Rayonier Advanced 2025 Q2 Earnings Severe Loss Amid Revenue Decline

Rayonier Advanced (RYAM) reported its fiscal 2025 Q2 earnings on August 5, 2025, missing expectations with a significant net loss driven by extraordinary challenges and a 18.9% revenue decline to $340 million. The company revised its 2025 Adjusted EBITDA guidance downward to $150–$160 million, reflecting the impact of tariff volatility, operational disruptions, and a non-cash tax charge.

Revenue
Q2 revenue for Rayonier Advanced declined to $340 million, a 18.9% drop from $419 million in the same period the prior year. The decline was driven by soft demand, operational disruptions, and industry-specific challenges across multiple business lines. Cellulose Specialties reported $208 million in revenue, while Paperboard and High-Yield Pulp posted $47 million and $29 million, respectively. Cellulose Commodities contributed $59 million, but the segment faced a 31% year-over-year decline due to reduced non-fluff commodity sales and the impact of the labor strike at the Tartas cellulose plant. Other segments, including Biomaterials ($6 million) and eliminations, also contributed to the overall revenue picture.

Earnings/Net Income
Rayonier Advanced swung to a net loss of $363 million in Q2 2025, with an adjusted net loss of $28 million, driven largely by a $337 million non-cash write-off of Canadian deferred tax assets. On a per-share basis, the company reported a loss of $5.44, a dramatic swing from a profit of $0.17 in the same period the prior year. The loss from continuing operations was $366 million, including the non-cash charge, with adjusted EBITDA at $28 million. The company emphasized that these challenges were non-recurring and expected to stabilize in the second half of the year.

Price Action
The stock price of Rayonier Advanced edged up 2.41% during the latest trading day but fell 4.96% for the most recent full week and 7.71% month-to-date. Post-earnings, the stock underperformed the benchmark with a -24.13% return over a 30-day period, indicating significant market skepticism.

Post Earnings Price Action Review
Following the earnings report, Rayonier Advanced saw a -24.13% return over the 30-day period, underperforming the benchmark by the same amount. The investment strategy based on buying shares after the report resulted in a CAGR of -9.09%, with a maximum drawdown of 0.00% and a Sharpe ratio of -0.14. The negative performance suggests high risk and weak investor confidence following the earnings release.

CEO Commentary
De Lyle Bloomquist, President and CEO of RYAM, stated that the second-quarter results were impacted by extraordinary and largely non-recurring challenges, including tariff volatility, operational disruptions, and significant non-cash charges. These factors are now largely behind the company, and he expressed confidence in the long-term strategic direction. Bloomquist highlighted the company's revised 2025 Adjusted EBITDA guidance of $150 to $160 million and reiterated the long-term plan to nearly double EBITDA by 2027.

Guidance
Rayonier Advanced revised its 2025 Adjusted EBITDA guidance to $150–$160 million, down from the previous implied range of approximately $200 million due to non-cash and isolated issues. The company also provided 2025 Adjusted Free Cash Flow guidance of $-10 to $-25 million, with approximately $30 million expected in the back half of the year. The CEO emphasized that extraordinary headwinds, including tariffs, have peaked and will not impact the long-term strategy. The long-term plan is on track to deliver over $300 million in run-rate EBITDA by the end of 2027.

Additional News
Rayonier Advanced reported a non-cash deferred tax asset write-off of $337 million in the second quarter of 2025, impacting the net loss and effective tax rate. The company noted that these charges were driven by weakness in the Paperboard and High-Yield Pulp businesses and were considered non-recurring. Additionally, RYAM continues to evaluate high-return investments in Biomaterials, including bioethanol and prebiotics facilities, and has secured green capital of €67 million to support these initiatives. The company also suspended production in Paperboard and High-Yield Pulp for part of Q3 to manage inventory and preserve cash flow due to ongoing market weakness. RYAM's long-term strategy remains focused on EBITDA growth, with a target of over $300 million in run-rate EBITDA by the end of 2027.