CompoSecure Reports First Quarter 2025 Financial Results

Rhea-AI Summary

CompoSecure (NASDAQ: CMPO) reported its Q1 2025 financial results, with consolidated net sales of $103.9 million compared to $104.0 million in Q1 2024. The company completed the spin-off of Resolute Holdings Management (NASDAQ: RHLD) on February 28, 2025, affecting accounting methods. Gross profit was $54.5 million (52.5% margin), slightly down from $55.2 million (53.1%) year-over-year. Adjusted net income increased 21% to $28.4 million, with diluted adjusted EPS of $0.25.

The company's financial position showed $71.7 million in cash and $195.0 million in total debt as of March 31, 2025. CompoSecure maintained its 2025 guidance, projecting mid-single digit growth in both consolidated net sales and Pro Forma Adjusted EBITDA. Notable achievements include successful partnerships with MetaMask, MoneyGram, and Circular for Arculus implementation.

Positive

• Adjusted net income increased 21% to $28.4 million vs $23.3 million YoY
• Record results for Arculus with net positive contribution in Q1
• Strong partnerships established with MetaMask, MoneyGram, and Circular
• Improved debt position with leverage ratio decreasing to 1.05x from 1.34x YoY
• Maintained positive outlook with mid-single digit growth guidance for 2025

Negative

• Slight decline in net sales to $103.9M from $104.0M YoY
• Gross margin decreased to 52.5% from 53.1% YoY due to product mix
• Higher general and administrative expenses impacting EBITDA
• Pro Forma Adjusted EBITDA decreased to $33.7M from $34.5M YoY

Insights

Financial Analyst

CompoSecure delivered stable Q1 results with flat revenue, improved debt position, and maintained 2025 guidance despite structural changes.

CompoSecure's Q1 results reflect operational stability amid significant corporate restructuring. The company reported consolidated non-GAAP revenue of $103.9 million, essentially flat year-over-year, with a slight margin compression to 52.5% from 53.1% due to product mix changes. While Pro Forma Adjusted EBITDA declined marginally to $33.7 million from $34.5 million, the company achieved a 21% increase in Adjusted Net Income to $28.4 million.

The balance sheet shows marked improvement, with cash increasing to $71.7 million from $55.1 million year-over-year, while total debt decreased significantly to $195.0 million from $335.6 million. This has strengthened their financial position, reducing their bank agreement senior secured debt leverage ratio to 1.05x from 1.34x.

The February 2025 spin-off of Resolute Holdings complicates financial reporting, requiring equity method accounting under GAAP, but the non-GAAP results provide clearer continuity with historical performance. Management's comments indicate strengthening demand in Q2, suggesting potential acceleration in the coming quarters despite the flat Q1 performance.

Their Arculus digital asset authentication business achieved a net positive contribution, continuing momentum from previous quarters. Integration of this technology with payment capabilities suggests CompoSecure is successfully leveraging cross-selling opportunities between traditional metal cards and digital authentication solutions.

The reiteration of full-year guidance calling for mid-single digit growth in both revenue and EBITDA, despite a flat Q1, implies management expects stronger performance in subsequent quarters. They specifically noted that sales momentum is building through the year, which aligns with their maintained guidance.

• Operating results in line with expectations
• Reiterating previously issued full-year 2025 guidance
• Completed spin-off of Resolute Holdings Management, Inc. (Nasdaq: RHLD)
• Accounting standards related to the spin-off require the Company to report results using equity method of accounting in accordance with U.S. GAAP
• Non-GAAP results are also included below and provide a clearer picture of the underlying financial performance of the operating business consistent with historical reporting  
  

SOMERSET, N.J., May 12, 2025 (GLOBE NEWSWIRE) -- CompoSecure, Inc. (Nasdaq: CMPO), a leader in metal payment cards, security, and authentication solutions, today announced its financial and operating results for the first quarter ended March 31, 2025.

“We started the year with solid execution across our payment card and Arculus business,” said Jon Wilk, President and CEO of CompoSecure. “Demand has continued to strengthen throughout the second quarter, reflecting strong sales momentum, and we anticipate this sustained growth trajectory will carry through the remainder of the year. Our team remains focused on continuing to implement the CompoSecure Operating System (“COS”) throughout the business and we are beginning to see these ongoing efforts yield results.”

Mr. Wilk added, “We delivered record results for Arculus, generating another net positive contribution in Q1 as we are seeing metal card customers beginning to future-proof their offerings by bundling Arculus Authenticate with payment capabilities. As previously stated, we expect a net positive contribution for the full year as Arculus remains a powerful differentiator that sets CompoSecure apart in the digital asset and evolving Web3 payments landscape.”

Dave Cote, CompoSecure’s Executive Chairman, stated: “I am pleased with our first quarter results and with the team’s continued engagement implementing COS. Our metal cards enhance brand loyalty and deliver accelerated returns for our customers through superior acquisition, spending, and retention. As more issuers recognize the value our products deliver, we see significant opportunities for continued growth and are planting seeds through strategic investments to execute on the market opportunity we see while leveraging the COS to enhance efficiency and execution. Taken together, we are excited about the work at CompoSecure and believe the Company is well positioned for the remainder of 2025.”

Financial Results
As a result of the spin-off of Resolute Holdings Management, Inc. (“Resolute Holdings”) on February 28, 2025 and the execution of the management agreement with Resolute Holdings, CompoSecure is required to account for the operating results of its wholly owned operating subsidiary, CompoSecure Holdings L.L.C. (“CompoSecure Holdings”), under the equity method in accordance with U.S. GAAP, effective February 28, 2025.

The GAAP results presented below reflect the consolidated operating results of CompoSecure from January 1, 2025 to February 27, 2025 and the subsequent conversion to the equity method presentation from February 28, 2025 to March 31, 2025. For clarity of comparisons and to best reflect the financial results associated with the standalone payment card and Arculus business, the Company is also presenting the full first quarter on a historical consolidated basis under the “Non-GAAP Results” heading below.

	1Q 2025			1Q 2024
Accounting Treatment	GAAP	Non-GAAP		GAAP		Non-GAAP
Net Sales ($ in millions)	$59.8	$103.9(1)		$104.0(1)		$104.0(1)
Gross Profit ($ in millions)	$28.70	$54.50(1)		$55.20(1)		$55.20(1)
Gross Margin (%)	48.1	52.5(1)		53.1(1)		53.1(1)
Pro-Forma Adjusted EBITDA ($ in millions)		$33.7(2)				$34.5(2)
EPS/Adjusted EPS – Diluted	$0.07	$0.25		$0.17		$0.24
Cash ($ in millions)	$9.5	$71.7(1,3)		$55.1(1,4)		$55.1(1,4)
Total Debt ($ in millions)		$195.0(3)				$335.6(4)
(1) Refers to a Consolidated Non-GAAP Measure. For 1Q24, Net Sales, Gross Profit, Gross Margin, and Cash are identical on a GAAP and Non-GAAP basis, because such measures have historically been shown on a consolidated basis; (2) Pro-Forma Adjusted EBITDA in the table includes (~$3.2mm) expense in both 1Q25 and 1Q24. This expense represents a full quarter of management fees due to Resolute Holdings. The adjustment was made to allow for comparability across periods. The actual payment to Resolute Holdings in 1Q25 was $1.1mm because the contract has been effective since February 28th spin-off. $0 were paid in 1Q24 because Resolute Holdings did not exist. Please see Statement of Operations on page 9 for full reconciliation. (3) As of March 31, 2025. (4) As of March 31, 2024.

GAAP Results: Q1 2025 Financial Highlights (vs. Q1 2024)

Important Note: These GAAP results reflect the consolidation of CompoSecure Holdings, L.L.C. through February 27, 2025, and the application of equity method accounting beginning February 28, 2025, following the completion of the Resolute Holdings Management, Inc. spin-off.

• Net Sales: Net Sales in CompoSecure Inc., were $59.8 million from January 1, 2025 through February 27, 2025; and Net Sales of CompoSecure Holdings were $44.1 million from February 28, 2025 through March 31, 2025 (which is reflected in the Company’s financial statements as an equity method investment from February 28, 2025).
• Net Income: Net Income was $21.5 million compared to $17.1 million in the year-ago period.
• Earnings Per Share: EPS attributable to Class A common shareholders was $0.21(Basic) and $0.07(Diluted) compared to $0.20 (Basic) and $0.17 (Diluted) in the year-ago period. The increase was primarily driven by non-cash gains related to the revaluation of warrant and earnout liabilities.
  

Non-GAAP Results: Q1 2025 Financial Highlights (vs. Q1 2024)

• Consolidated Net Sales: Consolidated Net Sales were $103.9 million compared to $104.0 million in the year-ago period.
• Consolidated Gross Profit: Consolidated Gross Profit was $54.5 million or 52.5% of Net Sales, compared to $55.2 million or 53.1% in the year-ago period. The decrease in gross margin was primarily driven by product mix.
• Adjusted Net Income Adjusted Net Income increased 21% to $28.4 million compared to $23.3 million in the year-ago period.
• Adjusted Earnings Per Share: Adjusted Earnings Per Share was $0.28 (Basic) and $0.25 (Diluted) compared to $0.29 (Basic) and $0.24 (Diluted) in the year-ago period.
• Pro Forma Adjusted EBITDA: Pro Forma Adjusted EBITDA was $33.7 million compared to $34.5 million in the year-ago period, with the decrease primarily due to higher general and administrative expenses due to growth investments.
  

Financial Condition

• GAAP Financial Condition: At March 31, 2025, CompoSecure had $9.5 million of cash and cash equivalents. The Company's liquidity needs are expected to be met with funding from the operations of CompoSecure Holdings.
• Non-GAAP Financial Condition: At March 31, 2025, CompoSecure had $71.7 million of cash and cash equivalents and $195.0 million of total debt, resulting in net debt of $180.7 million. This compares to cash and cash equivalents of $55.1 million and total debt of $335.6 million at March 31, 2024. CompoSecure’s bank agreement senior secured debt leverage ratio was 1.05x at March 31, 2025 compared to 1.34x at March 31, 2024.

Additional Highlights

• Vertical industry successes for Arculus include MetaMask (crypto payments), MoneyGram (cross-border payment services), and Circular (healthcare).
  

2025 Financial Outlook

CompoSecure is reiterating its previously issued full year 2025 guidance, which calls for mid-single digit growth in both Consolidated Net Sales and Pro Forma Adjusted EBITDA with sales momentum building through the year. This guidance includes payment of the Resolute Holdings management fee in 2025 and 2024, on a pro forma basis.

Conference Call

CompoSecure will host a conference call and live audio webcast today at 5:00 p.m. Eastern time to discuss its financial and operational results, followed by a question-and-answer session.

Date: Monday, May 12, 2025
Time: 5:00 p.m. Eastern time
Dial-in registration link: here
Live webcast registration link: here

If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.

A live webcast and replay of the conference call will be available on the investor relations section of CompoSecure’s website at https://ir.composecure.com/news-events/events.

About CompoSecure

Founded in 2000, CompoSecure (Nasdaq: CMPO) is a technology partner to market leaders, fintechs and consumers enabling trust for millions of people around the globe. The company combines elegance, simplicity and security to deliver exceptional experiences and peace of mind in the physical and digital world. CompoSecure’s innovative payment card technology and metal cards with Arculus security and authentication capabilities deliver unique, premium branded experiences, enable people to access and use their financial and digital assets, and ensure trust at the point of a transaction. For more information, please visit www.CompoSecure.com and www.GetArculus.com.

Forward-Looking Statements

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management. Although CompoSecure believes that its plans, intentions, and expectations reflected in or suggested by these forward-looking statements are reasonable, CompoSecure cannot assure you that it will achieve or realize these plans, intentions, or expectations. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Generally, statements that are not historical facts, including statements concerning CompoSecure’s possible or assumed future actions, business strategies, events, or results of operations, are forward-looking statements. In some instances, these statements may be preceded by, followed by, or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or the negatives of these terms or variations of them or similar terminology. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. You should understand that the following important factors, among others, could affect CompoSecure’s future results and could cause those results or other outcomes to differ materially from those expressed or implied in CompoSecure’s forward-looking statements:  the ability of CompoSecure to grow and manage growth profitably, maintain relationships with customers, compete within its industry and retain its key employees; the possibility that CompoSecure may be adversely impacted by other global economic, business, competitive and/or other factors, including tariffs; the outcome of any legal proceedings that may be instituted against CompoSecure or others; future exchange and interest rates; changes in our accounting and/or financial presentation; and other risks and uncertainties, including those under “Risk Factors” in filings that have been made or will be made with the Securities and Exchange Commission. CompoSecure undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Use of Non-GAAP Financial Measures

Due to the spin-off of Resolute Holdings Management, Inc. and the resulting shift to equity method accounting under GAAP beginning February 28, 2025, CompoSecure is presenting a broader set of non-GAAP measures, including an Adjusted Statement of Operations (Unaudited), an Adjusted Balance Sheet (Unaudited), Consolidated Net Sales, Consolidated Gross Profit, Consolidated Gross Margin, Consolidated Total Cash, Consolidated Net Debt and related measures, to provide investors with financial information that we believe allows for greater comparability with our historical financial presentation and better represents the underlying performance of the standalone business across reporting periods.

This press release also includes certain non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and that may be different from non-GAAP financial measures used by other companies. CompoSecure believes EBITDA, Adjusted EBITDA, Pro Forma Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Consolidated Net Sales, Consolidated Gross Profit, Consolidated Gross Margin, Consolidated Total Cash, Consolidated Net Debt and related measures are useful to investors in evaluating CompoSecure’s financial performance. Specifically, we believe EBITDA, Adjusted EBITDA, and Pro Forma Adjusted EBITDA provide valuable insight into operational efficiency independent of capital structure and tax environment; Adjusted Net Income and Adjusted EPS offer investors a clearer view of ongoing profitability by excluding non-recurring and non-operational items; and Consolidated Net Sales, Consolidated Gross Profit, Consolidated Gross Margin, Consolidated Total Cash, Consolidated Net Debt and related measures provide greater comparability with CompoSecure’s historical results, following the change in accounting presentation required as a result of the spin-off of Resolute Holdings. CompoSecure uses these non-GAAP measures internally to establish forecasts, budgets and operational goals to manage and monitor its business, as well as evaluate its underlying historical performance and/or measure incentive compensation. We believe that these non-GAAP financial measures depict the true performance of the business by encompassing only relevant and controllable events, enabling CompoSecure to evaluate and plan more effectively for the future.

EBITDA, Adjusted EBITDA, Pro Forma Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Consolidated Net Sales, Consolidated Gross Profit, Consolidated Gross Margin, Consolidated Total Cash, Consolidated Net Debt and related measures should not be considered as measures of financial performance under U.S. GAAP, and the items excluded from these measures are significant components in understanding and assessing CompoSecure’s financial performance. Accordingly, these key business metrics have limitations as an analytical tool. They should not be considered as an alternative to net income or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flows from operating activities as a measure of CompoSecure’s liquidity. These non-GAAP measures may be different from similarly titled non-GAAP measures used by other companies. Additionally, CompoSecure’s debt agreements contain covenants based on variations of these measures for purposes of determining debt covenant compliance. CompoSecure believes that investors should have access to the same set of tools that its management uses in analyzing operating results. Please refer to the tables below for the reconciliation of GAAP measures to these non-GAAP measures.

Due to the forward-looking nature of the financial guidance included above, the charges excluded from the non-GAAP financial measures, including with respect to depreciation, amortization, interest, and taxes that would be required to reconcile the non-GAAP financial measures to GAAP measures are inherently uncertain or difficult to predict, so it is not feasible to provide accurate forecasted non-GAAP reconciliations without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included, and no reconciliation of the forward-looking non-GAAP financial measures is included.

Corporate Contact

Anthony Piniella
Head of Communications, CompoSecure
(917) 208-7724
apiniella@composecure.com

Investor Relations Contact

Sean Mansouri, CFA
Elevate IR
(720) 330-2829
CMPO@elevate-ir.com

Non-GAAP Adjusted Balance Sheet
(unaudited)
$ Thousands
	GAAP			Non GAAP
	March 31, 2025			March 31, 2025			December 31, 2024
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	9,506		$	71,676		$	77,461
Accounts Receivable		-			54,188			47,449
Inventories, net		-			47,501			44,833
Prepaid expenses and other current assets		1,321			4,138			4,159
Total current assets		10,827			177,503			173,902
Property and equipment, net and right of use asset		-			31,045			28,852
Deferred tax asset		266,652			266,652			264,815
Other assets		-			5,953			6,349
Equity method Investment		14,844			-			-
Total Assets	$	292,323		$	481,153		$	473,918
	GAAP			Non GAAP
	March 31, 2025			March 31, 2025			December 31, 2024
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	4,025		$	15,263		$	11,544
Accrued expenses		28,594			50,865			25,711
Current portion of long-term debt		-			12,500			11,250
Other current liabilities		14,474			16,513			27,817
Total current liabilities		47,093			95,141			76,322
Long-term debt, net of deferred finance costs		-			180,713			184,389
Warrant liability		84,003			84,003			104,231
Lease liabilities, operating leases		-			7,723			3,888
Tax receivable agreement liability		248,534			248,534			248,534
Total liabilities		379,630			616,114			617,364
Shareholder's deficit		(87,307	)		(134,961	)		(143,446	)
Total liabilities and shareholder's deficit	$	292,323		$	481,153		$	473,918
Source: Company financials
Note: Financial position has been derived from CompoSecure’s consolidated financial statements for the quarter ended March 31, 2025 and December 31, 2024, respectively.

Consolidated Statement of Operations
(in thousands, expect per share amounts)
(unaudited)

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/0c465be5-5786-474a-8786-405d31f54c99

Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
	Three Months Ended March 31,
		2025			2024
CASH FLOWS FROM OPERATING ACTIVITES:
Net (loss) income	$	21,492		$	17,073
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		2,273			2,221
Stock-based compensation expense		5,721			4,397
Amortization of deferred finance costs		131			345
Non-cash operating lease expense		615			584
Revaluation of earnout consideration liability		(11,230	)		1,459
Revaluation of warrant liability		(17,921	)		7,397
Change in fair value of derivative liability		-			297
Deferred tax expense		(1,837	)		(1,867	)
Changes in assets and liabilities
Accounts receivable		(6,739	)		5,378
Inventories		(2,668	)		(2,657	)
Prepaid expenses and other assets		21			(119	)
Accounts payable		3,719			(446	)
Accrued expenses		29,585			1,486
Lease liabilities		(578	)		(603	)
Other liabilities		(4,430	)		(1,194	)
Net cash provided by operating activities		18,154			33,751
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(576	)		(1,613	)
Capitalized software expenditures		(580	)		-
Net cash used in investing activities		(1,156	)		(1,613	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from warrants and exercise of options		5,009			107
Payments for taxes related to net share settlement of equity awards		(15,284	)		(3,476	)
Payment due to Spin-Off		(10,008	)		-
Payment of term loan		(2,500	)		(4,688	)
Tax distributions to non-controlling members		-			(10,151	)
Net cash used in financing activities		(22,783	)		(18,208	)
Net increase (decrease) in cash and cash equivalents		(5,785	)		13,930
Cash and cash equivalents, beginning of period		77,461			41,216
Cash and cash equivalents, end of period	$	71,676		$	55,146
Supplementary disclosure of cash flow information
Cash paid for interest expense	$	3,299		$	4,175
Supplemental disclosure of non-cash financing activity:
Derivative asset - interest rate swap	$	(753	)	$	452
Source: Company financials
Note: Operating results have been derived from CompoSecure's consolidated financial statements for the three months ended March 31, 2025 and 2024, respectively.

Q1 Earnings Per Share: Non-GAAP Reconciliation
	Basic								Diluted
	Three Months Ended March 31,								Three Months Ended March 31,
		2025			2024					2025		2024
(in thousands)								(in thousands)
Net income	$	21,492		$	17,073			Adjusted net income	$	28,412	$	23,317
Add(less): provision (benefit) for income taxes		27,004			(836	)		Add: Interest on Exchangeable Notes net of tax		-		1,781
Income before Income taxes		48,496			16,237			Adjusted net income used in computing net income per share, diluted (5)		28,412		25,098
Add (Less): mark-to-market adjustments (1)		(29,151	)		9,153			Common shares outstanding used in computing earnings per share, diluted:		102,040		80,525
Add: stock-based compensation		5,720			4,397			Warrants (4)		9,878		8,094
Add: spin-off cost		5,019			-			Exchangeable Notes (5)		-		13,000
Adjusted net income before tax		30,084			29,787			Equity awards		3,533		2,710
Income tax expense (2)		1,672			6,470			Total Shares outstanding used in computing adjusted earnings per share-Diluted		115,451		104,329
Adjusted net income		28,412			23,317			Adjusted net income per share - Diluted	$	0.25	$	0.24
Common shares outstanding used in computing net income per share, basic:
Class A and Class B common shares (3)		102,040			80,525
Adjusted net income per share - basic	$	0.28		$	0.29
Source: Company Financials
1) Includes the changes in fair value of warrant liability, make-whole provision of Exchangeable Notes and earnout consideration liability.
2) Reflects current and deferred income tax expenses. For the three months ended March 31, 2024 it was calculated using the Company's blended tax rate as if the Company did not have any non-controlling interest associated with its historical Up-C structure. For the three months ended March 31, 2025, it was calculated by applying the Company's blended tax rate to the presented adjustments and including the Company's provision less tax associated with a taxable gain from the distribution of appreciated property related to the Spin-Off.
3) Assumes both Class A and Class B shares participate in earnings and are outstanding at the end of the period. There were no Class B shares outstanding as of March 31, 2025.
4) Assumes treasury stock method, valuation at assumed fair market value of $14.47.
5) The Exchangeable Notes were included through the application of the "if-converted" method. Interest related to the Exchangeable Notes, net of tax was excluded from net income. No Exchangeable notes were outstanding during the three months ended March 31, 2025.

FAQ

What were CompoSecure's (CMPO) Q1 2025 earnings results?

CompoSecure reported Q1 2025 consolidated net sales of $103.9M, adjusted net income of $28.4M (up 21% YoY), and diluted adjusted EPS of $0.25. Gross profit was $54.5M with a 52.5% margin.

How did the Resolute Holdings spin-off affect CMPO's financial reporting?

The spin-off on February 28, 2025 required CompoSecure to use equity method accounting for its subsidiary CompoSecure Holdings, affecting how results are reported under GAAP vs Non-GAAP measures.

What is CompoSecure's (CMPO) debt position as of Q1 2025?

As of March 31, 2025, CompoSecure had $71.7M in cash, $195.0M in total debt, resulting in net debt of $180.7M. The company's leverage ratio improved to 1.05x from 1.34x YoY.

What is CompoSecure's (CMPO) guidance for 2025?

CompoSecure reiterated its 2025 guidance, projecting mid-single digit growth in both Consolidated Net Sales and Pro Forma Adjusted EBITDA, with sales momentum expected to build throughout the year.

How did CompoSecure's Arculus business perform in Q1 2025?

Arculus achieved record results with a net positive contribution in Q1, with metal card customers beginning to bundle Arculus Authenticate with payment capabilities.