CompoSecure Delivers Strong Double-Digit Growth and Sets Stage for $7.4 Billion Business Combination with Husky Technologies
Third Quarter Highlights: Double-Digit Growth, Expanding Margins, and Operating Momentum
CompoSecure’s third quarter of 2025 underscored the company's operational strength, with sales and profitability metrics that not only outperformed the prior year but also surpassed internal expectations. Non-GAAP net sales climbed 13% year-over-year to $120.87 million, while gross profit surged to $71.33 million, translating into a robust gross margin of 59%, a substantial expansion from last year’s 51.7%. Non-GAAP Pro Forma Adjusted EBITDA jumped 30% to $47.72 million, demonstrating strong operating leverage.
The company attributes these gains to rising customer demand, expansion within established client programs, and a wave of new business wins across both banks and fintech partners. Efficiency initiatives through the proprietary CompoSecure Operating System also played a pivotal role, fueling both growth and margin improvement. The Arculus security product suite contributed another net positive quarter and continues to see rising adoption by banking and fintech clients pursuing secure, innovative card offerings.
| Key Financial Metrics | Q3 2025 (Non-GAAP) | Q3 2024 (Non-GAAP) | % Change |
|---|---|---|---|
| Net Sales ($M) | 120.87 | 107.14 | +13% |
| Gross Profit ($M) | 71.33 | 55.41 | +29% |
| Gross Margin (%) | 59.0% | 51.7% | +7.3 pts |
| Pro Forma Adjusted EBITDA ($M) | 47.72 | 36.63 | +30% |
| Adjusted EPS - Diluted | 0.29 | 0.23 | +26% |
Balance Sheet: Strengthened Cash Position and Improved Leverage
CompoSecure exited the quarter with $224.59 million in cash and short-term investments on a non-GAAP basis, and total debt reduced to $190 million from $330 million the prior year. This yielded a swing to $75.3 million in net cash compared to $277.3 million net debt a year ago, supported by $149.5 million of new cash from warrant exercises and strong operating free cash flow. This improved liquidity provides flexibility as the company embarks on a transformational merger and executes growth plans.
Transformative Business Combination with Husky Technologies: A $7.4 Billion Diversified Compounder
Alongside robust financial results, CompoSecure announced an agreement to combine with Husky Technologies, a global leader in engineered manufacturing equipment and aftermarket services. The deal, valued at a pro-forma enterprise value of $7.4 billion (or approximately 11.6x 2026E Pro Forma Net Adjusted EBITDA), is being funded through $2 billion in private placement and $1 billion in equity rollover by Platinum Equity, which signals strong external confidence.
Post-transaction, Husky will continue as a standalone unit under its current management. The business combination is expected to be more than 20% accretive to adjusted diluted EPS in the first full year following the deal’s completion, anticipated in the first quarter of 2026. Both CompoSecure and Husky are expected to remain as distinct reporting subsidiaries under a new parent company name.
Forward-Looking Guidance Raised: Double-Digit Growth Forecast for 2026
Reflecting recent momentum, CompoSecure increased its 2025 outlook, targeting non-GAAP net sales of $463 million and pro forma adjusted EBITDA of $165-170 million. Initial 2026 guidance is also strong: non-GAAP net sales are expected to rise to $510 million (up 10% year-over-year) with EBITDA advancing to approximately $190 million (up 12-15%). This guidance does not yet factor in potential upside from the Husky merger, leaving additional room for future upgrades if integration proceeds smoothly.
| Fiscal Year | Net Sales ($M) | Pro Forma Adjusted EBITDA ($M) | Growth (Y/Y) |
|---|---|---|---|
| 2024 (Actual) | Approx. 420 | Approx. 150 | Base |
| 2025 (Guidance) | 463 | 165-170 | Net Sales +10%, EBITDA +10-13% |
| 2026 (Guidance) | 510 | 190 | Net Sales +10%, EBITDA +12-15% |
Strategic and Operational Takeaways for Investors
The third quarter results position CompoSecure as an expanding player with multiple tailwinds: strong sales execution, improved operating margins, an innovation pipeline, and a healthy balance sheet. The Husky combination broadens the company’s reach and builds a best-in-class diversified platform—one that stands to benefit from industry secular trends across payments, security, and engineered manufacturing.
Investors may want to watch closely as the merger progresses into 2026. With CompoSecure showing reliable organic growth and disciplined capital allocation—such as share repurchases and rapid debt paydown—the company’s next act, combining high-growth payments tech with established industrials, could reshape its earnings profile and risk-return potential over the next several years.
Key Recent Developments and Additional Highlights
- Launched or expanded major card programs with Citi, Chime, Bank of America, and others
- Transferred common stock listing to the NYSE
- Partnered with N.exchange to bolster the Arculus Wallet for digital assets
- Appointed Mary Holt as CFO, strengthening financial leadership
- Repurchased 648,000 shares for $12.2 million (avg. $18.89 per share)
The financial outlook remains bright, with significant earnings accretion forecast from the Husky deal and ongoing growth in core markets. Investors interested in industrial-fintech hybrids may want to keep this evolving story firmly on their radar as the combination takes shape in 2026.
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