Ranpak Q2 Earnings Call Highlights

Ranpak NYSE: PACK reported second-quarter revenue growth driven by a sharp increase in automation equipment sales, while management said it remains on track to meet its full-year outlook and generate roughly $60 million in automation revenue in 2026. Chairman and CEO Omar Asali said automation revenue rose 139% year over year on a constant-currency basis, excluding the impact of warrants. The company saw strong automation activity in both North America and Europe, including continued deployments with Walmart and Medline as well as new customer activity. Automation delivered another quarter of strong growth, Asali said, adding that the business is expected to be a long-term growth driver. He said Ranpak has also formed partnerships with warehouse integrators, including an integrator focused on automated storage and retrieval systems, to offer end-of-line packaging solutions to additional accounts.

Consolidated net revenue increased 12.2% year over year on a constant-currency basis during the second quarter. Excluding the impact of warrants, constant-currency revenue growth was 12.6%. Foreign exchange added 1.8 percentage points to reported top-line growth, resulting in reported revenue growth of 14% for the quarter, according to management. North American revenue increased 8.5%, or 9.4% excluding warrants. The region’s automation revenue grew more than 250% excluding warrants, while the company’s protective packaging systems, or PPS, business was a slight detractor as its distribution channel faced difficult comparisons against prior-year growth. In Europe and Asia-Pacific, net revenue increased 15.4% on a constant-currency basis. Automation revenue rose 103.7%, while PPS volume grew 4.2%, led largely by strength in Europe, management said. Overall PPS volumes increased 2.4% year over year, marking volume growth in 11 of the past 12 quarters. Asali said Europe again outperformed, while North America continued to see stronger results from large enterprise customers than from the distribution channel. He said distribution-channel conditions improved somewhat late in the quarter and should improve further in the second half as comparisons normalize and new products gain traction. Ranpak cited positive customer reception for Guardian 24, a compact packaging unit that the company said can offer cost savings compared with foam. The company is also pursuing growth in cushioning, void fill, wrapping and cold-chain packaging.

Adjusted EBITDA increased by $2.6 million to $19.1 million on a reported basis. On a constant-currency basis, adjusted EBITDA increased 13.9%, or 15.8% excluding the effect of warrants. Gross profit increased 17.6% on a constant-currency basis, or 18.6% excluding a $1.7 million non-cash provision associated with warrants. Gross margin improved 150 basis points from the prior-year quarter.