Matthews International 2025 Q3 Earnings Strong Performance as Net Income Surges 765.9%

Matthews International reported fiscal 2025 Q3 earnings on August 7th, 2025, with a significant year-over-year increase in net income. The company maintained its fiscal 2025 adjusted EBITDA guidance of at least $190 million, despite a 18.3% decline in total revenue to $349.38 million.

Revenue
Matthews International's total revenue declined by 18.3% year-over-year to $349.38 million in fiscal 2025 Q3. The Memorialization segment reported sales of $203.73 million, while Industrial Technologies generated $87.90 million. The SGK Brand Solutions segment contributed $57.75 million, reflecting a significant drop from the previous year.

Earnings/Net Income
Despite the revenue decline, the company's net income surged 765.9% to $15.39 million, with diluted earnings per share rising 733.3% to $0.50. This marks a substantial improvement in profitability, driven by cost reductions and strategic divestitures. The earnings performance was strong, with a significant year-over-year increase in both net income and EPS.

Price Action
The stock price of Matthews International experienced a 6.39% drop during the latest trading day. However, it has edged up 1.02% during the most recent full trading week. Over the past month, the stock has declined 3.61%.

Post Earnings Price Action Review
A strategy of buying MATW when earnings beat expectations and holding for 30 days resulted in poor performance, with a return of -3.26%. This underperformed the benchmark return of 73.95%. The strategy also indicated a high level of risk, with a maximum drawdown of 0% and a Sharpe ratio of -0.04, despite relatively low volatility of 19.84%.

CEO Commentary
Joseph C. Bartolacci, President and CEO, highlighted strong fiscal 2025 third-quarter performance, with GAAP earnings per share of $0.49, up from $0.06 a year ago. The Memorialization and Industrial Technologies segments reported higher adjusted EBITDA, and corporate costs were reduced by 11.4% year-to-date. The CEO noted benefits from cost reduction actions initiated the previous year, including a 11.4% reduction in corporate costs and ongoing progress in the Industrial Technologies segment despite challenges from litigation with Tesla. The acquisition of The Dodge Company contributed to Memorialization sales growth, with expected earnings accretion. Despite a modest sales decline in Industrial Technologies, the CEO expressed optimism as favorable court rulings led to a $150 million quote backlog converting to orders. Ongoing strategic alternatives evaluation and further debt reduction were emphasized, with a positive tone reflecting confidence in operational progress and future opportunities.

Guidance
Matthews International maintained its fiscal 2025 adjusted EBITDA guidance of at least $190 million, including its estimated 40% share of Propelis adjusted EBITDA from May 1, 2025, through September 30, 2025. The Company expects continued debt reduction in the fourth quarter, supported by operating cash flow and potential sales of its European packaging business. It also anticipates further cost reductions into the next fiscal year following the SGK divestiture.

Additional News
Recent developments include the divestiture of the SGK business, which contributed to the company's adjusted EBITDA and net income. The acquisition of The Dodge Company is expected to be accretive to earnings. Additionally, the company is progressing in its strategic alternatives evaluation with support from J.P. Morgan. The integration of the SGK business with SGS to form Propelis has shown solid operating results, with increased cost synergy estimates. The company also plans to reduce debt further in the fourth quarter, supported by operating cash flow and potential sales of its European packaging business. The company is maintaining its fiscal 2025 adjusted EBITDA guidance of at least $190 million, including its share of Propelis' performance.