Quad (QUAD) Q2 Revenue Falls 10%

Core Insights - Quad/Graphics reported Q2 2025 results with adjusted diluted EPS of $0.14, meeting expectations, while GAAP revenue reached $571.9 million, exceeding estimates by $16.95 million [1][5][14] - Revenue declined by 9.8% year-over-year, attributed to the sale of European operations and lower paper and logistics sales [1][5][14] - The company reaffirmed its FY2025 outlook despite ongoing market uncertainties [1][15] Financial Performance - Adjusted diluted EPS (Non-GAAP) for Q2 2025 was $0.14, a 16.7% increase from $0.12 in Q2 2024 [2] - Revenue for Q2 2025 was $571.9 million, down from $634.2 million in Q2 2024, reflecting a 9.8% decline [2] - Adjusted EBITDA fell to $43.3 million, with a margin of 7.6%, down from 8.2% in the previous year [2][6] Business Overview - Quad/Graphics focuses on transforming traditional print services into comprehensive marketing solutions, emphasizing integrated, data-driven offerings [3][4] - The company aims to maintain long-standing client relationships, with its top 10 customers accounting for about 20% of sales [4] Operational Highlights - The company experienced a net loss of $(0.1) million in Q2 2025, an improvement from a $(2.8) million loss in the same period last year [6] - Cash flow remained negative, with free cash flow year-to-date at $(65.9) million, although better than the prior year [7] Strategic Initiatives - Quad/Graphics launched Audience Builder 2.0, an AI-powered tool for audience targeting, covering 92% of U.S. households [10] - The In-Store Connect platform expanded to over 45 locations, enhancing market penetration through partnerships with regional grocers [11] - The acquisition of Enru's co-mailing assets aims to improve postal optimization services [12] Segment Performance - The U.S. print and related services segment reported net sales of $524.5 million, while the International segment generated $47.4 million in sales [13] Future Guidance - Management expects adjusted annual net sales to decline between 2% and 6% for 2025, with adjusted EBITDA projected between $180 million and $220 million [14] - Free cash flow is anticipated to turn positive by year-end, estimated at $40 million to $60 million for 2025 [14]