Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $588 million, a decrease of 7% compared to Q3 2024, excluding a 6% impact from the divestiture of European operations [21] - Adjusted EBITDA was $53 million in Q3 2025, down from $59 million in Q3 2024, with an adjusted EBITDA margin improving from 8.7% to 8.9% year-to-date [22] - Adjusted diluted earnings per share increased by 19% to $0.31 in Q3 2025 from $0.26 in Q3 2024 [23] - Free cash flow improved by $5 million to -$87 million for the nine months ended September 30, 2025 [24] Business Line Data and Key Metrics Changes - Targeted print offerings increased by 2% as a percentage of total net sales, driven by growth in direct marketing, packaging, and in-store solutions [21] - Direct mail revenue increased by over 6%, packaging by over 9%, and in-store solutions by 11% year-to-date [38] Market Data and Key Metrics Changes - The company continues to monitor macroeconomic pressures such as inflation and high postage costs, which may impact clients' marketing plans [5][6] - The USPS announced no price increase for market-dominant mail in January, which is seen as favorable for marketers [7][39] Company Strategy and Development Direction - The company is investing in AI-powered tools and systems, data and audience intelligence services, and its In-Store Connect retail media network to diversify revenue and return to net sales growth by 2028 [4] - The strategic focus is on maximizing savings for clients while increasing marketing effectiveness through innovative solutions [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future growth of In-Store Connect, citing strong sales lift results from campaigns [16][17] - The company anticipates a similar seasonal pattern for free cash flow and net debt, expecting significant positive cash flow in Q4 2025 [24][29] Other Important Information - The company returned $19 million of capital to shareholders year-to-date through dividends and share repurchases [26] - The adjusted EBITDA guidance for 2025 has been narrowed to between $190 million and $200 million [29] Q&A Session Summary Question: Trends in targeted print categories - Management noted that catalog sales are muted due to postal increases, while direct mail, packaging, and in-store solutions are seeing growth [38] Question: Impact of USPS postponing price increase - Management indicated that the postponement is positive, but concerns remain about future postal rate increases [39][60] Question: Updated guidance ranges - Management discussed variability in direct mail and reaffirmed the midpoint of the sales outlook for Q4 [43][46] Question: In-Store Connect deployment updates - Management reported increased interest from clients and a strong pipeline for In-Store Connect, with positive feedback from recent industry events [49][50]

Financial Data and Key Metrics Changes - In Q1 2025, net sales were $629 million, a decrease of 2% compared to Q1 2024, excluding the divestiture of European operations [23] - Adjusted EBITDA was $46 million in Q1 2025, down from $51 million in Q1 2024, with the adjusted EBITDA margin declining from 7.7% to 7.2% [24] - Adjusted diluted earnings per share doubled to $0.20 in Q1 2025 from $0.10 in Q1 2024, primarily due to higher net earnings and lower interest expense [26] - Free cash flow was negative $100 million in Q1 2025, compared to negative $70 million in Q1 2024, mainly due to timing of working capital [26] Business Line Data and Key Metrics Changes - Organic net sales decline was primarily due to lower paper, logistics, and agency solution sales, including the loss of a large grocery client [23] - Revenue as a percentage of total sales increased by 3% in Latin America and 2% in targeted print offerings, offset by a 4% decrease in large scale print offerings [23] Market Data and Key Metrics Changes - The company is closely monitoring the impacts of tariffs and recessionary pressures on clients' businesses, with tariffs affecting less than 11% of procurement spend [6][7] - The U.S. Postal Service announced a 10% increase in postage costs expected to take effect on July 13, which may impact many mailing clients [8] Company Strategy and Development Direction - The company is focused on becoming a marketing experience (MX) company, integrating creative production and media across digital and physical channels [5] - Strategic investments are being made in innovative solutions and talent while managing economic uncertainties [5] - The acquisition of Enru's co-mail assets aims to enhance postal optimization solutions and increase co-mail volumes [10] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are signs of dislocation in the market due to tariffs, there hasn't been a significant pullback in client marketing plans [40][41] - The company expects organic net sales to decline by 2% to 6% in 2025, with adjusted EBITDA anticipated to be between $180 million and $220 million [31][34] - Management is optimistic about the potential for new client acquisitions and the effectiveness of integrated marketing solutions [47][48] Other Important Information - The company completed the sale of its European operations for approximately $42 million [28] - The company has increased its dividend by 50% from 2024 and has repurchased 1.2 million shares of Class A common stock year-to-date in 2025 [29] Q&A Session Summary Question: How has the external environment impacted demand outlook? - Management indicated that while there are some adjustments in marketing plans due to tariffs, there hasn't been a significant pullback in demand [40][41] Question: What are the implications of the upcoming postal rate increase? - Management noted that clients have built the 10% increase into their plans, and there is potential for opportunities to offset this increase through testing of price elasticity [43][46] Question: Can you elaborate on the acquisition of Enru and its benefits? - The acquisition brings additional capabilities in high-density mailing and equipment upgrades, enhancing the company's co-mailing solutions [50][51] Question: What is the current status of in-store connect clients? - The company has expanded its in-store connect presence to over 45 stores, with plans for further growth in the mid-market grocery space [52][53] Question: How is the company leveraging AI in its marketing efforts? - The rollout of Audience Builder 2.0 is enhancing the ability to utilize the data stack for targeted marketing, showing strong performance in responsiveness [68][70]

Financial Data and Key Metrics Changes - In Q1 2025, net sales were $629 million, a decrease of 2% compared to Q1 2024, excluding the divestiture of European operations [23] - Adjusted EBITDA was $46 million in Q1 2025, down from $51 million in Q1 2024, with the adjusted EBITDA margin declining from 7.7% to 7.2% [24] - Adjusted diluted earnings per share doubled to $0.20 in Q1 2025 from $0.10 in Q1 2024, primarily due to higher net earnings and lower interest expense [26] - Free cash flow was negative $100 million in Q1 2025, compared to negative $70 million in Q1 2024, mainly due to timing of working capital [26] Business Line Data and Key Metrics Changes - Organic net sales decline was primarily due to lower paper, logistics, and agency solution sales, including the loss of a large grocery client [23] - Revenue as a percentage of total sales increased by 3% in Latin America and 2% in targeted print offerings, offset by a 4% decrease in large scale print offerings [23] Market Data and Key Metrics Changes - The company is closely monitoring the impacts of tariffs and recessionary pressures on clients' businesses, with tariffs affecting less than 11% of procurement spend [6][7] - The U.S. Postal Service announced a 10% increase in postage costs expected to take effect on July 13, which may impact many mailing clients [8] Company Strategy and Development Direction - The company is focused on becoming a marketing experience (MX) company, integrating creative production and media across digital and physical channels [5] - Strategic investments are being made in innovative solutions and talent while managing economic uncertainties [5] - The acquisition of Enru's co-mail assets aims to enhance postal optimization solutions and increase co-mail volumes [10] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are signs of dislocation in the market due to tariffs, there hasn't been a significant pullback in client demand [41] - The company expects organic net sales to decline by 2% to 6% in 2025, with adjusted EBITDA anticipated to be between $180 million and $220 million [31] - Management is optimistic about the potential for new client acquisitions and the effectiveness of integrated marketing solutions [47] Other Important Information - The company completed the sale of its European operations for approximately $42 million [28] - The company has increased its dividend by 50% from 2024 and has repurchased 1.2 million shares of Class A common stock year-to-date in 2025 [29] Q&A Session Summary Question: How has the external environment impacted demand outlook? - Management indicated that while there are some adjustments in marketing plans due to tariffs, overall demand has not significantly changed [41][42] Question: What are the implications of the upcoming postal rate increase? - Management noted that clients have built the 10% increase into their plans, and there is potential for promotional opportunities to offset this increase [46] Question: Can you elaborate on the acquisition of Enru's co-mail assets? - The acquisition brings additional capabilities in high-density mailing and equipment upgrades, enhancing the company's offerings [50][51] Question: What is the current status of in-store connect clients? - The company has expanded its in-store connect presence to over 45 stores, with plans for further growth [52] Question: How does the company utilize AI in its marketing strategies? - The company is rolling out Audience Builder 2.0, which leverages AI to enhance data accessibility and improve marketing performance [68][70]

Financial Data and Key Metrics Changes - In Q1 2025, net sales were $629 million, a decrease of 2% compared to Q1 2024, excluding the divestiture of European operations [23] - Adjusted EBITDA was $46 million in Q1 2025, down from $51 million in Q1 2024, with the adjusted EBITDA margin declining from 7.7% to 7.2% [24] - Adjusted diluted earnings per share doubled to $0.20 in Q1 2025 from $0.10 in Q1 2024, primarily due to higher net earnings and lower interest expenses [25] - Free cash flow was negative $100 million in Q1 2025, compared to negative $70 million in Q1 2024, mainly due to timing of working capital [25] Business Line Data and Key Metrics Changes - Organic net sales decline was primarily due to lower paper, logistics, and agency solution sales, including the loss of a large grocery client [23] - Revenue as a percentage of total sales increased by 3% in Latin America and 2% in targeted print offerings, offset by a 4% decrease in large scale print offerings [23] Market Data and Key Metrics Changes - The company is closely monitoring the impacts of tariffs and recessionary pressures on clients' businesses, with tariffs affecting less than 11% of procurement spend [6][7] - The U.S. Postal Service announced a 10% increase in postage costs expected to take effect on July 13, which may impact many mailing clients [8] Company Strategy and Development Direction - The company is committed to growing its offerings through strategic investments in innovative solutions and superior talent while managing economic uncertainties [5] - Quad's focus on generative AI and partnerships with Google Cloud aims to enhance marketing effectiveness and personalization at scale [12][34] - The acquisition of Enru's co-mail assets is intended to expand postal optimization solutions and increase co-mail volumes [11][49] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are indications of dislocation in demand due to tariffs, there has not been a significant pullback in client marketing plans [41] - The company expects organic net sales to decline by 2% to 6% in 2025, with adjusted EBITDA anticipated to be between $180 million and $220 million [31][32] - Management remains cautious about potential economic slowdowns and is prepared to adapt to changing demand environments [32] Other Important Information - The company completed the sale of its European operations for approximately $42 million and is progressing with the sale of additional properties [28] - The company increased its dividend by 50% from 2024 and has repurchased 1.2 million shares of Class A common stock year-to-date in 2025 [29] Q&A Session Summary Question: How has the external environment impacted demand outlook? - Management indicated that while there are some adjustments in marketing plans due to tariffs, there hasn't been a significant trend of pullback in demand [41][42] Question: What are the implications of the upcoming postal rate increase? - Management noted that clients have built the 10% increase into their plans, and there is potential for opportunities if the postal service adjusts its pricing strategy [46] Question: Can you elaborate on the acquisition of Enru and its benefits? - The acquisition brings additional capabilities in high-density mailing and equipment upgrades, enhancing the company's co-mailing solutions [49][50] Question: What is the current status of in-store connect clients? - The company has expanded its in-store connect offering to over 45 stores, with plans for further growth in the mid-market grocery space [52][53] Question: How is the company leveraging AI in its marketing efforts? - The rollout of Audience Builder 2.0 is enhancing the ability to utilize the data stack for targeted marketing, showing strong performance in responsiveness [68][69]