The ODP (ODP) Q4 2024 earnings summary

Executive summary

• 2024 was a challenging year with macroeconomic headwinds, lower demand, and competitive pressures impacting both B2C and B2B channels, but core strengths in supply chain and a large B2B base supported resilience and new business wins.

• The company met revised guidance but expressed disappointment in overall results.

• Strategic focus shifted to a B2B pivot, expanding into higher-growth segments like hospitality and healthcare, and entering the $16 billion hospitality industry with a major agreement.

• Launched the "Optimize for Growth" plan to accelerate B2B revenue, reduce retail reliance, and target $1.3 billion in value and $380 million EBITDA uplift over 3-4 years.

Financial highlights

• Q4 2024 revenue was $1.624 billion, down from $1.803 billion in Q4 2023; full-year sales were $7.0 billion, down from $7.8 billion in 2023.

• Q4 adjusted operating income was $32 million (vs. $57 million prior year); full-year adjusted operating income was $173 million (vs. $351 million prior year).

• Q4 adjusted net income was $20 million ($0.66/share), down from $43 million ($1.13/share) last year; full-year adjusted net income was $114 million ($3.30/share), down from $263 million ($6.61/share).

• Q4 adjusted EBITDA was $58 million (vs. $83 million prior year); full-year adjusted EBITDA was $268 million (vs. $459 million prior year).

• Operating cash flow for the year was $159 million, with adjusted free cash flow of $33 million.

Outlook and guidance

• "Optimize for Growth" plan expected to deliver $380 million EBITDA uplift and $1.3 billion in total value creation over its life, with costs of $185–$230 million.

• Expect higher free cash flow in 2025 and stable leverage; guidance for 2025 will be provided in coming quarters due to early-stage B2B segment ramp.

• Strategic focus for 2025 is on B2B growth, new industry segments, and optimizing the retail footprint.

• Capital allocation in 2025 will prioritize core B2B business investments over share repurchases.

• Anticipate growth in B2B, especially hospitality, to offset B2C declines over time.