Pitney Bowes Raises Minimum Free Cash Flow Forecast to $380 Million
Key Facts
Pitney Bowes raised its 2026 financial forecast after reporting third-quarter results, setting adjusted free cash flow at $380 million to $420 million, compared with a previous range of $360 million to $410 million. The company also raised the bottom end of its revenue forecast to $1.83 billion from $1.80 billion, while keeping the top end at $1.86 billion. The update also lifted the minimum forecast for adjusted operating profit to $450 million and adjusted earnings per share to $1.58. The company said third-quarter performance and the start of the fourth quarter contributed to the improved outlook. The revision came as its Presort Services business added customers and volume following PCI’s exit from the market.
Pitney Bowes said it added more than 30 new customers representing about 2 billion mailpieces annually as a result of PCI’s exit. It said the volume will bolster year-over-year comparisons over the next four quarters, and the chief executive said on the earnings call that "these volumes will be a tailwind year over year over the next four quarters." Presort Services revenue was $151 million in the third quarter, up 1% from the same period last year. The volume of mail processed by the business also rose 4% to 3.4 billion pieces. The company said higher volume from new customers returned the business to year-over-year revenue growth.
But the higher volume did not lift the business’s profitability in the quarter, as adjusted operating profit at Presort Services fell 2% to $32 million. The company attributed the decline to lower revenue per mailpiece and higher transportation costs, which increased $6 million year over year. At the group level, quarterly revenue fell 1% to $456 million. By contrast, adjusted free cash flow surged 144% to $147 million, compared with $60 million a year earlier. The company said higher advance payments from new customers had supported adjusted free cash flow year to date, while management raised its annual range to $380–420 million.
The quarterly results showed improvement in some earnings and cash metrics: net income was $53 million, compared with $52 million in the same period a year earlier. Adjusted earnings per share rose 35% to $0.42 from $0.31. Cash flow from operations was $151 million, compared with $67 million a year earlier, while adjusted free cash flow reached $147 million versus $60 million. These figures are consistent with the increase in the minimum forecast for adjusted earnings per share to $1.58, alongside a narrower forecast range and an unchanged midpoint. The year-over-year comparison highlights a previous challenge for the business: in 2025, company revenue fell 7% to $1.893 billion, and Presort Services revenue dropped 4% to $637 million.
On financing, the company said it reduced debt by $148 million in the third quarter and repriced a $585 million term loan, cutting the interest margin by 75 basis points. It also repurchased about 1 million shares for $17 million, at an average price of $16.84 per share. The board approved a quarterly dividend of $0.10 per share, payable on December 8, 2026, to shareholders of record on November 16. The company’s shares, listed under the ticker PBI, closed at $15.55 on November 6, 2026. Meanwhile, management expects the termination of a noncore contract in the fourth quarter to reduce revenue in the company’s SendTech segment by $60 million to $80 million in 2027.