, net of pricing increases and manufacturing efficiencies, had varying impacts on our businesses during the three ~~and six~~ months ended ~~December 31, 2021. It remains a challenging environment and we~~September 30, 2022. We expect higher input costs and supply constraints to persist, although we are unable to predict for how long. We ~~will continue to leverage our clear competitive advantages and~~ believe ~~that~~ we are ~~well positioned~~advantaged in this environment versus ~~competitors.~~smaller competitors because our scale provides us with a stronger supplier negotiation position for both costs and availability of supply.

Consolidated Operating Expenses

The following table summarizes our comparative operating expenses for the following periods:


In thousands	In thousands	Three Months Ended December 31,							Six Months Ended December 31,					In thousands			Three Months Ended September 30,
			2021			2020				2021 vs. 2020	2021			2020				2021 vs. 2020		2022			2021
Technology and development expense	Technology and development expense		$	70,267		$	65,036			8%	$	137,544		$	123,525			11%	Technology and development expense	$	74,475		$	67,277
% of revenue	% of revenue		8.3		%	8.3		%			9.1		%	—		%			% of revenue	10.6		%	10.2		%
Marketing and selling expense	Marketing and selling expense		$	208,616		$	182,322			14%	$	383,313		$	320,472			20%	Marketing and selling expense	$	200,930		$	174,697
% of revenue	% of revenue		24.6		%	23.3		%			25.4		%	23.4		%			% of revenue	28.6		%	26.6		%
General and administrative expense	General and administrative expense		$	46,726		$	42,979			9%	$	93,274		$	84,791			10%	General and administrative expense	$	54,072		$	46,548
% of revenue	% of revenue		5.5		%	5.5		%			6.2		%	6.2		%			% of revenue	7.7		%	7.1		%
Amortization of acquired intangible assets	Amortization of acquired intangible assets		$	13,882		$	13,453			3%	$	27,340		$	26,758			2%	Amortization of acquired intangible assets	$	12,350		$	13,458
% of revenue	% of revenue		1.6		%	1.7		%			1.8		%	2.0		%			% of revenue	1.8		%	2.0		%
Restructuring expense (1)	Restructuring expense (1)		$	307		$	2,182			(86)%	$	(2)		$	2,096			(100)%	Restructuring expense (1)	$	1,820		$	(309)
% of revenue	% of revenue		0.0		%	0.3		%			0.0		%	0.2		%			% of revenue	0.3		%	0.0		%

_____________________

(1) Refer to Note 1413 in our accompanying consolidated financial statements for additional details relating to restructuring expense.

Technology and development expense

Technology and development expense consists primarily of payroll and related expenses for employees engaged in software and manufacturing engineering, information technology operations and content development, as well as amortization of capitalized software and website development costs, including hosting of our websites, asset depreciation, patent amortization, and other technology infrastructure-related costs. Depreciation expense for information technology equipment that directly supports the delivery of our digital marketing services products is included in cost of revenue.

Technology and development expenses increased by ~~$5.2~~$7.2 million ~~and $14.0 million, respectively,~~ for the three ~~and six~~ months ended ~~December 31, 2021,~~September 30, 2022, as compared to the prior ~~comparative periods.~~year. This increase is primarily driven by $4.4 million of higher compensation costs primarily due to ~~increased investment~~increases from ~~hiring and the timing of~~ our inflation-adjusted annual merit cycle and ~~prior year delay of our share-based compensation grants, mainly~~market adjustments. Other operating costs increased due to higher customer demand, as well as increased travel and training costs. These increases were partially offset by cost savings resulting from restructuring actions that reduced headcount in the ~~Vista business and our central technology group. We also realized increases in other operating costs that are driven in part by increases in demand.~~fourth quarter of fiscal year 2022.

Marketing and selling expense

Marketing and selling expense consists primarily of advertising and promotional costs; payroll and related expenses for our employees engaged in marketing, sales, customer support and public relations activities; direct-mail advertising costs; and third-party payment processing fees. Our Vista, National Pen and BuildASign businesses have higher marketing and selling costs as a percentage of revenue as compared to our PrintBrothers and The Print Group businesses due to differences in the customers that they serve.

For the three ~~and six~~ months ended ~~December 31, 2021,~~September 30, 2022, marketing and selling expenses increased ~~by $26.3~~$26.2 million ~~and $62.8 million, respectively,~~ as compared to the prior ~~periods.~~year. The largest increase in marketing and selling expenses was in our Vista business, which had increased ~~by $18.5~~advertising costs of $20.0 million and~~$46.5 million, respectively. This increase in~~ increased internal marketing and customer service costs of $4.9 million. The increases to Vista ~~was~~spend were primarily driven by ~~increased~~higher mid- and upper-funnel advertising and year-over-year growth in headcount infor areas such as user experience, design, brand and data &and analytics. ~~Advertising~~Marketing and selling expense also increased across each of our other reportable segments for ~~all Cimpress businesses year over year, but to a lesser degree,~~the three months ended September 30, 2022, primarily due to higher ~~demand and more normalized payback thresholds in the current period.~~customer demand.

General and administrative expense

General and administrative expense consists primarily of transaction costs, including third-party professional fees, insurance and payroll and related expenses of employees involved in executive management, finance, legal, strategy, human resources and procurement.

For the three ~~and six~~ months ended ~~December 31, 2021,~~September 30, 2022, general and administrative expenses increased by ~~$3.7~~$7.5 million~~and $8.5 million, respectively,~~ as compared to the ~~prior-year periods, primarily~~prior year, partly due to $2.4 million of expense related to the ~~delayed timing~~termination of one of our ~~prior year's share-based~~

leased office locations as we continue to optimize our office footprint with many of our team members operating under a remote-first model. There were also increases of $1.7 million to compensation ~~grant cycle, mainly in our Vista business and our central teams. The non-recurrence of temporary cost-control measures~~costs from the ~~year-ago period also drove a year-over-year increase in corporate costs. These increases were partially offset by a non-cash gain of $3.3 million recognized during the current quarter as a result~~impacts of our ~~purchase~~inflation-adjusted annual merit cycle and ~~sale of a previously leased facility. Refer to Note 2 of the accompanying consolidated financial statements for additional details.~~higher headcount year over year. Other cost increases included higher travel and training costs.

Other Consolidated Results

Other income, ~~(expense),~~ net

Other income, ~~(expense),~~ net generally consists of gains and losses from currency exchange rate fluctuations on transactions or balances denominated in currencies other than the functional currency of our subsidiaries, as well as the realized and unrealized gains and losses on some of our derivative instruments. In evaluating our currency hedging programs and ability to qualify for hedge accounting in light of our legal entity cash flows, we considered the benefits of hedge accounting relative to the additional economic cost of trade execution and administrative burden. Based on this analysis, we execute certain currency derivative contracts that do not qualify for hedge accounting.

The following table summarizes the components of other income, ~~(expense),~~ net:

In thousands
Three Months Ended December 31, Six Months Ended December 31,
2021 2020 2021 2020
Gains (losses) on derivatives not designated as hedging instruments $ 6,481 $ (19,020) $ 19,808 $ (32,515)
Currency-related gains, net 5,551 1,809 5,874 5,884
Other gains 807 13 327 679
Total other income (expense), net $ 12,839 $ (17,198) $ 26,009 $ (25,952)


In thousands	Three Months Ended September 30,
		2022		2021
Gains on derivatives not designated as hedging instruments		$	28,645	$	13,327
Currency-related (losses) gains, net		(197)		323
Other losses		(1,051)		(480)
Total other income, net		$	27,397	$	13,170

The increase in other income, ~~(expense),~~ net was primarily due to the currency exchange rate volatility impacting our derivatives that are not designated as hedging instruments, of which our Euro and British Pound contracts are the most significant exposures that we economically hedge. ~~We also recognize the impact from de-designated interest swap contracts that are no longer highly effective, which resulted in unrealized losses during the current period.~~ We expect volatility to continue in future periods, as we do not apply hedge accounting for most of our derivative currency contracts.

We experienced currency-related gains due to currency exchange rate volatility on our non-functional currency intercompany relationships, which we may alter from time to time. The impact of certain cross-currency swap contracts designated as cash flow hedges is included in our currency-related (losses) gains, net, offsetting the impact of certain non-functional currency intercompany relationships.

Interest expense, net

Interest expense, net primarily consists of interest paid on outstanding debt balances, amortization of debt issuance costs, debt discounts, interest related to finance lease obligations and realized gains (losses) on effective interest rate swap contracts and certain cross-currency swap contracts.

Interest expense, net decreased by ~~$4.8~~$0.9 million ~~and $9.6 million, respectively,~~ during the three ~~and six~~ months ended ~~December 31, 2021,~~September 30, 2022, as compared to the prior year ~~periods. This is~~period, primarily due to ~~our Term Loan B refinancing during the fourth quarter of fiscal 2021 that resulted~~an increase in ~~a reduction to our weighted-average~~ interest ~~rate~~income earned on our ~~outstanding borrowings.~~cash and marketable securities that more than offset the increase to interest expense that was driven by higher interest rates.

Income tax expense


In thousands	In thousands	Three Months Ended December 31,				Six Months Ended December 31,									In thousands		Three Months Ended September 30,
			2021			2020			2021			2020						2022			2021
Income tax expense	Income tax expense		$	17,298		$	12,954		$	26,679		$	19,748			Income tax expense		$	9,365		$	9,381
Effective tax rate	Effective tax rate		23.6		%	27.6		%	34.3		%	45.3		%		Effective tax rate		(60.9)		%	212.2		%

Income tax expense for the three ~~and six~~ months ended ~~December 31, 2021 increased~~September 30, 2022 decreased versus the prior comparative ~~periods~~period due to ~~increased pre-tax profits and a less favorable mix of earnings.~~decreased profits.

We believe that our income tax reserves are adequately maintained by taking into consideration both the technical merits of our tax return positions and ongoing developments in our income tax audits. However, the final

determination of our tax return positions, if audited, is uncertain and therefore there is a possibility that final resolution of these matters could have a material impact on our results of operations or cash flows. Refer to Note 109 in our accompanying consolidated financial statements for additional discussion.

Reportable Segment Results

Our segment financial performance is measured based on segment EBITDA, which is defined as operating income plus depreciation and amortization; plus proceeds from insurance; plus share-based compensation expense related to investment consideration; plus earn-out related charges; plus certain impairments; plus restructuring related charges; less gain on purchase or sale of subsidiaries.

Vista

In thousands
Three Months Ended December 31, Six Months Ended December 31,
2021 2020 2021 vs. 2020 2021 2020 2021 vs. 2020
Reported Revenue $ 448,114 $ 431,076 4% $ 797,594 $ 760,367 5%
Segment EBITDA 92,689 112,331 (17)% 160,728 202,488 (21)%
% of revenue 21 % 26 % 20 % 27 %
During the fourth quarter of fiscal year 2022, we revised our internal reporting to reallocate certain third-party technology costs that were previously held within our Central and corporate costs to our Vista business and reportable segment. These include certain third-party costs that are variable in nature and the cost variability is primarily driven by decisions or volumes in the Vista business. We revised our presentation of all prior periods presented to reflect our updated segment reporting, which decreased both Vista segment EBITDA and Central and corporate costs by $1.1 million for the three months ended September 30, 2021.


In thousands	Three Months Ended September 30,
		2022			2021			2022 vs. 2021
Reported Revenue		$	369,369		$	349,480		6%
Segment EBITDA		30,737			66,920			(54)%
% of revenue		8		%	19		%

Segment Revenue

Vista's reported revenue growth for the three months ended ~~December 31, 2021~~September 30, 2022 was negatively affected by a currency impact of ~~1%, while currency had an insignificant effect on the segment's~~4%. Vista's organic constant-currency revenue growth ~~during the six months ended December 31, 2021. When~~was 8% when excluding the benefit from the recent acquisition of ~~Depositphotos, Vista's organic constant-currency~~Depositphotos. Constant-currency growth remained strong throughout the quarter in Europe, and in North America, revenue growth was 3%soft in July but accelerated to double-digit growth in August and ~~2%, respectively. Vista's revenue~~September, largely driven by the compounding benefits of our new platform and year-over-year pricing increases. From a product perspective, the strongest growth was ~~driven by product~~in the categories ~~such as business cards, signage,~~of promotional products, apparel, and gifts (PPAG), marketing materials, signage and ~~promotional products. Business cards and small format marketing materials revenue improved year over year, but were still below pre-pandemic levels. Growth in these product categories~~business cards. Revenue growth was ~~partially offset~~negatively impacted by a decline in ~~consumer product~~face mask sales of $5.0 millionyear over year during the seasonal peak, with Europe lagging other regions. In addition, revenue related to customized face masks represented less than 1% of segment revenue during the current quarter as opposed to 6% in the prior period as the demand for pandemic-related products declined. Vista's results in Europe continue to lag behind North America and Australia when comparing to pre-pandemic levels.

year.

Segment Profitability

For the three ~~and six~~ months ended ~~December 31, 2021,~~September 30, 2022, segment EBITDA declined by ~~$19.2~~$36.2 million. The decrease to segment EBITDA continues to be driven by the impact of higher investment levels. Gross profit declined slightly year-over-year as higher revenue, including from price increases, was more than offset by cost inflation and negative currency impacts; however, gross profit increased when excluding the year-over-year currency impact. Vista's advertising expense increased by $20.0 million, ~~and $41.2 million, respectively, largely~~ driven by higher mid- and upper-funnel advertising which we are testing in certain markets as we believe it may improve awareness and consideration with customers and prospects, as well as reduce our reliance on paid search advertising.

There were also increased operating expenses of $13.2 million, driven mainly by $7.3 million of higher organic compensation costs related primarily to growth investments including the hiring of talent, especially in user experience, design, product management, and data ~~& analytics.~~and analytics, as well as the impacts of inflation-adjusted merit increases effective July 1, 2022, that were larger than recent years. These organic investments are in support of Vista's multi-year transformation journey to become the expert design and marketing partner to the world's small businesses. ~~Additionally, Vista's advertising~~This year-over-year increase in compensation costs was smaller than for the fourth quarter of fiscal year 2022 as we significantly curtailed additional hiring in the current quarter. The increased expense ~~increased by $6.4 million and $19.3 million, respectively, driven~~from investment in part by expanded performance advertising payback thresholds, which were more constrained during the prior-year periods when the effects of the pandemic on this segment were more severe. Inflationary input and labor costs were mostlyheadcount was partially offset by ~~price increases and efficiency gains. The decline~~the benefit of recent restructuring actions.

Increased investment in ~~profitability was~~our acquired VistaCreate (Depositphotos) business also affected by government subsidy benefits in the prior comparative periods of $2.4 million and $4.9 million, respectively, which did not recur during the three and six months ended December 31, 2021. Additionally,negatively impacted Vista's segment EBITDA ~~was reduced~~results by $3.9 million and $6.0 million for the three and six months ended December 31, 2021, respectively, due to the combined impact of 99designs (acquired on October 1, 2020) and Depositphotos (acquired on October 1, 2021) and related investment.approximately $2.1 million.

PrintBrothers


In thousands	In thousands	Three Months Ended December 31,							Six Months Ended December 31,								In thousands		Three Months Ended September 30,
			2021			2020				2021 vs. 2020	2021			2020			2021 vs. 2020			2022			2021			2022 vs. 2021
Reported Revenue	Reported Revenue		$	137,694		$	121,806			13%	$	263,051		$	221,918		19%	Reported Revenue		$	132,699		$	125,357		6%
Segment EBITDA	Segment EBITDA		18,605			16,457				13%	34,888			26,172			33%	Segment EBITDA		14,991			16,283			(8)%
% of revenue	% of revenue		14		%	14		%			13		%	12		%		% of revenue		11		%	13		%

Segment Revenue

PrintBrothers' reported revenue growth for the three ~~and six~~ months ended ~~December 31, 2021~~September 30, 2022 was negatively affected by a currency impact of ~~5% and 2%~~17%, ~~respectively,~~ resulting in a constant-currency revenue growth of ~~18% and 21%, respectively.~~23%. This ~~increase~~strong growth was driven by ~~signs~~the recent introduction of ~~overall economic recovery for our businesses in many of our European geographies, leveraging~~ new products, ~~introduced~~growth in ~~recent years,~~order volumes and price increases ~~made~~implemented to address supply chain challenges. Additionally, the PrintBrothers network and relative size allowed these businesses to address opportunities to meet customer demand when competition could not. We also benefited from the timing of elections in Germany during the first quarter of the current fiscal year, which drove sales of signage products, flyers and brochures.inflationary cost increases.

Segment Profitability

PrintBrothers' segment EBITDA during the three ~~and six~~ months ended ~~December 31, 2021,~~September 30, 2022, as compared to the prior ~~periods, increased despite increased input costs,~~period, decreased due to year-over-year currency fluctuations that had a negative impact of $2.1 million. Despite a challenging supply chain and inflationary environment, segment EBITDA grew year-over-year when excluding the impact of currency, driven by the constant-currency revenue growth described ~~above,~~above. We continue to invest in key areas within these businesses to exploit scale advantages and improve their cost competitiveness. These businesses also continue to adopt technologies that are part of our mass customization platform, which we believe will further improve customer value and the ~~higher margin impact~~efficiency of ~~new products, and improved efficiencies as~~each business over the ~~businesses in this segment better leverage their combined capabilities.~~long term.

The Print Group


In thousands	In thousands	Three Months Ended December 31,							Six Months Ended December 31,								In thousands		Three Months Ended September 30,
			2021			2020				2021 vs. 2020	2021			2020			2021 vs. 2020			2022			2021			2022 vs. 2021
Reported Revenue	Reported Revenue		$	90,130		$	76,204			18%	$	162,950		$	142,641		14%	Reported Revenue		$	76,823		$	72,820		6%
Segment EBITDA	Segment EBITDA		16,358			12,569				30%	30,747			24,752			24%	Segment EBITDA		12,220			14,389			(15)%
% of revenue	% of revenue		18		%	16		%			19		%	17		%		% of revenue		16		%	20		%

Segment Revenue

The Print Group's reported revenue for the three ~~and six~~ months ended ~~December 31, 2021~~September 30, 2022 was negatively affected by a currency impact of ~~5% and 2%~~18%, ~~respectively,~~ resulting in an increase into revenue on a constant-currency basis of ~~23% and16%, respectively, due~~24%. Constant-currency revenue growth was driven by price increases that have been implemented over the past year to ~~signs of overall economic recovery in many of the European countries in which we compete and leveraging new products introduced in recent years,~~address inflationary cost increases, as well as ~~pockets of pricing actions taken to mitigate inflationary cost pressures. During the first quarter of the current fiscal year we benefited~~volume growth from ~~the timing of elections in Italy, which drove demand for signage products, flyers~~several core product categories and ~~brochures.~~more recently introduced products.

Segment Profitability

The ~~increase~~decrease in The Print Group's segment EBITDA during the three ~~and six~~ months ended ~~December 31, 2021,~~September 30, 2022, as compared to the prior ~~periods,~~year, was ~~primarily~~ driven by negative impacts from year-over-year currency fluctuations of $2.1 million. Excluding the ~~constant-currency~~impact of currency, segment EBITDA was flat year-over-year as the benefits from the revenue growth described ~~above. In addition, The Print Group continues to benefit from the introduction of new products with~~above were largely offset by cost increases that included higher ~~margins, as well as improved efficiencies as the group better leverages its combined capabilities.~~input costs driven by ongoing supply chain disruptions and higher energy costs.

National Pen


In thousands	In thousands	Three Months Ended December 31,							Six Months Ended December 31,								In thousands	Three Months Ended September 30,
			2021			2020				2021 vs. 2020	2021			2020			2021 vs. 2020			2022			2021			2022 vs. 2021
Reported Revenue	Reported Revenue		$	124,717		$	114,692			9%	$	193,981		$	182,341		6%		Reported Revenue	$	81,666		$	69,264		18%
Segment EBITDA	Segment EBITDA		31,599			18,728				69%	23,551			8,057			192%		Segment EBITDA	(1,297)			(8,048)			(84)%
% of revenue	% of revenue		25		%	16		%			12		%	4		%			% of revenue	(2)		%	(12)		%

Segment Revenue

For the three ~~and six~~ months ended ~~December 31, 2021,~~September 30, 2022, National Pen's revenue growth was negatively affected by currency impacts of ~~2% and 1%~~6%, ~~respectively,~~ resulting in constant-currency revenue growth of ~~11%~~24%. Direct marketing, e-commerce, and ~~7%, respectively. National Pen has improved~~direct sales channels continued to collectively drive the revenue growth. Growth across ~~geographic markets and~~these channels ~~including web and mail order channels.~~was driven by price increases that have been implemented over the past year to address inflationary cost increases, as well as volume growth in core writing instruments. The ~~business has seen improvements in results due to businesses reopening and a return of in-person events in some markets, despite a~~year-over-year decline in face mask sales impacted National Pen's revenue ~~from pandemic-related products including masks produced on behalf~~by approximately $4.0 million, which was partially offset by a change in customer terms that positively impacted the timing of ~~other Cimpress businesses. Mask~~ revenue ~~as a percent of segment revenue, including the portion produced on behalf of other Cimpress businesses, decreased from 10% in the prior comparative quarter to 3% this period.~~recognition by $2.2 million.

Segment Profitability

The increase in National Pen's segment EBITDA for the three ~~and six~~ months ended ~~December 31, 2021~~September 30, 2022 was ~~due in part to the revenue increase described above, as well as improvements in gross profit~~ driven by the combination of strong revenue growth, gross margin expansion, a ~~normalized mix~~timing-related decrease in advertising as a percent of ~~products~~revenue, limited operating expense growth, and ~~decline~~savings from the recent decision to shut down its operations in lower-margin pandemic-related products. National Pen also made permanent cost reductions during the past year, which benefited segment EBITDA year over year. The increased profitability was also caused by the non-recurrence of the prior period's inventory reserve to reduce the carrying value of disposable masks held in inventory to market prices of $4.4 million and $5.4 million, respectively.Japan.

All Other Businesses


In thousands	In thousands	Three Months Ended December 31,							Six Months Ended December 31,								In thousands			Three Months Ended September 30,
			2021			2020				2021 vs. 2020	2021			2020			2021 vs. 2020				2022			2021			2022 vs. 2021
Reported Revenue	Reported Revenue		$	57,719		$	55,365			4%	$	105,590		$	98,843		7	%	Reported Revenue		$	51,827		$	47,871		8%
Segment EBITDA	Segment EBITDA		6,264			10,657				(41)%	11,155			19,266			(42)	%	Segment EBITDA		6,178			4,891			26%
% of revenue	% of revenue		11		%	19		%			11		%	19		%			% of revenue		12		%	10		%

This segment consists of BuildASign, which is a larger and profitable business, and ~~two~~Printi, an early-stage ~~businesses~~business that we ~~continue to manage~~have managed at a relatively modest operating loss as previously described and planned. ~~We expect fluctuations in growth as each of their business models evolve in function of customer feedback, testing, and entrepreneurial pivoting.~~

Segment Revenue

All Other Businesses' constant-currency revenue growth ~~excluding the impact of acquisitions,~~ was ~~flat~~8% during the three months ended ~~December 31, 2021 as we lapped last year's high-demand period for~~September 30, 2022. BuildASign's signage products grew at double-digit rates, with a modest decline in home decor ~~products~~products. Printi delivered strong revenue growth in the ~~BuildASign business. For the six months ended December 31, 2021, constant-currency revenue growth, excluding the impact~~first quarter of ~~acquisitions, increased by 2% driven by recovery of demand for both our Printi business~~fiscal year 2023 across product lines and ~~signage products offered by BuildASign.~~

channels.

Segment Profitability

The ~~decrease~~increase in segment EBITDA for the three ~~and six~~ months ended ~~December 31, 2021~~September 30, 2022 was due to higher revenue and increased marketing efficiencies at both businesses. As Printi grows, it continues to increase gross margins and contribution margins, driving closer to delivering a ~~combination~~positive contribution to segment EBITDA.

During the fourth quarter of ~~factors including inflationary pressures on input costs including shipping, materials and labor~~fiscal year 2022, we decided to divest our small, loss-making business in China (YSD), which is reported as part of this segment. We expect this divestiture to be completed during the second quarter of the current ~~periods as well as less efficient advertising relative~~fiscal year. Our loss was lower this quarter due to the ~~prior year.~~decreased operating expenses as we prepared to divest the business.

Central and Corporate Costs

During the fourth quarter of fiscal year 2022, we revised our internal reporting to reallocate certain third-party technology costs that were previously held within our Central and corporate costs to our Vista business. We

have revised our presentation of all prior periods presented to reflect our revised segment reporting. Refer to Note 11 in our accompanying consolidated financial statements for additional details.

Central and corporate costs increased by ~~$5.6~~$0.4 million ~~and $9.9 million, respectively,~~ during the three ~~and six~~ months ended ~~December 31, 2021,~~September 30, 2022, as compared to the prior ~~year periods,~~period, due to ~~the prior year timing~~compensation increases as a result of our inflation-adjusted annual share-based compensation grant, as well as the end of temporary cost-control measures from the year-ago period which drove a year-over-year increase in corporate costs. In addition, our continued investmentsmerit cycle, hiring in our mass customization platform, ~~through additional hiring in cost-efficient talent markets,~~ and ~~an uplift in demand contributed~~volume-related increases to ~~higher~~ central operating ~~costs~~costs. Partially offsetting the compensation increases were savings from actions taken in the fourth quarter of fiscal 2022 to reduce headcount. In addition, unallocated share-based compensation was lower versus the prior year, ~~over year.~~due in part because we granted RSUs and share options instead of PSUs in the current quarter.

Liquidity and Capital Resources

Consolidated Statements of Cash Flows Data
In thousands
Six Months Ended December 31,
2021 2020
Net cash provided by operating activities $ 179,911 $ 256,168
Net cash used in investing activities (77,281) (76,677)
Net cash used in financing activities (49,357) (191,754)


In thousands	Three Months Ended September 30,
	2022		2021
Net cash (used in) provided by operating activities	$	(25,251)	$	36,567
Net cash used in investing activities	(101,043)		(13,181)
Net cash used in financing activities	(11,780)		(10,351)

The cash flows during the ~~six~~three months ended ~~December 31, 2021~~September 30, 2022 related primarily to the following items:

Cash inflows:

•~~Net income of $51.2 million~~

•Adjustments for non-cash items of ~~$86.2~~$37.9 million primarily related to ~~positive~~ adjustments for depreciation and amortization of ~~$89.7~~$40.9 million and share-based compensation costs of ~~$23.5 million, and deferred taxes of $4.0~~$10.6 million, which were partially offset by negative adjustments for unrealized currency-related gains of ~~$29.3~~$14.8 million, and deferred taxes of $1.0 million

•~~Total net working capital impacts~~Cash proceeds from derivative contracts of ~~$42.5~~$14.6 million, ~~were a source~~which includes $7.8 million from the early termination of ~~cash. Accounts payable and accrued expense inflows were partially offset by inventory, accounts receivable and other asset outflows~~certain contracts

•Proceeds from the maturity of held-to-maturity securities of ~~$27.0~~$10.0 million

Cash outflows:

•~~Acquisition~~Net loss of ~~Depositphotos~~$24.7 million

•Purchase of held-to-maturity securities for ~~$68.9~~$84.0 million

•Total net working capital impacts of ~~cash acquired and~~$38.4 million were a use of cash. The majority of this change in net working capital is impacted by increases to inventory that is held to mitigate the ~~deferred payment and post-closing adjustment,~~risk of ~~which the majority is payable in October 2022~~supply availability due to ongoing supply chain disruptions

•Internal and external costs of ~~$32.1~~$15.3 million for software and website development that we have capitalized

•Capital expenditures of ~~$26.5~~$11.8 million of which the majority related to the purchase of manufacturing and automation equipment for our production facilities

•~~Payments for debt~~$3.7 million of ~~$7.7 million~~distributions to noncontrolling interest holders

•~~Purchase and sale~~Repayments of ~~a previously leased facility that resulted in a~~debt, net ~~payment~~ of ~~$4.7~~proceeds from debt, for $3.3 million ~~due to our exercise of the lease purchase option and subsequent sale~~

•Payments for finance lease arrangements ~~excluding the payment associated with the purchase option exercise included above,~~ of ~~$5.2~~$2.4 million

•~~A $4.0 million distribution to noncontrolling interest holders~~

•Payment of withholding taxes in connection with share awards of ~~$2.9~~$2.2 million

•~~Payment for the settlement of a derivative designated as a net investment hedge of $1.9 million~~

•~~Financing fees of $1.4 million from our fourth quarter fiscal year 2021 credit facility amendment that we have capitalized~~

Additional Liquidity and Capital Resources Information. At ~~December 31, 2021,~~September 30, 2022, we had ~~$231.2~~$132.1 million of cash and cash equivalents, ~~$174.9~~$124.2 million of marketable securities and ~~$1,739.4~~$1,683.0 million of debt, excluding debt issuance costs and debt premiums and discounts. During the three ~~and six~~ months ended ~~December 31, 2021,~~September 30, 2022, we

financed our operations and strategic investments through internally generated cash flows from operations and cash on hand. We expect to finance our future operations through our cash, investments, operating cash flow and borrowings under our debt arrangements.

Noncontrolling Interests. The put options for several of our noncontrolling interests are exercisable during the first half of fiscal year 2023. Exercising a put option is at the discretion of each noncontrolling interest holder, which creates uncertainty around the timing of our cash outflow should an option be exercised. The total estimated redemption value for these noncontrolling interests' put options as of September 30, 2022 is $89.0 million, of which $4.7 million has already been exercised in the second quarter of fiscal 2023. Refer to Note 10 in our accompanying consolidated financial statements for additional details.

Indefinitely Reinvested Earnings. As of ~~December 31, 2021,~~September 30, 2022, a portion of our cash and cash equivalents were held by our subsidiaries, and undistributed earnings of our subsidiaries that are considered to be indefinitely reinvested were ~~$45.9~~$49.7 million. We do not intend to repatriate these funds as the cash and cash equivalent balances are generally used and available, without legal restrictions, to fund ordinary business operations and investments of the respective subsidiaries. If there is a change in the future, the repatriation of undistributed earnings from certain subsidiaries, in the form of dividends or otherwise, could have tax consequences that could result in material cash outflows.

Contractual Obligations

Contractual obligations at ~~December 31, 2021~~September 30, 2022 are as follows:


In thousands	In thousands	Payments Due by Period										In thousands	Payments Due by Period
		Total		Less than 1 year		1-3 years		3-5 years		More than 5 years			Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Operating leases, net of subleases (1)	Operating leases, net of subleases (1)	$	90,535	$	29,602	$	40,164	$	15,039	$	5,730	Operating leases, net of subleases (1)	$	67,132	$	23,189	$	27,070	$	8,142	$	8,731
Purchase commitments	Purchase commitments	306,904		194,305		84,100		28,498		—		Purchase commitments	251,010		137,201		99,476		14,333		—
Senior unsecured notes and interest payments	Senior unsecured notes and interest payments	789,000		42,000		84,000		663,000		—		Senior unsecured notes and interest payments	768,000		42,000		84,000		642,000		—
Senior secured credit facility and interest payments (2)	Senior secured credit facility and interest payments (2)	1,442,959		64,441		122,955		117,601		1,137,962		Senior secured credit facility and interest payments (2)	1,410,602		71,425		144,679		137,085		1,057,413
Other debt	Other debt	10,429		3,320		5,230		1,837		42		Other debt	6,698		2,499		3,867		332		—
Finance leases, net of subleases (1)	Finance leases, net of subleases (1)	15,539		6,308		7,044		2,122		65		Finance leases, net of subleases (1)	15,070		5,490		7,321		2,168		91
Other	Other	52,677		52,677		—		—		—		Other	8,463		8,463		—		—		—
Total (3)	Total (3)	$	2,708,043	$	392,653	$	343,493	$	828,097	$	1,143,799	Total (3)	$	2,526,975	$	290,267	$	366,413	$	804,060	$	1,066,235

___________________

(1) Operating and finance lease payments above include only amounts which are fixed under lease agreements. Our leases may also incur variable expenses which are not reflected in the contractual obligations above.

(2) Senior secured credit facility and interest payments include the effects of interest rate swaps, whether they are expected to be payments or receipts of cash.

(3) We may be required to make cash outlays related to our uncertain tax positions. However, due to the uncertainty of the timing of future cash flows associated with our uncertain tax positions, we are unable to make reasonably reliable estimates of the period of cash settlement, if any, with the respective taxing authorities. Accordingly, uncertain tax positions of $9.1 million as of ~~December 31, 2021~~September 30, 2022 have been excluded from the contractual obligations table above. See Note 109 in our accompanying consolidated financial statements for further information on uncertain tax positions.

Operating Leases. We rent office space under operating leases expiring on various dates through ~~2034.~~2037. The terms of certain lease agreements require security deposits in the form of bank guarantees and letters of credit, ~~in the amount of$2.0~~with $1.7 million in the ~~aggregate.~~aggregate outstanding as of September 30, 2022.

Purchase ~~Commitments~~Commitments.. At ~~December 31, 2021,~~September 30, 2022, we had unrecorded commitments under contract of ~~$306.9~~$251.0 million. Purchase commitments consisted of ~~third-party web services of $98.0 million, software of $117.4 million,~~ inventory, ~~and~~ third-party fulfillment and digital service purchase commitments of ~~$31.8 million,~~$86.7 million; third-party cloud services of $81.0 million; advertising of ~~$22.9 million,~~$15.2 million; software of $42.2 million; commitments for professional and consulting fees of ~~$4.6 million,~~$5.0 million; production and computer equipment purchases of ~~$21.2 million~~$6.0 million; and other unrecorded purchase commitments of ~~$11.1~~$14.9 million.

~~Debt.~~Senior Secured Credit Facility and Interest Payments. As of ~~December 31, 2021,~~September 30, 2022, we have borrowings under our ~~amended and restated senior secured credit agreement dated as~~Restated Credit Agreement of ~~May 17, 2021 (the "Restated Credit Agreement") of $1,129.0~~$1,076.3 million consisting of the Term Loan B, which amortizes over the loan period, with a final maturity date of May 17, 2028. Our $250.0 million revolver under our Restated Credit

Agreement has ~~$243.7~~$243.8 million unused as of ~~December 31, 2021.~~September 30, 2022. There are no drawn amounts on the revolver, but our outstanding letters of credit reduce our unused balance. Our unused balance can be drawn at any time so long as we are in compliance with our debt ~~covenants.~~covenants, and any amounts drawn under the revolver will be due on May 17, 2026. Interest payable included in the above table is based on the interest rate as of June 30, 2022 and assumes all LIBOR-based revolving loan amounts outstanding will not be paid until maturity but that the term loan amortization payments will be made according to our defined schedule.

Senior Unsecured Notes and Interest Payments. Our $600.0 million of 2026 Notes bear interest at a rate of 7.0% per annum and mature on June 15, 2026. Interest on the notes is payable semi-annually on June 15 and December 15 of each year and has been included in the table above.

~~Senior Secured Credit Facility and Interest Payments.~~ At December 31, 2021, the Term Loan B of $1,129.0 million outstanding under our Restated Credit Agreement had repayments due on various dates through May 17, 2028, and we did not have any amounts drawn under our Revolving Credit Facility due on May 17, 2026. Interest payable included in this table is based on the interest rate as of December 31, 2021, and assumes all LIBOR-based revolving loan amounts outstanding will not be paid until maturity, but that the term loan amortization payments will be made according to our defined schedule.

Debt Covenants. The Restated Credit Agreement and the indenture that governs our 7.0% Senior Notes due 2026 contain covenants that restrict or limit certain activities and transactions by Cimpress and our subsidiaries. As of ~~December 31, 2021,~~September 30, 2022, we were in compliance with all covenants under our Restated Credit Agreement and the indenture governing our 2026 Notes. Refer to Note 98 in our accompanying consolidated financial statements for additional information.

Other Debt. In addition, we have other debt which consists primarily of term loans acquired through our various acquisitions or used to fund certain capital investments. As of ~~December 31, 2021,~~September 30, 2022, we had ~~$10.4~~$6.7 million outstanding for those obligations that have repayments due on various dates through ~~January 2026.~~March 2027.

Finance Leases. We lease certain machinery and plant equipment under finance lease agreements that expire at various dates through ~~2034.~~2028. The aggregate carrying value of the leased equipment under finance leases included in property, plant and equipment, net in our consolidated balance sheet at ~~December 31, 2021~~September 30, 2022 is ~~$20.6~~$19.3 million, net of accumulated depreciation of ~~$43.1~~$38.2 million. The present value of lease installments not yet due included in other current liabilities and other liabilities in our consolidated balance sheet at ~~December 31, 2021~~September 30, 2022 amounts to ~~$24.2~~$21.1 million.

Other Obligations. Other obligations ~~include~~consist of deferred payments ~~related~~relating to previous acquisitions, ~~of $52.7 million in the aggregate. This balance includes~~including the deferred payment ~~related to the 99designs acquisition totaling $43.7 million. The remaining liability includes deferred payments related~~relating to our Depositphotos acquisition ~~of Depositphotos which are~~that is payable in ~~January and~~ October ~~2022. Refer~~2022, subject to ~~Note 7 in the accompanying consolidated financial statements for additional details.~~any outstanding indemnification claims.

Additional Non-GAAP Financial Measures

Adjusted EBITDA and adjusted free cash flow presented below, and constant-currency revenue growth and constant-currency revenue growth excluding acquisitions/divestitures presented in the consolidated results of operations section above, are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. Adjusted EBITDA is defined as GAAP operating income plus depreciation and amortization plus share-based compensation expense plus proceeds from insurance plus earn-out related charges plus certain impairments plus restructuring related charges plus realized gains or losses on currency derivatives less ~~interest expense related to our Waltham, Massachusetts office lease less~~ gain on purchase or sale of subsidiaries.

Adjusted EBITDA is the primary profitability metric by which we measure our consolidated financial performance and is provided to enhance investors' understanding of our current operating results from the

underlying and ongoing business for the same reasons it is used by management. For example, as we have become more acquisitive over recent years we believe excluding the costs related to the purchase of a business (such as amortization of acquired intangible assets, contingent consideration, or impairment of goodwill) provides further insight into the performance of the underlying acquired business in addition to that provided by our GAAP operating income. As another example, as we do not apply hedge accounting for certain derivative contracts, we believe inclusion of realized gains and losses on these contracts that are intended to be matched against operational currency fluctuations provides further insight into our operating performance in addition to that provided by our GAAP operating income. We do not, nor do we suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Adjusted free cash flow is the primary financial metric by which we set quarterly and annual budgets both for individual businesses and Cimpress-wide. Adjusted free cash flow is defined as net cash provided by operating activities less purchases of property, plant and equipment, purchases of intangible assets not related to acquisitions, and capitalization of software and website development costs that are included in net cash used in investing activities, plus the payment of contingent consideration in excess of acquisition-date fair value and gains on

proceeds from insurance that are included in net cash provided by operating activities, if any. We use this cash flow metric because we believe that this methodology can provide useful supplemental information to help investors better understand our ability to generate cash flow after considering certain investments required to maintain or grow our business, as well as eliminate the impact of certain cash flow items presented as operating cash flows that we do not believe reflect the cash flow generated by the underlying business.

Our adjusted free cash flow measure has limitations as it may omit certain components of the overall cash flow statement and does not represent the residual cash flow available for discretionary expenditures. For example, adjusted free cash flow does not incorporate our cash payments to reduce the principal portion of our debt or cash payments for business acquisitions. Additionally, the mix of property, plant and equipment purchases that we choose to finance may change over time. We believe it is important to view our adjusted free cash flow measure only as a complement to our entire consolidated statement of cash flows.

The table below sets forth operating income and adjusted EBITDA for the three ~~and six~~ months ended ~~December 31, 2021~~September 30, 2022 and ~~2020:~~2021:


In thousands	In thousands	Three Months Ended December 31,				Six Months Ended December 31,				In thousands	Three Months Ended September 30,
		2021		2020		2021		2020				2022		2021
GAAP operating income		$	85,981	$	94,194	$	102,920	$	130,180
GAAP operating (loss) income										GAAP operating (loss) income		$	(17,967)	$	16,939
Exclude expense (benefit) impact of:	Exclude expense (benefit) impact of:									Exclude expense (benefit) impact of:
Depreciation and amortization	Depreciation and amortization	45,314		43,597		89,746		85,887		Depreciation and amortization		40,942		44,432

Share-based compensation expense	Share-based compensation expense	12,505		5,243		23,511		13,526		Share-based compensation expense		10,475		11,006

Certain impairments and other adjustments ~~(1)~~	Certain impairments and other adjustments ~~(1)~~	(2,713)		(215)		(3,493)		568		Certain impairments and other adjustments ~~(1)~~		3,456		(780)
Restructuring-related charges	Restructuring-related charges	307		2,182		(2)		2,096		Restructuring-related charges		1,820		(309)

Realized (losses) gains on currency derivatives not included in operating income (2)		674		(1,578)		(2,998)		(361)
Realized gains (losses) on currency derivatives not included in operating (loss) income (1)										Realized gains (losses) on currency derivatives not included in operating (loss) income (1)		6,869		(3,672)
Adjusted EBITDA	Adjusted EBITDA	$	142,068	$	143,423	$	209,684	$	231,896	Adjusted EBITDA		$	45,595	$	67,616

_________________

(1) Certain impairments and other adjustments includes gains or losses on disposal of property, plant and equipment, net of cash received, as well as routine impairments of capitalized software. During the three and six months ended December 31, 2021, we included a gain of $3,324 for the purchase and sale of a previously leased facility, which was impaired in the prior fiscal year and is resulting in a gain in the current period. Refer to Note 2 for additional details regarding the purchase and sale of this facility.

~~(2)~~ These realized gains (losses) ~~gains~~ include only the impacts of certain currency ~~derivatives~~derivative contracts that are intended to hedge our exposure to foreign currencies for which we do not apply hedge accounting. See Note 4 in our accompanying consolidated financial statements for further information.

The table below sets forth net cash provided by operating activities and adjusted free cash flow for the ~~six~~three months ended ~~December 31, 2021~~September 30, 2022 and ~~2020:~~2021:


In thousands	In thousands	Six Months Ended December 31,			In thousands			Three Months Ended September 30,
			2021			2020				2022		2021
Net cash provided by operating activities (1)			$	179,911		$	256,168
Net cash (used in) provided by operating activities (1)									Net cash (used in) provided by operating activities (1)	$	(25,251)	$	36,567
Purchases of property, plant and equipment	Purchases of property, plant and equipment		(26,539)			(16,790)			Purchases of property, plant and equipment	(11,758)		(8,624)

Purchases of intangible assets not related to acquisitions									Purchases of intangible assets not related to acquisitions	—		—
Capitalization of software and website development costs	Capitalization of software and website development costs		(32,134)			(26,445)			Capitalization of software and website development costs	(15,330)		(15,639)

Adjusted free cash flow	Adjusted free cash flow		$	121,238		$	212,933		Adjusted free cash flow	$	(52,339)	$	12,304

_________________

(1) The decrease of net cash provided by operating activities was driven by the decrease in operating income as described earlier in this section, as well as unfavorable ~~year-over-year impacts from~~ changes in working capital due largely to increased inventory levels intended to mitigate supply chain risks during our seasonally significant ~~cash preservation measures in place during the prior comparative period.~~

second quarter.

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Item ~~7A.~~3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk. Our exposure to interest rate risk relates primarily to our cash, cash equivalents and debt.

As of ~~December 31, 2021,~~September 30, 2022, our cash and cash equivalents consisted of standard depository accounts which are held for working capital purposes, money market funds, and marketable securities with an original maturity of less than 90 days. We do not believe we have a material exposure to interest rate fluctuations related to our cash and cash equivalents.

As of ~~December 31, 2021,~~September 30, 2022, we had $~~1,129~~1,076 million of variable-rate debt. As a result, we have exposure to market risk for changes in interest rates related to these obligations. In order to mitigate our exposure to interest rate changes related to our variable rate debt, we execute interest rate swap contracts to fix the interest rate on a portion of our outstanding or forecasted long-term debt with varying maturities. As of ~~December 31, 2021,~~September 30, 2022, a hypothetical 100 basis point increase in rates, inclusive of our outstanding interest rate swaps that are accruing interest as of September 30, 2022, would result in a ~~$4.3~~$7.0 million impact to interest expense over the next 12 months.

Currency Exchange Rate Risk. We conduct business in multiple currencies through our worldwide operations but report our financial results in U.S. dollars. We manage these currency risks through normal operating activities and, when deemed appropriate, through the use of derivative financial instruments. We have policies governing the use of derivative instruments and do not enter into financial instruments for trading or speculative purposes. The use of derivatives is intended to reduce, but does not entirely eliminate, the impact of adverse currency exchange rate movements. A summary of our currency risk is as follows:

•Translation of our non-U.S. dollar revenues and expenses: Revenue and related expenses generated in currencies other than the U.S. dollar could result in higher or lower net ~~income~~loss when, upon consolidation, those transactions are translated to U.S. dollars. When the value or timing of revenue and expenses in a given currency are materially different, we may be exposed to significant impacts on our net ~~income~~loss and non-GAAP financial metrics, such as adjusted EBITDA.

Our currency hedging objectives are targeted at reducing volatility in our forecasted U.S. dollar-equivalent adjusted EBITDA in order to maintain stability on our incurrence-based debt covenants. Since adjusted EBITDA excludes non-cash items such as depreciation and amortization that are included in net ~~income,~~loss, we may experience increased, not decreased, volatility in our GAAP results due to our hedging approach. Our most significant net currency exposures by volume are in the Euro and British Pound.

In addition, we elect to execute currency derivatives contracts that do not qualify for hedge accounting. As a result, we may experience volatility in our consolidated statements of operations due to (i) the impact of unrealized gains and losses reported in other income, ~~(expense),~~ net, on the mark-to-market of outstanding contracts and (ii) realized gains and losses recognized in other income, ~~(expense),~~ net, whereas the offsetting economic gains and losses are reported in the line item of the underlying activity, for example, revenue.

•Translation of our non-U.S. dollar assets and liabilities: Each of our subsidiaries translates its assets and liabilities to U.S. dollars at current rates of exchange in effect at the balance sheet date. The resulting gains and losses from translation are included as a component of accumulated other comprehensive loss on the consolidated balance sheet. Fluctuations in exchange rates can materially impact the carrying value of our assets and liabilities.

We have currency exposure arising from our net investments in foreign operations. We enter into currency derivatives to mitigate the impact of currency rate changes on certain net investments.

•Remeasurement of monetary assets and liabilities: Transaction gains and losses generated from remeasurement of monetary assets and liabilities denominated in currencies other than the functional currency of a subsidiary are included in other income, ~~(expense),~~ net, on the consolidated statements of operations. Certain of our subsidiaries hold intercompany loans denominated in a currency other than their functional currency. Due to the significance of these balances, the revaluation of intercompany loans can have a material impact on other income, ~~(expense),~~ net. We expect these impacts may be volatile in the

future, although our largest intercompany loans do not have a U.S. dollar cash impact for the consolidated group because they

are either 1) U.S. dollar loans or 2) we elect to hedge certain non-U.S. dollar loans with cross-currency swaps and forward contracts. A hypothetical 10% change in currency exchange rates was applied to total net monetary assets denominated in currencies other than the functional currencies at the balance sheet dates to compute the impact these changes would have had on our income before taxes in the near term. The balances are inclusive of the notional value of any cross-currency swaps designated as cash flow hedges. A hypothetical decrease in exchange rates of 10% against the functional currency of our subsidiaries would have resulted in a change of ~~$4.8 million and $0.9~~$6.6 million on our ~~income~~loss before income taxes for the three months ended ~~December 31, 2021 and 2020, respectively.~~September 30, 2022.

Item ~~9A.~~4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~December 31, 2021.~~September 30, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of ~~December 31, 2021,~~September 30, 2022, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There were no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended ~~December 31, 2021~~September 30, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

~~Item 1.~~ ~~Legal Proceedings~~

The information required by this item is incorporated by reference to the information set forth in Item 1 of Part I, “Financial Statements - Note 13 — Commitments and Contingencies,” in the accompanying notes to the consolidated financial statements included in this Report.

Item 1A. Risk Factors

There have been no material changes with respect to the risk factors we disclosed in our Form 10-K for the fiscal year ended June 30, ~~2021.~~

2022.

Item 6. Exhibits and Financial Statement Schedules


Exhibit No.						Description
10.1						Form of Non-Qualified Share Option Agreement under our 2020 Equity Incentive Plan
31.1						Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Rule 13a-14(a)/15d-14(a), by Chief Executive Officer
31.2						Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Rule 13a-14(a)/15d-14(a), by Chief Financial Officer
32.1						Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Executive Officer and Chief Financial Officer
~~101~~

The following materials from this Annual Report on Form 10-Q, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Statements of Shareholder's Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements.~~104Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101)~~

4539

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~January~~October 27, 2022 Cimpress plc


			By:			/s/ Sean E. Quinn
						Sean E. Quinn
						Chief Financial Officer
						(Principal Financial and Accounting Officer)

4640


Consolidated Statements of Operations	Year ended June 30, 2021
	Reported		Adjustments		Revised
Other income (expense), net	$	(11,835)	$	(7,518)	$	(19,353)
Loss before income taxes	(56,036)		(7,518)		(63,554)
Net loss	(74,939)		(7,518)		(82,457)
Net loss attributable to Cimpress plc	(77,711)		(7,518)		(85,229)
Net loss per share attributable to Cimpress plc:
Basic	$	(2.99)	$	(0.29)	$	(3.28)
Diluted	$	(2.99)	$	(0.29)	$	(3.28)

Consolidated Statements of Comprehensive (Loss) Income	Year ended June 30, 2021
	Reported		Adjustments		Revised
Net loss	$	(74,939)	$	(7,518)	$	(82,457)
Foreign currency translation losses, net of hedges	5,397		7,518		12,915

Consolidated Statements of Shareholders' Equity (Deficit)	Year ended June 30, 2021
	Reported		Adjustments		Revised
Net loss attributable to Cimpress plc	$	(77,711)	$	(7,518)	$	(85,229)
Foreign currency translation, net of hedges	3,765		7,518		11,283

Consolidated Statements of Cash Flows	Year ended June 30, 2021
	Reported		Adjustments		Revised
Net loss	$	(74,939)	$	(7,518)	$	(82,457)
Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency	(7,278)		7,518		240


Consolidated Statements of Operations	Three months ended December 30, 2020
	Reported		Adjustments		Revised
Revenue	$	786,145	$	(5,241)	$	780,904
Cost of revenue	385,979		(5,241)		380,738

	Six months ended December 31, 2020
	Reported		Adjustments		Revised
Revenue	$	1,372,645	$	(5,241)	$	1,367,404
Cost of revenue	684,823		(5,241)		679,582


	(Losses) gains on cash flow hedges (1)		(Losses) gains on pension benefit obligation		Translation adjustments, net of hedges (2)		Total
Balance as of June 30, 2021	$	(23,831)	$	(1,735)	$	(45,916)	$	(71,482)
Other comprehensive income (loss) before reclassifications (3)	(4,423)		444		4,820		841
Amounts reclassified from accumulated other comprehensive loss to net income	13,314		—		—		13,314
Net current period other comprehensive income (loss)	8,891		444		4,820		14,155
Balance as of December 31, 2021	$	(14,940)	$	(1,291)	$	(41,096)	$	(57,327)


	Three Months Ended December 31, 2021
	Vista		PrintBrothers		The Print Group		National Pen		All Other		Total
Revenue by Geographic Region:
North America	$	289,615	$	—	$	—	$	57,976	$	51,035	$	398,626
Europe	117,627		137,173		87,596		53,797		—		396,193
Other	39,767		—		—		9,229		5,901		54,897
Inter-segment	1,105		521		2,534		3,715		783		8,658
Total segment revenue	448,114		137,694		90,130		124,717		57,719		858,374
Less: inter-segment elimination	(1,105)		(521)		(2,534)		(3,715)		(783)		(8,658)
Total external revenue	$	447,009	$	137,173	$	87,596	$	121,002	$	56,936	$	849,716


	Six Months Ended December 31, 2021
	Vista		PrintBrothers		The Print Group		National Pen		All Other		Total
Revenue by Geographic Region:
North America	$	534,064	$	—	$	—	$	99,014	$	92,343	$	725,421
Europe	189,160		262,301		158,751		74,648		—		684,860
Other	72,563		—		—		12,762		11,709		97,034
Inter-segment	1,807		750		4,199		7,557		1,538		15,851
Total segment revenue	797,594		263,051		162,950		193,981		105,590		1,523,166
Less: inter-segment elimination	(1,807)		(750)		(4,199)		(7,557)		(1,538)		(15,851)
Total external revenue	$	795,787	$	262,301	$	158,751	$	186,424	$	104,052	$	1,507,315


	Three Months Ended December 31, 2020
	Vista		PrintBrothers		The Print Group		National Pen		All Other		Total
Revenue by Geographic Region:
North America	$	268,736	$	—	$	—	$	48,678	$	49,662	$	367,076
Europe	126,877		121,564		69,343		47,578		—		365,362
Other	34,792		—		—		8,699		4,975		48,466
Inter-segment	671		242		6,861		9,737		728		18,239
Total segment revenue	431,076		121,806		76,204		114,692		55,365		799,143
Less: inter-segment elimination	(671)		(242)		(6,861)		(9,737)		(728)		(18,239)
Total external revenue	$	430,405	$	121,564	$	69,343	$	104,955	$	54,637	$	780,904


	Six Months Ended December 31, 2020
	Vista		PrintBrothers		The Print Group		National Pen		All Other		Total
Revenue by Geographic Region:
North America	$	500,831	$	—	$	—	$	78,999	$	88,606	$	668,436
Europe	204,125		221,505		129,721		68,182		—		623,533
Other	54,318		—		—		12,347		8,770		75,435
Inter-segment	1,093		413		12,920		22,813		1,467		38,706
Total segment revenue	760,367		221,918		142,641		182,341		98,843		1,406,110
Less: inter-segment elimination	(1,093)		(413)		(12,920)		(22,813)		(1,467)		(38,706)
Total external revenue	$	759,274	$	221,505	$	129,721	$	159,528	$	97,376	$	1,367,404