Earning Date, Transcript Summary & Report

Record Quarterly Revenue: We finished 2024 on a really positive note as we built on the large enterprise account momentum from the third quarter and delivered our best quarter of the year and second best quarterly revenue in the history of Ranpak.

E-commerce Holiday Success: We experienced an outstanding e-commerce-led holiday season in North America, which drove double-digit volume growth across the organization in the fourth quarter and pushed us to double-digit volume growth for the year as well.

Automation Revenue Surge: We grew automation revenue by more than 40%, and we expect it to grow another 50% in 2025.

CapEx Decline and Cash Generation: CapEx declined by 40%, and we got back to the mode of generating cash.

APAC Market Expansion: We opened up our Malaysia facility to start serving the APAC market, reducing our production and logistics costs to serve the region.

Midpoint Guidance Achieved: We hit the midpoint of our top line guide and the higher end of our adjusted EBITDA guide.

E-commerce Revenue Surge: Consolidated net revenue increased 17% on a constant currency basis for the quarter, driven by 12% volume growth as e-commerce activity drove outsized growth in North America and automation had its largest revenue quarter ever.

North America Sales Surge: North America business was the engine that drove top line performance with sales up 36% and volumes up nearly 40%.

Adjusted EBITDA Growth: Adjusted EBITDA increased 8% for the quarter and 14% for the year, resulting in us achieving the higher end of our guide coming into the year, which was for growth of 5% to 16% on a constant currency basis.

Automation Growth Expectations: We expect a meaningful growth in automation again in 2025 as we look to make a dent in our goal to get to $100 million plus for automation.

Margin Improvement Initiatives: We have enacted internal initiatives to improve margins as we expect to achieve the full benefit of our optimization efforts put in place at the end of 2024.

Strong Liquidity Position: We completed 2024 with a strong liquidity position and refinanced credit facility, with a cash balance of $76.1 million and no drawings on our revolving credit facility.

CapEx Reduction Announcement: Our CapEx for the year was $33.1 million, a reduction of 40% from 2023, marking the end of our multiyear investment cycle.

Debt Reduction Strategy: We expect to generate roughly $20 million in cash in 2025 at today’s currency levels, which provide us with the ability to pay down roughly $50 million of debt to help lower our interest burden and gross leverage profile.

Earnings Per Share Miss: Ranpak Holdings Corp. reported an EPS of $-0.1, missing expectations of $-0.01, indicating a failure to meet market expectations for profitability.

European Market Challenges: The company experienced a challenging environment in Europe, particularly post-U.S. election, which negatively impacted performance and activity due to uncertainty about tariffs.

Regional Revenue Performance: Despite overall revenue growth, the European and APAC regions only saw a combined revenue increase of 1% on a constant currency basis, indicating weaker performance compared to North America.

Automation Sales Impact: Automation sales, while expected to grow, were a significant drag on profitability, contributing a negative $7 million to adjusted EBITDA for the year, highlighting ongoing challenges in this segment.

Market Tightness and Operational Challenges: The North American paper market became increasingly tight, leading to short-term inefficiencies in freight and logistics that temporarily impacted margins, suggesting operational challenges ahead.

Revenue and EBITDA Reduction: The company anticipates a non-cash net revenue and adjusted EBITDA reduction of $3 million to $5 million in 2025 due to the recognition of warrant expense against Amazon revenue, which could complicate financial reporting.

Conservative 2025 Outlook: The overall guidance for 2025 reflects a somewhat conservative outlook, acknowledging a continued challenging near-term backdrop in Europe, which may hinder growth prospects.