KRT News & Events

Gross margin and adjusted EBITDA margin for full year 2026 expected to continue to improve compared with the prior year, under current global tariff policy. "Our new paper bags product category continues to perform strongly, expanding steadily and generating meaningful revenue growth. In 2025, we won a significant paper bag contract with one of our largest national chain accounts, and we are actively pursuing further opportunities, some of which are at the final confirmation stage. We are also strengthening this category by supplying generic paper bags to smaller customer accounts, and we expect to continue gaining market share in this category in the coming years. In today's dynamic trade environment, we are confident that Karat's proven global sourcing flexibility and efficient logistics capabilities will support a solid growth trajectory," Yu added.

Reports Q4 revenue $115.62M, consensus $113.95M. "We finished 2025 with a strong fourth quarter, demonstrating the strength and resilience of our business model and our ability to continue to drive profitable growth against an uncertain macroeconomic backdrop. We again achieved double-digit volume growth and our pricing turned positive for the first time since the first quarter of 2023," said Alan Yu, Chief Executive Officer. "Our strategy to diversify sourcing is proving successful, enabling us to continue to strengthen our global supply chain and maintain a 34 percent gross margin, despite significantly higher tariffs and duty costs."

Sees Q1 adjusted EBITDA margin up low double-digits. The company said, "We continue to closely monitor tariff and foreign currency developments and adjust our global supply chain as appropriate. During the fourth quarter of 2025, 46 percent of our goods were sourced from Taiwan, 14 percent from China, 13 percent from the United States, and 11 percent each from Vietnam and Malaysia. Following the recent U.S. Supreme Court ruling on tariffs and the stabilization of the U.S. Dollar and New Taiwan Dollar exchange rates, we expect tailwinds on the margin to be realized beginning in the second quarter of 2026."

Karat Packaging has finalized new sourcing arrangements and begun importing certain products from South America, further diversifying its global supply network and reinforcing its long-term cost structure. The Company also welcomed the recent U.S. reciprocal tariff reduction on Taiwanese goods to a maximum rate of 15 percent without stacking, down from 20 percent. The Company believes this change is significant for Karat, as roughly half of its global sourcing is from the region. The lower tariff environment, together with the new South American arrangements, is expected to position the Company to further enhance its cost structure and long-term financial performance.