Ranpak (PACK) Q2 2024 earnings summary

Executive summary

• Net revenue for Q2 2024 increased 5.5% year-over-year to $86.4 million, with constant currency net revenue up 5.9% to $89.6 million, driven by 8.8% volume growth, especially in North America.

• Net income was $5.5 million, reversing a net loss of $2.1 million in Q2 2023, aided by $16.1 million from a litigation settlement and $5.4 million from a patent sale.

• Adjusted EBITDA on a constant currency basis rose 7.4% year-over-year to $20.4 million, with margin between 22.8% and 23.6%.

• North America led growth with 17.1% revenue and 20% volume increases, while Europe/Asia volumes grew modestly but faced pricing headwinds and weaker industrial activity.

• Strategic account wins, automation, and the plastic-to-paper shift are driving incremental business and volume growth.

Financial highlights

• Gross profit for Q2 2024 was $31.7 million, up 5.0% year-over-year, with a gross margin of 36.7%-36.8%.

• Net revenue in North America rose 17.1% to $37.7 million, while Europe/Asia revenue declined 1-2% due to pricing pressure despite volume growth.

• Year-to-date net revenue increased 5.3% to $171.7 million; constant currency net revenue reached $178.1 million, up 5.1%.

• Net income for Q2 2024 was $5.5 million, compared to a net loss of $2.1 million in Q2 2023.

• Operating cash flow for the first half of 2024 was $24.8 million, up from $16.6 million in the prior year period.

Outlook and guidance

• Management expects continued volume growth as strategic account initiatives and plastic-to-paper conversion ramp up, with momentum anticipated into 2025.

• Input cost pressures and paper cost volatility are expected in H2, but margin profile is targeted at 37%-38% for the year.

• Sufficient liquidity is anticipated for the next twelve months, supported by $65.1 million in cash and access to a $45 million revolving credit facility.