Quad/Graphics Swings to Profit on Reduced Charges, Sales Dip

TL;DR

**QUAD's back in the black, but don't pop champagne yet – sales are still shrinking, so watch those cost controls closely.**

AI Summary

Quad/Graphics, Inc. reported a significant turnaround in net earnings for the three months ended September 30, 2025, achieving $10.2 million compared to a net loss of $24.7 million in the prior year period. However, total net sales decreased by 12.9% to $588.0 million from $674.8 million in Q3 2024, driven by declines in both products and services. For the nine months ended September 30, 2025, the company posted net earnings of $15.9 million, a substantial improvement from a net loss of $55.6 million in the same period of 2024. This improvement was largely due to a sharp reduction in restructuring, impairment, and transaction-related charges, which fell from $81.9 million in the first nine months of 2024 to $23.1 million in 2025. Operating income also saw a positive shift, reaching $26.4 million in Q3 2025 from an operating loss of $4.9 million in Q3 2024. The company's strategic outlook continues to be influenced by seasonality, with higher net sales and operating income typically occurring in the second half of the calendar year due to increased back-to-school and holiday-related advertising.

Why It Matters

Quad/Graphics' return to profitability, despite declining sales, signals a potential stabilization for investors in a challenging print media landscape. The significant reduction in restructuring and impairment charges suggests that past cost-cutting measures are yielding results, which could improve investor confidence. For employees, this might indicate a period of less aggressive workforce reductions, though the overall sales decline still poses long-term challenges. Customers may see a more focused and efficient service offering as the company streamlines operations. In the broader market, Quad's performance reflects the ongoing transformation within the printing industry, where companies must adapt to digital shifts while optimizing traditional revenue streams.

Risk Assessment

Risk Level: medium — While Quad/Graphics achieved net earnings, total net sales for the nine months ended September 30, 2025, decreased by $174.5 million, or 8.9%, to $1,789.3 million from $1,963.8 million in the prior year. This persistent revenue decline, particularly in its core print products like 'Catalog, publications, retail inserts and directories' which fell from $1,087.0 million to $932.9 million year-over-year, indicates ongoing market challenges despite improved profitability from cost management.

Analyst Insight

Investors should monitor Quad/Graphics' ability to stabilize or grow revenue in future quarters, as the current profitability is heavily reliant on reduced restructuring charges rather than top-line growth. Evaluate the effectiveness of their marketing and medical services segments in offsetting traditional print declines. Consider if the current share price adequately reflects the ongoing revenue pressures versus the improved cost structure.

Financial Highlights

revenue

$588.0M

operating Margin

4.5%

total Assets

$1,267.8M

net Income

$10.2M

eps

$0.21

gross Margin

22.8%

cash Position

$6.2M

revenue Growth

-12.9%

Revenue Breakdown

Key Numbers

• $10.2M — Net Earnings (Q3 2025) (Swung from a $24.7M net loss in Q3 2024)
• $588.0M — Total Net Sales (Q3 2025) (Decreased 12.9% from $674.8M in Q3 2024)
• $15.9M — Net Earnings (YTD Sept 2025) (Improved from a $55.6M net loss in YTD Sept 2024)
• $23.1M — Restructuring Charges (YTD Sept 2025) (Significantly down from $81.9M in YTD Sept 2024)
• $26.4M — Operating Income (Q3 2025) (Reversed from a $4.9M operating loss in Q3 2024)
• 37,619,392 — Class A Common Stock Outstanding (As of October 24, 2025)
• $1,789.3M — Total Net Sales (YTD Sept 2025) (Decreased 8.9% from $1,963.8M in YTD Sept 2024)
• $0.21 — Diluted EPS (Q3 2025) (Improved from ($0.52) in Q3 2024)

Key Players & Entities

• Quad/Graphics, Inc. (company) — registrant
• SEC (regulator) — United States Securities and Exchange Commission
• $10.2 million (dollar_amount) — Net earnings for Q3 2025
• $24.7 million (dollar_amount) — Net loss for Q3 2024
• $588.0 million (dollar_amount) — Total net sales for Q3 2025
• $674.8 million (dollar_amount) — Total net sales for Q3 2024
• $15.9 million (dollar_amount) — Net earnings for nine months ended September 30, 2025
• $55.6 million (dollar_amount) — Net loss for nine months ended September 30, 2024
• $81.9 million (dollar_amount) — Restructuring, impairment and transaction-related charges for nine months ended September 30, 2024
• $23.1 million (dollar_amount) — Restructuring, impairment and transaction-related charges for nine months ended September 30, 2025

FAQ

Risk Factors

• Declining Demand for Print Products [high — market]: The company's net sales have decreased by 12.9% in Q3 2025 compared to Q3 2024, driven by declines in both products and services. This indicates a potential ongoing trend of reduced demand for traditional print media, which is a core offering.
• Restructuring and Impairment Charges [medium — operational]: While significantly reduced from $81.9M in YTD Sept 2024 to $23.1M in YTD Sept 2025, these charges indicate ongoing efforts to optimize operations or address underperforming assets. Continued restructuring can disrupt operations and impact profitability.
• Interest Expense Burden [medium — financial]: Interest expense was $12.8M in Q3 2025, a notable portion of the $13.2M earnings before income taxes. This highlights the company's leverage and the impact of debt on profitability.
• Seasonality and Back Half Dependence [medium — market]: The company's performance is heavily influenced by seasonality, with higher sales and income typically in the second half due to holiday advertising. This makes the first half of the year inherently weaker and susceptible to economic downturns affecting seasonal spending.
• Decreasing Cash Position [high — financial]: Cash and cash equivalents decreased from $29.2M at December 31, 2024, to $6.2M at September 30, 2025. This sharp decline warrants attention regarding liquidity and working capital management.

Industry Context

Quad/Graphics operates in the highly competitive printing and marketing services industry. The sector is experiencing secular declines in traditional print volumes, forcing companies to adapt by diversifying into digital services, data analytics, and other marketing solutions. Competitors are also consolidating and investing in technology to improve efficiency and offer integrated services.

Regulatory Implications

The company must comply with financial reporting regulations (e.g., SEC filings like this 10-Q) and environmental regulations related to its manufacturing processes. Changes in accounting standards or environmental laws could impact reporting and operational costs.

What Investors Should Do

1. Monitor the trend in net sales for products and services.
2. Analyze the sustainability of the earnings improvement.
3. Evaluate the company's cash management and liquidity.
4. Assess the impact of seasonality on future quarters.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported net earnings of $10.2M, a significant turnaround from a $24.7M loss in Q3 2024, despite a 12.9% decrease in net sales.
• 2025-09-30: End of Nine Months 2025 — Reported net earnings of $15.9M, a substantial improvement from a $55.6M loss in the prior year, largely due to reduced restructuring charges.
• 2025-10-24: Stock Outstanding Date — 37,619,392 shares of Class A Common Stock were outstanding, providing a basis for EPS calculations.

Glossary

Restructuring, impairment and transaction-related charges, net

Costs associated with reorganizing the company, writing down the value of assets, and expenses related to business transactions like acquisitions or divestitures. (A significant reduction in these charges ($23.1M in YTD 2025 vs. $81.9M in YTD 2024) was a primary driver of the improved net earnings.)

Operating income (loss)

Profitability from core business operations before accounting for interest and taxes. (The company swung to an operating income of $26.4M in Q3 2025 from an operating loss of $4.9M in Q3 2024, indicating improved operational performance.)

Comprehensive income (loss)

Includes net income or loss plus other comprehensive income or loss items, such as foreign currency translation adjustments and changes in the value of certain investments. (Total comprehensive income was $12.3M in Q3 2025, a significant improvement from a loss of $27.2M in Q3 2024, boosted by positive translation adjustments.)

Diluted EPS

Earnings per share calculated after accounting for all potential dilutive securities, such as stock options and convertible bonds. (Diluted EPS improved to $0.21 in Q3 2025 from a loss of ($0.52) in Q3 2024, reflecting the company's return to profitability.)

Year-Over-Year Comparison

Compared to the prior year period, Quad/Graphics has shown a significant turnaround in profitability, moving from net losses to net earnings in both the third quarter ($10.2M vs. -$24.7M) and year-to-date ($15.9M vs. -$55.6M). This improvement is largely attributed to a substantial reduction in restructuring, impairment, and transaction-related charges. However, revenue continues to decline, with total net sales down 12.9% in Q3 and 8.9% year-to-date, reflecting ongoing market pressures. New risks related to declining cash position and the sustainability of earnings improvements should be closely monitored.

Key Financial Figures

• $0.025 — tered Class A Common Stock, par value $0.025 per share QUAD The New York Stock Excha

Filing Documents

• quad-20250930.htm (10-Q) — 2062KB
• exhibit311-ceocertificatio.htm (EX-31.1) — 10KB
• exhibit312-cfocertificatio.htm (EX-31.2) — 10KB
• exhibit32-writtenstmtofceo.htm (EX-32) — 5KB
• quad-20250930_g1.jpg (GRAPHIC) — 32KB
• 0001481792-25-000045.txt ( ) — 9416KB
• quad-20250930.xsd (EX-101.SCH) — 51KB
• quad-20250930_cal.xml (EX-101.CAL) — 74KB
• quad-20250930_def.xml (EX-101.DEF) — 330KB
• quad-20250930_lab.xml (EX-101.LAB) — 684KB
• quad-20250930_pre.xml (EX-101.PRE) — 505KB
• quad-20250930_htm.xml (XML) — 1567KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 31 ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 60 ITEM 4.

Controls and Procedures

Controls and Procedures 62 PART II OTHER INFORMATION 63 ITEM 1A.

Risk Factors

Risk Factors 63 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 63 ITEM 5. Other Information 63 ITEM 6. Exhibits 64

Signatures

Signatures 65 2 Table of Contents

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Condensed Consolidated Financial Statements (Unaudited)

ITEM 1. Condensed Consolidated Financial Statements (Unaudited) QUAD/GRAPHICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (UNAUDITED) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net sales Products $ 459.1 $ 529.8 $ 1,401.9 $ 1,534.6 Services 128.9 145.0 387.4 429.2 Total net sales 588.0 674.8 1,789.3 1,963.8 Cost of sales Products 373.4 439.0 1,156.4 1,273.6 Services 80.7 88.6 245.8 269.2 Total cost of sales 454.1 527.6 1,402.2 1,542.8 Operating expenses Selling, general and administrative expenses 80.9 88.4 244.6 260.2 Depreciation and amortization 19.3 24.4 59.7 79.4 Restructuring, impairment and transaction-related charges, net 7.3 39.3 23.1 81.9 Total operating expenses 561.6 679.7 1,729.6 1,964.3 Operating income (loss) 26.4 ( 4.9 ) 59.7 ( 0.5 ) Interest expense 12.8 17.0 38.4 49.4 Net pension expense (income) 0.4 ( 0.2 ) 1.1 ( 0.6 ) Earnings (loss) before income taxes 13.2 ( 21.7 ) 20.2 ( 49.3 ) Income tax expense 3.0 3.0 4.3 6.3 Net earnings (loss) $ 10.2 $ ( 24.7 ) $ 15.9 $ ( 55.6 ) Earnings (loss) per share Basic $ 0.21 $ ( 0.52 ) $ 0.33 $ ( 1.17 ) Diluted $ 0.21 $ ( 0.52 ) $ 0.32 $ ( 1.17 ) Weighted average number of common shares outstanding Basic 47.5 47.8 47.7 47.6 Diluted 49.7 47.8 50.0 47.6 See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited). 3 Table of Contents QUAD/GRAPHICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in millions) (UNAUDITED) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net earnings (loss) $ 10.2 $ ( 24.7 ) $ 15.9 $ ( 55.6 ) Other comprehensive income (loss) Translation adjustments 1.2 ( 1.4 ) 48.0 ( 8.9 ) Interest rate derivatives adjustments 0.6 ( 1.7 ) ( 0.5 ) ( 1.0 ) Pension benefit plan adjustments 0.3 0.3 0.8 0.8 Other comprehensive income (loss), before tax 2.1 ( 2.8 ) 48.3 ( 9.1 ) Inc

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View this 10-Q filing on SEC EDGAR