Summary of Quad's Q4 2025 Earnings Call

1Key Financial Results and Metrics

Q4 2025 Net Sales: $631 million, down 5.7% year-over-year (YoY), excluding the divestiture of European operations.

Full Year 2025 Net Sales: $2.4 billion, a 4.8% decline YoY, primarily due to lower paper and print volumes, and the loss of a major grocery client.

Adjusted EBITDA: $55 million in Q4 2025, down from $63 million in Q4 2024; full year adjusted EBITDA was $196 million, down from $224 million in 2024.

Adjusted Diluted EPS: $0.36 in Q4 2025 (flat YoY) and $1.01 for the full year, a 19% increase from 2024.

Free Cash Flow: $51 million in 2025, slightly down from $56 million in 2024.

Net Debt: Reduced by $42 million in 2025, with a leverage ratio of 1.57x at year-end.

2Strategic Updates and Business Highlights

Quad achieved its full-year financial guidance despite a planned reduction in sales.

The company made significant progress in diversifying revenue streams, particularly in direct mail, packaging, and in-store marketing.

Quad's integrated marketing platform, MX solution suite, continues to enhance client marketing efficiency through data-driven strategies.

The company formalized its direct marketing agency, which combines various services to improve direct mail effectiveness.

New office openings in Austin and Mexico City aim to strengthen creative and media capabilities.

Quad's agencies, Betty and Rise, are gaining traction with notable clients, including Gorilla Glue and Heartland Dental.

3Forward Guidance and Outlook

2026 Guidance: Expected net sales decline of 1% to 5%, with a midpoint decline of 3%, indicating sequential improvement from previous years.

Adjusted EBITDA for 2026: Projected between $175 million and $215 million, with a margin increase to 8.4%.

Free Cash Flow for 2026: Expected in the range of $40 million to $60 million, with capital expenditures projected to increase to $55 million to $65 million.

The company aims for net sales growth by 2028, with a long-term target of a 3% CAGR in non-large-scale print offerings.

4Bad News, Challenges, or Points of Concern

The decline in net sales reflects ongoing challenges in the print industry, particularly in traditional segments like magazines and catalogs.

The company faces headwinds from postal rate increases, which could impact direct mail volumes and client marketing spend.

Competitive pressures from digital marketing solutions and performance marketing platforms may challenge Quad's market position.

The closure of the Thomaston, Georgia plant by early March 2026 signifies restructuring efforts but also potential job losses and community impact.

5Notable Q&A Insights

Direct mail showed strong performance in 2025, with expectations for continued momentum in 2026, driven by personalized marketing strategies.

The delayed postal rate increase has not yet resulted in an uptick in catalog usage, with ongoing declines noted.

Quad's in-store media initiatives are gaining traction, though execution may take longer due to organizational complexities within retail clients.

Management remains optimistic about maintaining client marketing budgets, despite broader industry pullbacks, particularly in retail inserts.

The company is closely monitoring inflationary pressures and potential tariff impacts on its operations and client spending. Overall, Quad's Q4 2025 earnings call highlighted a mix of strategic advancements and ongoing challenges, with a cautious but optimistic outlook for the coming year.