Core Viewpoint - Eastman Kodak Company is demonstrating significant signs of business and balance sheet recovery in 2025, driven by margin expansion, growth opportunities, and a pension reversion event that will reduce leverage, indicating potential upside for investors interested in operational recovery [1]. Financial Performance - Kodak's stock has outperformed the industry over the past six months, with a 29% increase compared to the industry's 23.6% growth [2]. - In Q3 2025, Kodak's consolidated revenues reached $269 million, a modest increase from $261 million a year earlier, while gross profit surged to $68 million from $45 million, raising gross margin to 25% from 17% [4]. - Operational EBITDA for Q3 2025 was reported at $29 million, a significant increase from $1 million in the prior-year quarter, indicating broad-based improvement in the underlying business [5]. Segment Performance - The Advanced Materials & Chemicals (AM&C) segment is emerging as a key growth driver, with revenues rising 15% year over year to $82 million, supported by industrial film, chemicals, and motion picture demand [7]. - Kodak's cGMP pharmaceutical manufacturing facility is now certified, allowing the company to manufacture regulated products, starting with diagnostic reagents, which could offer higher stability and margin potential [8]. - The film business is experiencing a resurgence due to increased capacity and demand, with Kodak investing heavily in film finishing lines and launching a direct distribution brand for still film [9]. Print Division - Although print revenues slightly declined year over year in Q3, the profitability of the print division improved significantly, with Operational EBITDA swinging from negative $9 million to positive $8 million [10]. - Kodak continues to invest in a full print ecosystem, which supports overall cash generation and reduces downside risk for shareholders [11]. Balance Sheet and Future Outlook - Kodak is nearing completion of its U.S. pension reversion process, expecting approximately $600 million in reversion proceeds, which will be central to its deleveraging plan [12]. - The company plans to use a significant portion of the cash to repay term loans, reducing debt to around $200 million and lowering future interest expenses, with expectations to exit 2025 with over $300 million in cash [13]. - Overall, Kodak is positioned for a stronger future with improving profitability, scaling into higher-value markets, and a significant reduction in debt from the pension reversion [14].