Quad reaffirms 2026 outlook, including $175M-$215M adjusted EBITDA and $40M-$60M free cash flow, while flagging up to 10% USPS increases

Earnings Call Insights: Quad/Graphics (QUAD) Q1 2026

MANAGEMENT VIEW

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"Our first quarter results were in line with our expectations, and we are on track to achieve our full year 2026 guidance." (Chairman & CEO J. Joel Quadracci)

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"Our strong balance sheet enabled us to return $7 million to shareholders, including $6 million in regular cash dividends and $1 million in share repurchases." (Chairman & CEO Quadracci)

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"In late Q1, oil and gas prices increased sharply, driving up distribution costs and raising input costs tied to petrochemicals used in certain manufacturing processes, most notably ink. In response, Quad implemented a temporary surcharge on ink." (Chairman & CEO Quadracci)

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"Earlier this month, the Postal Service announced the details of its next rate increase expected to take effect on July 12. We estimate this will result in an average postage increase of up to 10% for many of our Co-mail clients." (Chairman & CEO Quadracci)

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"During the first quarter of 2026, net sales were $581 million, a decrease of 4.3% compared to the first quarter of 2025 when excluding the February 28, 2025, divestiture of our European operations." (CFO & Treasurer Anthony Staniak)

OUTLOOK

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"We reaffirm our 2026 guidance as shown on Slide 14." (CFO & Treasurer Anthony Staniak)

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"We continue to expect 2026 net sales to decline 1% to 5% compared to 2025, excluding $23 million of 2025 net sales from the divestiture of our European operations." (CFO & Treasurer Staniak)

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"Full year 2026 adjusted EBITDA is expected to be between $175 million and $215 million" and "We expect 2026 free cash flow to be in the range of $40 million to $60 million." (CFO & Treasurer Staniak)

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"Our net debt leverage ratio is expected to decrease to approximately 1.5x by the end of 2026" and "we may operate above this range at certain times of the year due to the seasonality of our business, investments or acquisitions." (CFO & Treasurer Staniak)

FINANCIAL RESULTS

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"Adjusted EBITDA was $45 million in the first quarter of 2026 as compared to $46 million in the first quarter of 2025, and adjusted EBITDA margin increased from 7.2% to 7.7%." (CFO & Treasurer Staniak)

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"Adjusted diluted earnings per share was $0.25 in the first quarter of 2026 as compared to $0.20 in the first quarter of 2025." (CFO & Treasurer Staniak)

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"Free cash flow was negative $107 million in the first quarter of 2026 as compared to negative $100 million in the first quarter of 2025." (CFO & Treasurer Staniak)

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"As of March 31, 2026, we did not receive payment of principal and interest for the first annual installment of the note receivable totaling $6 million" from the 2025 European divestiture, and "our net debt balance as of March 31, 2026, was $6 million higher than we expected." (CFO & Treasurer Staniak)

Q&A

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Barton Crockett, Rosenblatt Securities: "To what degree is that dampening demand from your marketing clients?"; Chairman & CEO Quadracci: "I don't expect like a big pullback through the end of the year" and "I think in general, we don't see people kind of adjusting plans significantly at this point because of postage."

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Barton Crockett, Rosenblatt Securities: "To what degree do the results that you're seeing in the first quarter and year-to-date, are they consistent with that kind of long-term aspiration you have to return to growth?"; CFO & Treasurer Staniak: "We still think that those are growth areas for us" and "we remain on track for the 2028 inflection point."

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Barton Crockett, Rosenblatt Securities: "Can you give us more detail of what's going on" with the Capmont note payment?; CFO & Treasurer Staniak: "We expect to be paid in full on the note receivable" and "There is no performance benchmark as it relates to the note receivable."

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Mark Zgutowicz, Benchmark: "Just curious how you anticipate or when you anticipate a visible acceleration" in agency; Chairman & CEO Quadracci: "part of this is the transition" from "performance media to now full stack media" and "I feel good about ramping up as we get into -- towards the end of the year, but it's certainly into '27."

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Kevin Steinke, Barrington Research: "is there any meaningful benefit" from the ink surcharge; CFO & Treasurer Staniak: "it is just an offset of the increase in costs" and "this is not a highly significant item."

SENTIMENT ANALYSIS

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Slightly negative (analysts): questions centered on macro/postage demand risk, agency declines, and the missed note installment, including "To what degree is that dampening demand" and "Can you give us more detail of what's going on" (Crockett, Rosenblatt Securities).

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Slightly positive (management): repeated emphasis on tracking to guidance and mitigation actions, including "we are on track to achieve our full year 2026 guidance" and "we are continuing to proactively manage the situation" (Chairman & CEO Quadracci).

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Versus last quarter: management maintained a similar confidence cadence around the 2028 inflection framework, with Q1 emphasizing near-term disruptions (ink surcharge; July USPS increase) while reiterating, "We reaffirm our 2026 guidance" (CFO & Treasurer Staniak).

QUARTER-OVER-QUARTER COMPARISON

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Guidance language remained consistent: Q1 repeated the same 2026 ranges and end-of-year leverage target disclosed in Q4, including "2026 net sales to decline 1% to 5%" and leverage "approximately 1.5x" (CFO & Treasurer Staniak).

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Macro emphasis shifted: Q1 added specific in-quarter actions and triggers, including "implemented a temporary surcharge on ink" and estimating "up to 10%" average postage increases for many Co-mail clients on July 12 (Chairman & CEO Quadracci), while Q4 focused more on structural postal dynamics and broader demand monitoring.

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Analyst focus evolved from Q4’s direct mail and in-store pipeline questions to Q1’s emphasis on agency deceleration timing and the overdue Capmont note installment.

RISKS AND CONCERNS

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"continued postage rate increases" and "cost pressures in our supply chain stemming from the ongoing conflict in the Middle East" were cited as key pressures, with Quad responding through "diversifying suppliers, optimizing inventory planning and taking targeted pricing actions where appropriate." (Chairman & CEO Quadracci)

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"we did not receive payment" of the first Capmont note installment was flagged, and management said, "We are working with Capmont on this past-due payment." (CFO & Treasurer Staniak)

FINAL TAKEAWAY

Quad’s management said Q1 results were in line with expectations and reaffirmed full-year 2026 guidance, while highlighting near-term volatility from petrochemical-driven ink costs (addressed via a temporary surcharge) and a USPS increase expected July 12 that management estimated could lift postage by up to 10% for many Co-mail clients. In Q&A, analysts pressed on whether macro and postage pressures could dampen marketing demand, the timing of an agency rebound, and the overdue $6 million Capmont note installment; management responded that it does not expect a significant pullback through year-end, expects to be paid in full on the note, and continues to position services and targeted print as the path toward the company’s stated 2028 inflection point.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/quad/earnings/transcripts]

MORE ON QUAD/GRAPHICS

* Quad/Graphics, Inc. (QUAD) Q1 2026 Earnings Call Transcript [https://seekingalpha.com/article/4896102-quad-graphics-inc-quad-q1-2026-earnings-call-transcript]
* Quad/Graphics, Inc. 2026 Q1 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4895770-quad-graphics-inc-2026-q1-results-earnings-call-presentation]
* Quad/Graphics, Inc. (QUAD) Q4 2025 Earnings Call Transcript [https://seekingalpha.com/article/4871544-quad-graphics-inc-quad-q4-2025-earnings-call-transcript]
* Quad/Graphics Non-GAAP EPS of $0.20 misses by $0.02, revenue of $581M in-line [https://seekingalpha.com/news/4581122-quad-graphics-non-gaap-eps-of-0_20-misses-by-0_02-revenue-of-581m-in-line]
* Quad projects net sales decline of 1% to 5% in 2026 as targeted print and integrated solutions drive margin improvement [https://seekingalpha.com/news/4553453-quad-projects-net-sales-decline-of-1-percent-to-5-percent-in-2026-as-targeted-print-and]