QuadGraphics 2025 Q2 Earnings Strong Recovery as Net Loss Narrows 96%

Quad/Graphics (QUAD) reported its fiscal 2025 Q2 earnings on Jul 30th, 2025. The company saw a significant improvement in its bottom line, as net losses were substantially reduced by 96.4% from the previous year, reflecting effective cost management. Despite a 10% decrease in revenue, Quad/Graphics maintained a strong focus on strategic areas for growth. The company reiterated its full-year guidance, projecting a 2% to 6% decline in net sales and an adjusted EBITDA between $180 million to $220 million, in line with expectations.

Revenue

Quad/Graphics experienced a 9.8% decline in total revenue, reaching $571.90 million in 2025 Q2 compared to $634.20 million in 2024 Q2. This decrease was primarily attributed to reduced sales in paper and logistics, as well as the impact of the company's European operations divestiture.

Earnings/Net Income

Quad/Graphics reported stable earnings per share (EPS) of $0.00 in 2025 Q2, consistent with the previous year. The company successfully narrowed its net loss to $0.1 million, a significant improvement from the $2.8 million net loss reported in 2024 Q2, indicating effective cost control and strategic adjustments.

Post-Earnings Price Action Review

The strategy of buying QUAD stock following an earnings beat and holding for 30 days resulted in moderate returns, but it underperformed the benchmark. While the strategy delivered a 77.04% return, it lagged behind the benchmark return of 87.61%. The Sharpe ratio of 0.19 suggested a reasonable risk-adjusted return, yet the strategy's maximum drawdown stood at 0%, indicating a lack of volatility. This performance reflects the challenges faced in managing risk and generating competitive returns within the specified holding period. Investors may find the strategy's stability appealing, but the underperformance highlights the need for improvements or alternative approaches to enhance returns relative to the benchmark.

CEO Commentary

Joel Quadracci, Chairman, President, and CEO of Quad, expressed satisfaction with the second quarter results, emphasizing the company's strategic investments in data and audience intelligence, AI-enabled tools, and the In-Store Connect retail media network. He highlighted the competitive advantage offered by Quad's proprietary data stack, which facilitates targeted marketing. Quadracci remains confident in Quad's vision for diversified growth and improved efficiencies, despite challenges posed by lower net sales due to reduced paper and logistics sales.

Guidance

Quad/Graphics reaffirmed its full-year 2025 financial guidance, anticipating an adjusted annual net sales change of a 2% to 6% decline and an adjusted EBITDA between $180 million to $220 million. The company aims to generate free cash flow of $40 million to $60 million, with capital expenditures between $65 million and $75 million. The year-end debt leverage ratio is expected to be approximately 1.5x, underscoring the company's commitment to financial stability amid macroeconomic uncertainties.

Additional News

Quad/Graphics has been actively pursuing strategic initiatives, including a partnership with Vallarta Supermarkets to expand its In-Store Connect retail media network. This collaboration aims to enhance in-store advertising and engagement with high-value consumer audiences. Additionally, Quad continued its share repurchase program, buying back 1.4 million shares in 2025, bringing total repurchases to 7.3 million shares since 2022, representing about 13% of outstanding shares as of March 31, 2022. The company also declared a quarterly dividend of $0.075 per share, with the next payment scheduled for September 5, 2025, reflecting its commitment to returning value to shareholders.