Quad/Graphics (QUAD) Q1 2026 earnings summary

Executive summary

• Q1 2026 results met expectations, with steady profitability and margin expansion versus Q1 2025, despite a 7.7% net sales decline to $581 million, or 4.3% excluding the European divestiture.

• Strategic investments in marketing solutions, audience strategy, automation, and AI are driving growth and efficiency.

• $7 million returned to shareholders in Q1 via $6 million in dividends and $1 million in share repurchases.

• Cost discipline maintained amid macroeconomic challenges, including inflation, supply chain, and postage rate pressures.

• Net earnings rose to $6.2 million ($0.13 per diluted share), up from $5.8 million ($0.11 per share) in Q1 2025.

Financial highlights

• Net sales for Q1 2026 were $581 million, down 7.7% year-over-year, or 4.3% excluding the European divestiture.

• Adjusted EBITDA was $45 million (7.7% margin), nearly flat compared to $46 million (7.2% margin) in Q1 2025.

• Adjusted diluted EPS rose 25% to $0.25, driven by higher net earnings and lower interest expense.

• Free cash flow was negative $107 million, down from negative $100.3 million in Q1 2025, due to higher inventories and capex.

• Net debt rose to $427 million at March 31, 2026, with a leverage ratio of 2.19x.

Outlook and guidance

• 2026 guidance: adjusted net sales decline of 1% to 5%, adjusted EBITDA of $175–$215 million, free cash flow of $40–$60 million, capital expenditures of $55–$65 million, and year-end net debt leverage ratio of approximately 1.5x.

• Adjusted EBITDA margin projected to rise to 8.4% in 2026.

• Long-term outlook targets net sales growth and adjusted EBITDA margin of 9.4% by 2028.

• Management remains focused on disciplined cost management and long-term growth despite macroeconomic challenges.