The ODP Corporation

ODP reported total revenue of $1.6 billion for Q2 2025, down 8% year over year. GAAP operating income was $9 million versus $400,000 last year, and adjusted operating income was $25 million versus $33 million. Adjusted EBITDA was $47 million versus $57 million, and adjusted net income was $15 million, or $0.51 per diluted share, versus $20 million, or $0.56 per diluted share. Adjusted free cash flow was $13 million versus $5 million last year, and operating cash flow from continuing operations was $16 million, including $9 million of restructuring spend. For the year, management raised adjusted free cash flow guidance to over $115 million, up from prior expectations, and said it expects second-half top-line improvement in ODP Business Solutions and continued strength in retail.

Gerry Smith framed the quarter as evidence that the company’s strategy is working, emphasizing B2B growth, retail discipline, and cash generation. He said ODP is focusing capital on higher-return opportunities, especially hospitality and other adjacent markets, while reducing fixed costs through Optimize for Growth. His tone was upbeat and confident, repeatedly stressing execution, momentum, and shareholder value.

Max Hood said the quarter included $16 million of charges, mostly $13 million tied to restructuring under Optimize for Growth and $3 million of non-cash impairments. He highlighted that adjusted EBITDA was $47 million, adjusted net income was $15 million, and adjusted free cash flow was $13 million, with capex at $12 million versus $19 million last year. Adam Haggard added that year-to-date adjusted free cash flow was $58 million, more than 160% above last year, and that the company has paid down about $35 million of debt so far this year; quarter-end liquidity was $658 million, including $177 million of cash and $481 million of available credit, with total debt of $245 million.

Analysts focused on whether ODP is considering strategic alternatives, what assumptions sit behind the raised free cash flow outlook, tariff exposure, and when top-line growth could turn positive. Management largely declined to discuss strategic alternatives, but reiterated that maximizing shareholder value remains the goal. On cash flow, management said its outlook assumes a relatively stable macro and that it is aggressively managing inventory; on tariffs, it said about 57% of inventory is either MAP priced or exempt and that there were no real MAP pricing impacts in Q2. On growth, management said hospitality and recent large contract wins are the main drivers expected to contribute more meaningfully in the second half of the year and potentially into 2026.