Quad/Graphics Q2 2025: Unpacking Contradictions in Postal Rates, Asset Sales, and Market Sentiment

Postal rate dynamics and impact on volume, asset sales and impact on net debt, AI and audience targeting capabilities, and market sentiment and economic outlook are the key contradictions discussed in Quad/Graphics' latest 2025Q2 earnings call.



Revenue and Sales Trends:
- Quad's net sales were $572 million in Q2 2025, down 4% compared to the same quarter last year, excluding the 6% impact from the February 28, 2025 divestiture of European operations.
- The decline was due to lower paper, logistics, and agency solutions sales, including the loss of a large grocery client.

EBITDA and Financial Performance:
- Adjusted EBITDA for Q2 2025 was $43 million, down from $52 million in Q2 2024, with a decline in adjusted EBITDA margin from 8.2% to 7.6%.
- This decrease was primarily attributed to lower sales, increased investments in innovative offerings, and the impact of the European operations divestiture.

Innovation and AI Focus:
- Quad launched Audience Builder 2.0, an AI-powered tool that democratizes access to its large data stack, allowing employees to create complex high-propensity audiences more efficiently.
- The company is integrating a large language model within the tool to enable faster audience creation, enhancing its marketing capabilities.

Postal Rate and Optimization Strategies:
- Quad faces challenges from a 11% postal rate increase, which compounds earlier rate increases that have hurt volume and mail volume.
- In response, Quad is offering postal optimization solutions and offsetting price increases through improved response rates, using its data stack to enhance audience targeting for mail marketing products.