International Paper (IP) Q4 2025 earnings summary

Executive summary

• Announced plan to separate into two independent public companies focused on North America and EMEA packaging, with completion expected in 12–15 months and distinct leadership and strategies for each.

• DS Smith acquisition integrated, creating regional leaders with $15.2B (NA) and $8.5B (EMEA) 2025 net sales.

• Completed sale of Global Cellulose Fibers business for $1.5 billion, with a $1.07 billion impairment charge recorded.

• Transformation initiatives and 80/20 strategy driving significant cost savings, margin expansion, and operational improvements.

• Significant progress on profitable growth strategy, with above-market growth in North America and cost actions in EMEA.

Financial highlights

• 2025 enterprise net sales: $23.63B; North America $15.2B, EMEA $8.5B; adjusted EBITDA: $2.98B (enterprise), $2.3B (NA), $784M–$800M (EMEA).

• 2025 North America adjusted EBITDA grew 37% year-over-year; volume growth outpaced market by 3–4 percentage points in Q4.

• 2025 adjusted EBIT and EPS impacted by $958M accelerated depreciation, $2.47B goodwill impairment, and $0.63B restructuring charges.

• 2025 negative free cash flow of $159M, with capital expenditures totaling $1.86B.

• Fourth quarter 2025 net sales were $6.01B, with a loss from continuing operations of $2.36B.

Outlook and guidance

• 2026 enterprise net sales projected at $24.1B–$24.9B, adjusted EBITDA $3.5B–$3.7B, and free cash flow $300M–$500M.

• 2026 North America EBITDA target: $2.5B–$2.6B (+9–13% YoY); EMEA: $1.0B–$1.1B (+25–38% YoY), with growth driven by commercial and cost-out benefits.

• 2027 enterprise EBITDA target: $5B, with North America contributing ~$3.5B and EMEA ~$1.5B.

• Q1 2026 adjusted EBITDA outlook: $740M–$760M; North America $534M; EMEA expected roughly in line with Q4.

• Guidance excludes potential price realization and does not reflect full impact of recent winter storms.