Quad/Graphics, Inc. Q4 FY2025 earnings call

• Achieved full year 2025 financial guidance, strong cash flow for investments, debt reduction, and shareholder returns. - Advanced revenue diversification strategy, direct mail performed well above expectations. - Betty Creative and Rise Media agencies had visible work for leading brands. - Expanded agencies with new offices in Austin and Mexico City. - Applied AI in various areas for cost efficiency and revenue generation. - Completed integration of Andrews co-mail volume and high-density capabilities. - Recognized employees, closed Thomaston, Georgia plant. - Promoted Dave Honan to President, aligned marketing and sales under Chief Revenue Officer

In 2025, net sales were $2.4 billion, a 4.8% decline compared to 2024 excluding European divestiture. Targeted print offerings like direct mail, packaging, in-store, and QuadMed employer sponsored health care had increased revenue mix. Fourth quarter 2025 net sales were $631 million, down 5.7% from 2024. Adjusted EBITDA in Q4 2025 was $55 million vs $63 million in 2024. Full year 2025 adjusted EBITDA was $196 million vs $224 million in 2024. Adjusted diluted earnings per share in Q4 2025 was $0.36, full year 2025 was $1.01. Free cash flow in 2025 was $51 million vs $56 million in 2024. Net debt reduced by $42 million in 2025, total debt reduced by $726 million from 2020 - 2025. 2026 net sales expected to decline 1% - 5% excluding European divestiture, adjusted EBITDA expected $175M - $215M, free cash flow $40M - $60M, capital expenditures $55M - $65M

• 2026 net sales expected to decline 1% to 5% excluding European divestiture midpoint 3% decline. - Full year 2026 adjusted EBITDA expected $175M - $215M midpoint $195M. - 2026 free cash flow expected $40M - $60M midpoint $50M. - Capital expenditures $55M - $65M, net debt leverage expected to decrease to ~1.5x by end of 2026. - 2028 outlook for net sales growth, adjusted EBITDA margin improvement, free cash flow conversion increase, and maintaining net debt leverage 1.5x - 2.0x

• Postal rate increases could affect print and marketing spend. - Tariffs and inflationary pressures on clients. - Uncertainty regarding postal service rate trajectory and its impact on direct mail and catalogs. - Seasonality of business could affect financial results

Q: About direct mail growth trends and momentum into 2026 and beyond.

A: Direct mail is a responsive channel, DM agency uses data stack for targeting. Postal impact and combination with other marketing efforts are factors.

Q: Postal rate increase delay and effect on catalogs.

A: Catalogs have further declined due to postal rate baseline outpacing inflation, but Quad offset damage with acquisitions.

Q: In-store connect pipeline and deployments.

A: In-store media is a bet, acceleration in conversations and opportunities, but takes longer for organizations to decide.

Q: 2026 guidance ranges factors.

A: Sales affected by Postal and momentum of targeted print categories. Margins lifted by targeted print mix.

Q: Capital allocation.

A: Balanced approach, possible tuck-in acquisitions, CapEx important, strong return to shareholders with dividends and buybacks, maintaining low debt leverage