Financial Data and Key Metrics Changes - In Q4 2025, net sales were $631 million, a decrease of 5.7% compared to Q4 2024, excluding the divestiture of European operations [24] - For the full year 2025, net sales were $2.4 billion, a 4.8% decline compared to 2024, also excluding the European divestiture [24] - Adjusted EBITDA for Q4 2025 was $55 million, down from $63 million in Q4 2024, while full-year adjusted EBITDA was $196 million, compared to $224 million in 2024 [26] - Adjusted diluted earnings per share for Q4 2025 was $0.36, consistent with Q4 2024, while full-year adjusted diluted earnings per share increased by 19% to $1.01 [26] Business Line Data and Key Metrics Changes - Targeted print categories, including direct mail and packaging, experienced net sales growth, while traditional print product lines like magazines and catalogs saw declines [4][25] - The QuadMed employer-sponsored healthcare business also showed revenue increases, offsetting declines in logistics and agency sales [25] Market Data and Key Metrics Changes - The company reported a significant increase in co-mail volumes by over 50%, enhancing carrier route density levels and achieving postal savings [57] - The postal service is expected to implement a mid-year rate increase of 6%-8%, which could impact marketing spend [80] Company Strategy and Development Direction - The company is focused on revenue diversification and has made targeted investments in artificial intelligence to drive efficiency and effectiveness in marketing solutions [4][19] - Quad aims to return to net sales growth by 2028, with a strategic emphasis on integrated marketing solutions and targeted print offerings [4][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, noting increased confidence among clients and a potential for reinvestment [75] - The company is closely monitoring inflationary pressures and postal rate increases, which could affect marketing spend [40] Other Important Information - The company increased its quarterly dividend by 33% to $0.10 per share, reflecting a commitment to shareholder returns [5][31] - A significant transition in the manufacturing network was announced, with the closure of a plant in Thomaston, Georgia, expected to be completed by early March [22] Q&A Session Summary Question: Insights on direct mail performance and future trends - Management clarified the distinction between direct mail as a product and the direct marketing agency, emphasizing the importance of personalized, data-driven approaches to enhance response rates [47][48] Question: Impact of postal rate increases on catalogs - Management noted that while catalogs have been responsive, the significant increases in postal rates have led to further declines in catalog usage, particularly in prospecting mailings [56] Question: Updates on In-Store Connect and future deployments - Management indicated that there has been an acceleration in conversations and opportunities regarding In-Store Connect, with plans for further rollouts [60] Question: Factors influencing 2026 sales and Adjusted EBITDA guidance - Management highlighted that postal impacts and the momentum in targeted print categories will influence the sales trend, with expectations for improved margins as the revenue mix evolves [66][67] Question: Capital allocation strategy moving forward - Management confirmed a balanced approach to capital allocation, focusing on shareholder returns, potential tuck-in acquisitions, and growth investments [68][69]

Financial Data and Key Metrics Changes - In Q4 2025, net sales were $631 million, a decrease of 5.7% compared to Q4 2024, excluding the divestiture of European operations [24] - For the full year 2025, net sales were $2.4 billion, a 4.8% decline compared to 2024, excluding the European divestiture [24] - Adjusted EBITDA for Q4 2025 was $55 million, down from $63 million in Q4 2024, while full-year adjusted EBITDA was $196 million, compared to $224 million in 2024 [26] - Adjusted diluted earnings per share for Q4 2025 was $0.36, consistent with Q4 2024, while full-year adjusted diluted earnings per share was $1.01, an increase of 19% from 2024 [26][27] - Free cash flow was $51 million in 2025, down from $56 million in 2024 [28] Business Line Data and Key Metrics Changes - Targeted print categories, including direct mail, packaging, and in-store marketing, experienced net sales growth, while traditional print product lines like magazines and catalogs saw declines [4][25] - The QuadMed employer-sponsored healthcare business also showed revenue increases, offsetting declines in logistics and agency sales [25] Market Data and Key Metrics Changes - The company reported a significant increase in co-mail volumes by over 50%, enhancing carrier route density levels and achieving postal savings [57] - The postal service's rate increases have impacted catalog marketing, leading to further declines in that area, although the company has managed to offset some of the damage through its postal optimization efforts [56] Company Strategy and Development Direction - The company is focused on revenue diversification and has made targeted investments in artificial intelligence to drive cost efficiency and revenue generation [18][19] - Quad is expanding its integrated marketing platform and has opened new offices to support growth in creative and media capabilities [10][16] - The company aims to return to net sales growth by 2028, with a strategic focus on higher-margin targeted print offerings [4][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to navigate the current operating environment, citing increased confidence among clients and a focus on personalized marketing strategies [75][76] - The company anticipates a continued decline in net sales for 2026, but expects improvements in sales trends as it moves towards its 2028 growth targets [35][41] Other Important Information - The company increased its quarterly dividend by 33% to $0.10 per share, reflecting its commitment to long-term shareholder value [5][31] - The company has reduced net debt by $42 million in 2025 and by $726 million since 2020, achieving a net debt leverage ratio of 1.57x [32] Q&A Session Summary Question: Can you provide insights on direct mail growth trends and expectations for 2026? - Management clarified the difference between direct mail as a product and the direct marketing agency, emphasizing the importance of personalized marketing to drive higher response rates [47][48] Question: Have you seen any impact from the delayed postal rate increase on catalogs? - Management noted that while there has been no growth in catalogs, they have managed to offset some declines through increased co-mail volumes and postal optimization [56][57] Question: What is the status of In-Store Connect and its rollout? - Management indicated that there has been an acceleration in conversations and opportunities related to In-Store Connect, with capital reserved for growth in this area [60][62] Question: What factors are influencing the guidance ranges for 2026? - Management highlighted the impact of postal rates and the momentum in targeted print categories as key factors influencing the guidance [66][67] Question: How will capital allocation be balanced moving forward? - Management stated that capital allocation will continue to be balanced, with a focus on growth investments, share repurchases, and maintaining low debt leverage [69][70]

Financial Data and Key Metrics Changes - In Q4 2025, net sales were $631 million, a decrease of 5.7% compared to Q4 2024, excluding the divestiture of European operations [22] - For the full year 2025, net sales were $2.4 billion, a 4.8% decline compared to 2024, also excluding the European divestiture [22] - Adjusted EBITDA for Q4 2025 was $55 million, down from $63 million in Q4 2024, while full-year adjusted EBITDA was $196 million, compared to $224 million in 2024 [23][24] - Adjusted diluted earnings per share for Q4 2025 was $0.36, consistent with Q4 2024, while full-year adjusted diluted earnings per share increased by 19% to $1.01 [24] - Free cash flow was $51 million in 2025, down from $56 million in 2024, primarily due to a decrease in net cash from operating activities [26] Business Line Data and Key Metrics Changes - Targeted print categories, including direct mail, packaging, and in-store marketing, experienced net sales growth, while traditional print product lines like magazines and catalogs saw declines [4][22] - The direct mail segment outperformed expectations in 2025, driven by higher volumes and operational efficiencies [4][45] - The QuadMed employer-sponsored healthcare business also saw an increase in revenue mix as a percentage of total net sales [22] Market Data and Key Metrics Changes - The company noted a significant impact from postal rate increases, which have affected the catalog segment, leading to further declines in volume [52][54] - The new Postmaster General's approach aims for growth rather than just revenue through price increases, which could positively influence the catalog market in the future [53] Company Strategy and Development Direction - The company is focused on revenue diversification and has made targeted investments in artificial intelligence to enhance marketing efficiency and effectiveness [5][18] - Quad is expanding its integrated marketing platform, which combines creative, production, and media solutions across physical and digital channels, creating a competitive advantage [5][6] - The company anticipates a return to net sales growth by 2028, with a focus on improving adjusted EBITDA margins and free cash flow conversion [4][40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to navigate the current operating environment, emphasizing the importance of maintaining a disciplined approach to cost management [38] - The company expects to see improved sales trends in 2026, with a focus on targeted print categories and continued investment in growth initiatives [33][34] - Management acknowledged potential challenges from tariffs and inflation but remains committed to adapting to changing market conditions [38] Other Important Information - The company increased its quarterly dividend by 33% to $0.10 per share, reflecting a commitment to shareholder returns [5][29] - Quad's net debt leverage ratio was 1.57x as of December 31, 2025, with a goal to maintain a low leverage ratio while pursuing growth investments [28][30] Q&A Session Summary Question: Can you provide insights on the growth trends in direct mail and its momentum into 2026? - Management clarified the difference between direct mail as a product and the direct marketing agency's role, emphasizing the importance of data-driven personalization to enhance response rates [45][46] Question: Have you seen any impact from the delayed postal rate increase on catalogs or other channels? - Management noted that while there has been no growth in catalogs, they have managed to offset some declines through increased co-mail volumes and postal savings [54][55] Question: What is the current status of In-Store Connect and its rollout? - Management indicated that there has been an acceleration in conversations and opportunities related to In-Store Connect, with capital reserved for growth in this area [57][59] Question: What factors are influencing the guidance ranges for sales and Adjusted EBITDA in 2026? - Management highlighted the impact of postal rates and the momentum in targeted print categories as key factors influencing the guidance ranges [63][64] Question: How will capital allocation be balanced moving forward? - Management stated that capital allocation will continue to be balanced, with a focus on growth investments, share repurchases, and maintaining low debt leverage [66][68]