Quad/Graphics (QUAD) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales were $674.8–$675 million, down 3.6–4% year-over-year, with a net loss of $24.7–$25 million due to higher restructuring and impairment charges, partially offset by productivity gains and cost reductions.

• Adjusted EBITDA for Q3 2024 was $59 million (8.7% margin), up from $57 million (8.2%) in Q3 2023; Adjusted Diluted EPS was $0.26 (up from $0.11).

• Announced sale of majority of European operations for ~$45 million, expected to close by year-end, with significant non-cash impairment charges recorded.

• Strategic focus on marketing experience (MX) solutions, including AI-driven partnership with Google Cloud and expansion of in-store retail media network.

• Strong cash generation and asset sales, including $41 million from Saratoga Springs facility, used for debt reduction and shareholder returns.

Financial highlights

• Q3 2024 net sales: $674.8–$675 million (down from $700–$700.2 million in Q3 2023); year-to-date net sales: $1.96–$2.0 billion (down 9% YoY).

• Adjusted EBITDA: $59 million in Q3 2024 (margin 8.7%); year-to-date Adjusted EBITDA: $161 million (margin 8.2%).

• Adjusted Diluted EPS: $0.26 in Q3 2024 (up from $0.11); year-to-date $0.49 (up from $0.28).

• Free cash flow for the first nine months: negative $91.6–$92 million (vs. negative $18.4 million in 2023), mainly due to non-recurring 2023 inventory benefits.

• Q3 2024 net loss: $24.7–$25 million (vs. $2.7–$3 million loss in Q3 2023); Q3 2024 net loss per share: $0.52 (vs. $0.06 in Q3 2023).

Outlook and guidance

• Full-year 2024 net sales expected to decline ~9%, at the higher end of the guidance range.

• Adjusted EBITDA guidance narrowed to $215–$235 million; free cash flow guidance maintained at $50–$70 million.

• Year-end net debt leverage expected to improve to ~1.5x, below the long-term target range, pending European asset sale.

• Capital expenditures for 2024 expected to be ~$65 million.

• Anticipate Q4 Free Cash Flow of $142–$162 million to meet full-year guidance.