Pitney Bowes plans to offer $200 million in convertible notes

STAMFORD, Conn. - Pitney Bowes Inc. (NYSE:PBI), a $1.93 billion market cap company that has seen its stock surge over 61% year-to-date according to InvestingPro data, announced plans to offer $200 million in convertible senior notes due 2030 in a private placement, with an option for initial purchasers to buy an additional $30 million in notes.

The company intends to use part of the proceeds to fund capped call transactions designed to reduce potential dilution to common stock upon conversion of the notes. Up to $75 million will be allocated to repurchase shares of the company’s common stock concurrently with the pricing of the offering. This aligns with InvestingPro analysis showing management’s aggressive share buyback strategy, with 10+ additional insights available to subscribers.

Any remaining proceeds will support general corporate purposes and strategic investments aligned with Pitney Bowes’ capital strategy, potentially including business reinvestments, debt repayment, or initiatives to reduce leverage and borrowing costs.

The convertible notes will be senior unsecured obligations, fully guaranteed by the company’s existing and future wholly owned U.S. subsidiaries that guarantee other debt obligations. The notes will mature on August 15, 2030, unless redeemed, repurchased, or converted earlier.

Pitney Bowes will settle conversions by paying cash up to the aggregate principal amount and delivering shares for any remainder of the conversion obligation. The company cannot redeem the notes before August 21, 2028, after which it may redeem them under certain conditions.

The offering targets qualified institutional buyers under Rule 144A of the Securities Act. The notes, related guarantees, and any shares issuable upon conversion have not been registered under the Securities Act and cannot be sold in the United States without exemption from registration requirements.

According to the press release statement, Pitney Bowes provides SaaS shipping solutions, mailing innovation, and financial services to clients worldwide, including more than 90 percent of Fortune 500 companies. The company maintains impressive gross profit margins of 53.6% and has consistently paid dividends for 55 consecutive years, though InvestingPro data indicates current short-term obligations exceed liquid assets with a current ratio of 0.76.

In other recent news, Pitney Bowes announced its Q2 2025 earnings, which fell short of analyst expectations. The company reported earnings per share (EPS) of $0.27, slightly below the predicted $0.28, representing a 3.57% negative surprise. Revenue was also lower than anticipated, reaching $462 million compared to the expected $476.21 million, marking a 2.98% miss. These figures highlight a challenging quarter for Pitney Bowes as it grapples with meeting financial forecasts. The earnings miss reflects broader issues impacting the company’s performance in the current market environment. While the immediate stock reaction saw a minor decline, the aftermarket trading showed a modest recovery. Investors will be closely monitoring how Pitney Bowes addresses these challenges in the coming quarters. The recent earnings report underscores the importance of future strategic adjustments to meet financial goals.

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