Quad/Graphics, Inc.

Quad reported second-quarter 2026 net sales of $578 million, up 1% year over year. Adjusted EBITDA was $42 million versus $43 million a year ago, and adjusted EBITDA margin fell to 7.3% from 7.6%. Adjusted diluted EPS was $0.24, up from $0.14, and year-to-date adjusted diluted EPS was $0.48 versus $0.34. Year-to-date adjusted EBITDA was $87 million versus $89 million, and free cash flow was negative $66 million, consistent with last year; Q2 free cash flow was $41 million, up about $7 million year over year. For 2026, Quad reaffirmed guidance for net sales to decline 1% to 5% versus 2025 excluding the European divestiture, adjusted EBITDA of $175 million to $215 million, free cash flow of $40 million to $60 million, capex of $55 million to $65 million, and net debt leverage of about 1.5x by year-end.

Joel Quadracci emphasized that the quarter was in line with expectations and that Quad remains on track for full-year 2026 guidance and its 2028 revenue-growth outlook. He framed the company’s strategy around an integrated marketing 'flywheel' that combines agency, in-store media, packaging and print, with Wakefern, Vallarta and the new West Coast grocer cited as examples of cross-sell momentum. His tone was constructive and confident, but he repeatedly noted a difficult macro backdrop, including postage, petrochemical and logistics pressures.

Tony Staniak said Q2 net sales were $578 million, adjusted EBITDA was $42 million, and adjusted diluted EPS was $0.24, with margin pressure mainly from mix, including higher paper revenue. He highlighted first-half free cash flow of negative $66 million, $41 million of Q2 free cash flow, $54 million less net debt on a seasonally adjusted basis versus a year ago, $208 million of total available liquidity, and a blended debt interest rate of 6.6%. He also noted $66.3 million of remaining share repurchase authorization, $17 million accrued for the Mexican tax litigation, limited payments expected from the Capmont note, and reiterated capital allocation priorities of growth investment, low debt, dividends, and opportunistic buybacks.

Analysts focused on what drove revenue upside beyond paper and logistics, why management did not tighten full-year revenue guidance, and how much margin pressure came from pass-through costs like paper, ink and fuel. Management said they also saw growth in direct mail and in-store print, but those surcharges carry lower profit rates and therefore weigh on gross margin and EBITDA margin. Questions also centered on Wakefern, Vallarta and the new West Coast grocery win; Joel said these deals validate the retail media flywheel and that CPG customers are increasingly drawn by evidence of product movement, not just media exposure. Analysts also pressed on the packaging expansion, where management said the Salt Lake City plant is a lower-capital greenfield project, expected to start in Q4, with low double-digit millions of revenue potential in 2027 and around 10% EBITDA margins at scale.