Ranpak's Q2 2025: Key Contradictions on Automation Growth, Gross Margins, and Cost Efficiency

Automation growth and timing, gross margin challenges and recovery, automation revenue projections and timing, cost reduction and efficiency, gross margin expectations are the key contradictions discussed in Ranpak Holdings Corp.'s latest 2025Q2 earnings call.



Volume Growth and Regional Performance:
- Ranpak Holdings Corp reported an 8th consecutive quarter of volume growth, with consolidated net revenue increasing by 3.8% and 5.2% excluding the noncash impact of Amazon warrants, driven by 5.2% volume growth.
- North America was the key driver with sales up 12.2% and volumes up 14.8%, while Europe and Asia Pacific volumes were flat, impacted by tariff and trade uncertainties.

Automation Revenue and Backlog:
- Automation revenue increased by 34% in the quarter, with a robust backlog expected to result in full-year automation revenue of $40 million to $45 million.
- The growth was driven by strong payback profiles for high-volume customers, and a large multiyear deal in progress with a major North American customer.

Cost Reduction and Margin Improvement Initiatives:
- Ranpak took pricing actions and optimized freight and logistics, with expected impacts of $1 million in Q3 and $2 million per quarter in Q4, aiming to improve gross margin by 300 to 500 basis points in North America.
- The initiatives were responses to challenges in North America, including input cost increases and temporary inefficiencies.

Structural Realignment and Operational Efficiency:
- Ranpak realigned its organizational structure to a more global, functionally-based model, with the hiring of a Chief Operating Officer to enhance operational efficiencies.
- This change aims to improve execution and profitability, enabling the company to scale efficiently amid growth challenges.