Ranpak Holdings Corporation

03/05/2026 | Press release | Distributed by Public on 03/05/2026 08:48

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information in this Management's Discussion and Analysis of Financial Condition and Results of Operations should be read together with our consolidated financial statements and related notes set forth in Part II, Item 8, as well as the discussion included in Part I, Item 1A, "Risk Factors," of this Report. This section generally discusses the results of our operations for the year ended December 31, 2025 compared to the year ended December 31, 2024. For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024.
Overview
We are a leading provider of environmentally sustainable, systems-based, product protection and end-of-line automation solutions for e-commerce and industrial supply chains. We provide our PPS systems and paper consumables to distributors and certain select end-users. We operate manufacturing facilities in the United States, Europe and Asia. For our Automation product lines, we currently have dedicated facilities in Shelton, Connecticut and the Netherlands. R Squared Robotics, a division of Ranpak, uses three-dimensional computer vision and artificial intelligence technologies to improve end-of-line packaging and logistics functions.
We have two segments, North America and Europe/Asia. Management evaluates segment performance by net revenue and Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") by geographic region.
Key Performance Indicators and Other Factors Affecting Performance
We use the following key performance indicators and monitor the following other factors to analyze our business performance, determine financial forecasts, and help develop long-term strategic plans:
PPS Systems Base. We closely track the number of PPS systems installed with end-users as it is a leading indicator of underlying business trends and near-term and ongoing net revenue expectations. Our installed base of PPS systems also drives our capital expenditure budgets. The following table presents our installed base of PPS systems as of December 31, 2025 and 2024:
December 31, 2025 December 31, 2024
Change
% Change
PPS Systems
(in thousands)
Cushioning 34.1 34.4 (0.3) (0.9)
Void-Fill 88.8 85.7 3.1 3.6
Wrapping 22.9 22.6 0.3 1.3
Total 145.8 142.7 3.1 2.2
Paper and Other Costs.Paper is a key component of our cost of goods sold and paper costs can fluctuate significantly between periods. We purchase both 100% virgin and 100% recycled paper, as well as blends, from various suppliers for conversion into the paper consumables we sell. The cost of paper supplies is our largest input cost, and we historically have negotiated supply and pricing arrangements with most of our paper suppliers annually, with a view towards mitigating fluctuations in paper cost. Nevertheless, as paper is a commodity, its price on the open market, and in turn the prices we negotiate with suppliers at a given point in time, can fluctuate significantly, and is affected by several factors outside of our control, including inflationary pressures, supply and demand and the cost of other commodities that are used in the manufacture of paper, including wood, energy, and chemicals. For example, energy prices in Europe have experienced recent increased volatility, and such volatility has, in the past, increased the cost of paper. The market for our solutions is competitive and it may be difficult to pass on increases in paper prices to our customers immediately, or at all, which has in the past, and could in the future, adversely affect our operating results. Although we look to pass increased market costs on to our customers to mitigate the impact of these costs, we are unable to predict our ability to pass these costs on to our customers and how much of these increases we will be able to pass on to our customers. As such, we expect some continued pressure on our gross margin in the medium term relative to our historical margin profile.
Effect of Currency Fluctuations. As a result of the geographic diversity of our operations, we are exposed to the effects of currency translation, which has affected the comparability of our results of operations between the periods presented in this Report and may affect the comparability of our results of operations in future periods. Currency transaction exposure results when we generate net revenue in one currency at one time and incur expenses in another currency at another time,
or when we realize gain or loss on intercompany transfers. While we seek to limit currency transaction exposure by matching the currencies in which we incur sales and expenses, we may not always be able to do so.
In addition, we are subject to currency translation exposure because the operations of our subsidiaries are measured in their functional currency which is the currency of the primary economic environment in which the subsidiary operates. Any currency balances that are denominated in currencies other than the functional currency of the subsidiary are re-measured into the functional currency, with the resulting gain or loss recorded in the foreign currency (gains) losses line-item in our Consolidated Statements of Operations and Comprehensive Income (Loss). In turn, subsidiary income statement balances that are denominated in currencies other than USD are translated into USD, our reporting currency, in consolidation using the average exchange rate in effect during each fiscal month during the period, with any related gain or loss recorded as foreign currency translation adjustments in other comprehensive income (loss). The assets and liabilities of subsidiaries that use functional currencies other than the USD are translated into USD in consolidation using period end exchange rates, with the effects of foreign currency translation adjustments included in accumulated other comprehensive income (loss).
We hedge some of our exposure to foreign currency translation with a cross-currency swap. Refer to Note 8 - Derivative Instrumentsto the consolidated financial statements included elsewhere in this Report for additional information. Significant currency fluctuations could impact the comparability of results between periods, while such fluctuations coupled with material mismatches in net revenue and expenses could also adversely impact our cash flows. See "Quantitative and Qualitative Disclosures About Market Risk."
Inflationary Pressures and Other Costs.We have continued to experience inflationary pressures in 2025, which have adversely impacted some of our end-users, such as automotive companies; distributors; electronic manufacturers; machinery manufacturers; e-commerce and mail-order fulfillment firms; and other end-users that are particularly sensitive to reductions in business and consumer spending by their respective customers, and which in turn have impacted our net revenue. Higher costs due to inflation were partially offset by price increases, which mitigated the impact on our operating results. However, our ability to predict or further offset inflationary cost increases in the future or during economic downturns or recessions may be limited or impacted by heightened competition for market share, an unwillingness by our customers to accept price increases or pressure to reduce selling prices if end-users reduce their volume of purchases. Inflationary pressures and associated changing interest rates and borrowing costs may also impact the ability of some of our end-users and suppliers to obtain funds for operations and capital expenditures, which could negatively impact our ability to obtain necessary supplies as well as the sales of materials and equipment to affected end-users. This could also result in reduced or delayed collections of outstanding accounts receivable from end-users, which could impact our cash flows. As a result, to the extent inflationary pressures continue, we expect additional pressure on our net revenue and gross margin. We will continue to evaluate the impact of inflationary pressures on our profitability and cash flows as well as our end-users.
In addition to inflationary pressures, our U.S. operations are subject to the impact of tariffs, largely related to our capital expenditures of our PPS converters, some of which are sourced from China or contain parts and components from China and other Asian countries. We are taking steps to minimize the potential impact of these tariffs by evaluating alternative parts and global suppliers as well as stepping up our efforts to refabricate and refurbish existing machines in our fleet to reduce cost. Our box customization equipment is currently made in Europe and shipped to the United States and thus will be subject to the U.S. tariff on European tariff rate. We are focused on cost reduction and efficiencies to minimize the impact to our customers, and believe in the ongoing value proposition of our equipment.
Non-GAAP Measures
EBITDA and Adjusted EBITDA ("AEBITDA")
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). We also present EBITDA and AEBITDA, which are non-GAAP financial measures, because they are key measures used by our management and board of directors to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating EBITDA and AEBITDA can provide a useful measure for period-to-period comparisons of our primary business operations. We believe that EBITDA and AEBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
EBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; and depreciation and amortization.
AEBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; depreciation and amortization; stock-based compensation expense; foreign
currency (gain) loss; amortization of cloud-based software implementation costs; and, in certain periods, other income and expense items.
We reconcile this data to our GAAP data for the same periods presented.
Constant Currency
We operate globally, and a substantial portion of our net revenue and operations is denominated in foreign currencies, primarily the Euro. We calculate the year-over-year impact of foreign currency movements using prior period foreign currency rates applied to current year results. These "constant currency" change amounts are non-GAAP measures and are not in accordance with, or an alternative to, measures prepared in accordance with GAAP. In addition, constant currency change measures are not based on any established set of accounting rules or principles.
In calculating the Constant Currency (Non-GAAP) % Change, the current year is translated at the average exchange rate for the comparable prior year period, when comparing the current year to the prior year. We believe that our Constant Currency (Non-GAAP) % Change presentation provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
Cautionary Notice Regarding Non-GAAP Measures
Non-GAAP measures, such as EBITDA, AEBITDA, and constant currency change, have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. In particular, non-GAAP financial measures should not be viewed as substitutes for, or superior to, net income (loss) prepared in accordance with GAAP as a measure of profitability or liquidity. Some of these limitations are:
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and AEBITDA do not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•EBITDA and AEBITDA do not reflect changes in, or cash requirements for, our working capital needs;
•EBITDA and AEBITDA do not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;
•AEBITDA does not consider the potentially dilutive impact of stock-based compensation, and in certain periods, other income and expense items, such as restructuring and integration costs;
•constant currency change measures exclude the foreign currency exchange rate impact on our foreign operations; and
•other companies, including companies in our industry, may calculate EBITDA, AEBITDA, and constant currency change differently, which reduces their usefulness as comparative measures.
Consolidated Results of Operations
The following tables set forth our consolidated results of operations for 2025 and 2024, presented in millions of dollars. "NM" represents "not meaningful."
In addition, in our discussion below, we include certain other unaudited, non-GAAP data and Constant Currency (Non-GAAP) % Change data for 2025 and 2024. This data is based on our historical financial statements included elsewhere in this Report. Refer to "Non-GAAP Measures" and "Reconciliation of GAAP to Non-GAAP Measures" for additional information and a reconciliation of EBITDA and AEBITDA to our net loss under GAAP.
Comparison of 2025 to 2024
Year Ended December 31,
Constant Currency (Non-GAAP) % Change (1)
2025 2024
$ Change
% Change
Net revenue $ 395.0 $ 368.9 $ 26.1 7.1 4.7
Cost of sales 264.3 229.1 35.2 15.4 13.0
Gross profit 130.7 139.8 (9.1) (6.5) (9.0)
Selling, general and administrative expenses 114.5 111.9 2.6 2.3
Depreciation and amortization expense 36.0 35.1 0.9 2.6
Other operating expense, net 4.5 5.6 (1.1) (19.6)
Loss from operations (24.3) (12.8) (11.5) 89.8
Interest expense 34.3 28.6 5.7 19.9
Foreign currency gain (5.3) (1.6) (3.7) 231.3
Loss on extinguishment of debt - 4.8 (4.8) NM
Other non-operating income, net (5.8) (20.9) 15.1 NM
Loss before income tax benefit (47.5) (23.7) (23.8) 100.4
Income tax benefit (9.2) (2.2) (7.0) NM
Net loss $ (38.3) $ (21.5) $ (16.8) 78.1 77.7
Non-GAAP
EBITDA $ 53.5 $ 70.2 $ (16.7) (23.8) (26.2)
AEBITDA $ 79.2 $ 83.8 $ (4.6) (5.5) (8.5)
(1)The Constant Currency (Non-GAAP) % Change excludes the impact of foreign currency translation effects when comparing current results to the prior year. In calculating the Constant Currency (Non-GAAP) % Change, the current year results are translated at the average exchange rate for the comparable prior year period, which in this case was 1 Euro to 1.0822 USD. Refer to further discussion in "Non-GAAP Measures."
Net Revenue
In the third quarter of 2025, we changed our presentation of "Other net revenue" to refer to "Automation net revenue." Consistent with prior periods, this line item primarily includes sales of our automated equipment as well as an insignificant amount related to non-paper revenue from packaging systems installed in the field, such as system accessories.
The following table and the discussion that follows compares our net revenue by product line for 2025 and 2024 on a GAAP basis and also presents the Constant Currency (Non-GAAP) % Change. See also "Non-GAAP Measures" for further details:
Year Ended December 31,
Constant Currency (Non-GAAP) % Change (1)
2025 2024
$ Change
% Change
Cushioning $ 142.1 $ 143.9 $ (1.8) (1.3) (4.2)
Void-Fill 177.1 160.8 16.3 10.1 8.4
Wrapping 36.7 35.1 1.6 4.6 2.8
Automation 39.1 29.1 10.0 34.4 29.9
Net revenue $ 395.0 $ 368.9 $ 26.1 7.1 4.7
(1) The Constant Currency (Non-GAAP) % Change excludes the impact of foreign currency translation effects when comparing current results to the prior year. In calculating the Constant Currency (Non-GAAP) % Change, the current year results are translated at the average exchange rate for the comparable prior year period, which in this case was 1 Euro to 1.0822 USD. Refer to further discussion in "Non-GAAP Measures."
Net revenue for 2025 was $395.0 million compared to net revenue of $368.9 million in 2024, an increase of $26.1 million or 7.1% (4.7% on a constant currency basis) and includes a non-cash reduction of $4.1 million to void-fill and $1.0 million to Automation net revenue from the provision for warrants. Net revenue was positively impacted by increases in void-fill,
automation equipment sales, and wrapping, partially offset by a decrease in cushioning. Cushioning decreased $1.8 million, or 1.3%, to $142.1 million from $143.9 million; void-fill increased $16.3 million, or 10.1%, to $177.1 million from $160.8 million; wrapping increased $1.6 million, or 4.6%, to $36.7 million from $35.1 million; and Automation net revenue increased $10.0 million, or 34.4%, to $39.1 million from $29.1 million, for 2025 compared to 2024. The increase in void-fill was primarily due to increased volume from e-commerce activity in North America as we observed more companies shifting from plastic to paper solutions, partially offset by decreases in cushioning from lower industrial activity.
The increase in net revenue for 2025 compared to 2024 is quantified by a 4.8% increase in volume of sales of our paper consumable products, an increase of 2.4% from fluctuations in foreign currency and a 2.3% increase in automated equipment sales, partially offset by a 1.4% non-cash decrease from the provision for warrants, and a 1.0% decrease from price or mix of our paper consumable products.
Cost of Sales
Cost of sales for 2025 totaled $264.3 million, an increase of $35.2 million, or 15.4% (13.0% at constant currency), compared to $229.1 million in 2024. We have quantified the change in cost of sales as follows:
Volume/product mix 4.5 %
Production costs 8.5 %
Foreign currency impacts 2.4 %
Total 15.4 %
The increase in cost of sales was primarily related to an increase in production costs of 8.5%, an increase in the volume/mix of products sold of 4.5%, and fluctuations in foreign currency rates of 2.4%. Production costs include costs from materials and labor and overhead.
Operating expenses
Selling, General and Administrative ("SG&A") Expenses. SG&A expenses for 2025 were $114.5 million, an increase of $2.6 million, or 2.3% (2.0% attributable to fluctuations in foreign currency), from $111.9 million in 2024. The change in SG&A expenses was primarily due to a $2.3 million increase in information technology maintenance costs, a $1.0 million increase in stock-based compensation expense, and a $0.8 million increase in professional service fees, partially offset by a $2.1 million decrease in temporary labor costs compared to 2024, attributable to a shift toward permanent full-time employees and reduced reliance on temporary staffing. Employee compensation decreased $0.3 million from lower bonus related expense but was offset by a $1.3 million increase from foreign currency fluctuations.
Depreciation and Amortization. Depreciation and amortization expenses for 2025 were $36.0 million, an increase of $0.9 million, or 2.6%, from $35.1 million in 2024. The increase in depreciation and amortization was primarily due to an increase in depreciation of building improvements and internal-use software.
Other Operating Expense, Net. Other operating expense, net for 2025 was $4.5 million, a decrease of $1.1 million, or 19.6%, from $5.6 million in 2024. The decrease in other operating expense, net was primarily due to a decrease in loss on disposal of assets of $0.9 million and a $0.3 million decrease in research and development costs in 2025 compared to 2024.
Interest Expense
Interest expense for 2025 was $34.3 million, an increase of $5.7 million, or 19.9%, from $28.6 million in 2024. The increase was primarily due to a $4.4 million decrease in interest income due to the expiration of our interest rate swap during the second quarter of 2024 and a $2.2 million increase in interest expense associated with our First Lien Credit Facilities, partially offset by a $1.5 million decrease in amortization of deferred financing costs during 2025 compared to 2024.
Foreign Currency Gain
Foreign currency gain for 2025 was $5.3 million, a change of $3.7 million from a foreign currency gain of $1.6 million in 2024 due to the volatility in Euro exchange rates compared to USD.
Loss on Extinguishment of Debt
In December 2024, we entered into a First Lien Credit Agreement (the "2024 Credit Agreement"), which consists of senior secured credit facilities of a $410.0 million USD-denominated first lien term facility (the "Term Facility") and a $50.0 million revolving facility available in USD and Euros (the "Revolving Facility" and together with the Term Facility, the "Facilities"). Proceeds from the 2024 Credit Agreement were used to repay amounts outstanding under the Company's
previously outstanding senior secured credit facilities. We recorded a loss on extinguishment of debt of $4.8 million in 2024, comprised primarily of the write-off of unamortized debt issuance costs.
Other Non-Operating Income, Net
Other non-operating income, net was $5.8 million in 2025 and primarily represents a $5.8 million unrealized gain on our strategic investment in Pickle. Other non-operating income, net was $20.9 million in 2024 and primarily represents $16.1 million in litigation proceeds and a $5.4 million gain on the sale of patents, partially offset by a $0.4 million unrealized loss on our strategic investment in Pickle.
Income Tax Benefit
Income tax benefit for 2025 was $9.2 million, or an effective tax rate of 19.4%. Income tax benefit was $2.2 million in 2024, or an effective tax rate of 9.4%. The fluctuation in the effective tax rate between periods is primarily attributable to taxes related to foreign activities and stock-based compensation for the same period in 2025. The difference between the effective tax rate and the combined federal and state statutory rates is primarily due to state income taxes.
EBITDA and AEBITDA
EBITDA and AEBITDA are Non-GAAP measures. Refer to the section "Reconciliation of GAAP to Non-GAAP Measures." EBITDA for 2025 was $53.5 million, a decrease of $16.7 million, or 23.8%, compared to $70.2 million in 2024. AEBITDA for 2025 and 2024 totaled $79.2 million and $83.8 million, respectively, a decrease of $4.6 million, or 5.5% year over year (8.5% decrease at constant currency).
Segment Results of Operations - 2025 and 2024
We have two segments, North America and Europe/Asia. Management evaluates segment performance by net revenue and EBITDA by geographic region. The following tables set forth our net revenue by segment for 2025 and 2024, presented in millions of dollars:
North America
Year Ended December 31,
2025 2024
$ Change
% Change
Cushioning $ 42.2 $ 42.9 $ (0.7) (1.6)
Void-Fill 110.1 94.3 15.8 16.8
Wrapping 20.9 18.8 2.1 11.2
Automation 12.8 7.2 5.6 77.8
Net revenue $ 186.0 $ 163.2 $ 22.8 14.0
Net revenue in North America for 2025 totaled $186.0 million compared to net revenue in North America of $163.2 million in 2024. The increase of $22.8 million, or 14.0%, was attributable to an increase in void-fill, automation, and wrapping, partially offset by a decrease in cushioning sales, and includes a non-cash reduction of $3.7 million in void-fill and $1.0 million in Automation from the provision for warrants. The change in net revenue for North America can be quantified by an increase in volume of 14.3% and an increase from automated equipment sales of 3.4%, partially offset by a non-cash decrease from the provision for warrants of 2.9% and a decrease in the price/mix of our paper consumable products of 0.8%.
Europe/Asia
Constant Currency (Non-GAAP) % Change (1)
Year Ended December 31,
2025 2024
$ Change
% Change
Cushioning $ 99.9 $ 101.0 $ (1.1) (1.1) (5.2)
Void-Fill 67.0 66.5 0.5 0.8 (3.5)
Wrapping 15.8 16.3 (0.5) (3.1) (6.7)
Automation 26.3 21.9 4.4 20.1 14.2
Net revenue $ 209.0 $ 205.7 $ 3.3 1.6 (2.7)
(1) The Constant Currency (Non-GAAP) % Change excludes the impact of foreign currency translation effects when comparing current results to the prior year. In calculating the Constant Currency (Non-GAAP) % Change, the current year results are translated at the average exchange rate for the comparable prior year period, which in this case was 1 Euro to 1.0822 USD. Refer to further discussion in "Non-GAAP Measures."
Net revenue in Europe/Asia for 2025 totaled $209.0 million compared to net revenue in Europe/Asia of $205.7 million in 2024. The increase of $3.3 million, or 1.6%, was driven by increases in automated equipment sales and void-fill, partially offset by a decrease in cushioning and wrapping sales. The increase in net revenue for Europe/Asia can be quantified by an increase of 4.3% from foreign currency fluctuations and an increase of automated equipment sales of 1.5%, partially offset by a decrease in the price/mix and volume of sales of our paper consumable products of 3.6% and 0.5%, respectively.
The following table sets forth segment EBITDA, presented in millions of dollars:
Year Ended December 31,
2025 2024
$ Change
% Change
North America $ 17.9 $ 28.7 $ (10.8) (37.6)
Europe/Asia $ 35.6 $ 41.5 $ (5.9) (14.2)
Segment EBITDA for North America and Europe/Asia includes intersegment royalty charges from North America to Europe/Asia for use of trademarks of $20.4 million for 2025 and $24.0 million for 2024, which eliminates between the segments on a consolidated basis.
Segment EBITDA for North America was $17.9 million for 2025 compared to $28.7 million in 2024, a decrease of $10.8 million, or 37.6%. The decrease was primarily due to higher foreign currency loss, decreased gross profit due to higher production related costs and product mix, an increase in professional service fees, and an increase in information technology maintenance costs. Segment EBITDA includes a $5.8 million unrealized gain on our investment in Pickle in 2025 compared to an unrealized loss of $0.4 million in 2024. Segment EBITDA for 2024 also included a loss on debt extinguishment of $4.1 million and a $5.4 million gain on the sale of a patent which did not reoccur in 2025.
Segment EBITDA for Europe/Asia was $35.6 million for 2025 compared to $41.5 million in 2024, a decrease of $5.9 million, or 14.2%. The decrease was primarily due to a decrease in non-operating income, primarily due to $16.1 million in patent litigation settlement proceeds recorded during 2024 that did not reoccur in 2025. Additionally, cost of sales increased due to higher production costs during 2025 compared to 2024, partially offset by increased foreign currency gains for 2025.
Reconciliation of GAAP to Non-GAAP Measures
As noted above, we believe that in order to better understand the performance of the Company, providing non-GAAP financial measures to users of our financial information is helpful. We believe presentation of these non-GAAP measures is useful because they are many of the key measures that allow management to evaluate more effectively our operating performance and compare the results of our operations from period to period and against peers without regard to financing methods or capital structure. Management does not consider these non-GAAP measures in isolation or as an alternative to similar financial measures determined in accordance with GAAP. The computations of EBITDA, AEBITDA and Constant Currency (Non-GAAP) % Change may not be comparable to other similarly titled measures of other companies. These non-GAAP financial measures should not be considered as alternatives to, or more meaningful than, measures of financial performance as determined in accordance with GAAP or as indicators of operating performance.
The following tables and related notes reconcile certain non-GAAP measures to GAAP information presented in this Report for 2025 and 2024:
Non-GAAP Measures
Constant Currency (Non-GAAP) % Change (6)
Year Ended December 31, $ Change
% Change
2025 2024
Net loss $ (38.3) $ (21.5) $ (16.8) 78.1 77.7
Depreciation and amortization expense - COS 30.7 30.2 0.5 1.7
Depreciation and amortization expense - D&A 36.0 35.1 0.9 2.6
Interest expense 34.3 28.6 5.7 19.9
Income tax benefit (9.2) (2.2) (7.0) NM
EBITDA(1)
53.5 70.2 (16.7) (23.8) (26.2)
Adjustments(2):
Foreign currency gain (5.3) (1.6) (3.7) 231.3
Non-cash impairment losses 0.3 1.2 (0.9) (75.0)
M&A, restructuring, severance 15.9 8.3 7.6 91.6
Stock-based compensation expense 7.6 6.3 1.3 20.6
Amortization of cloud-based software implementation costs(3)
4.1 3.6 0.5 13.9
Cloud-based software implementation costs(4)
2.4 2.3 0.1 4.3
SOX remediation costs 1.5 5.4 (3.9) (72.2)
Loss on extinguishment of debt - 4.8 (4.8) NM
Gain on sale of patents - (5.4) 5.4 NM
Patent litigation settlement - (16.1) 16.1 NM
Unrealized (gain) loss on strategic investments (5.8) 0.4 (6.2) NM
Other adjustments(5)
5.0 4.4 0.6 13.6
AEBITDA(1)
$ 79.2 $ 83.8 $ (4.6) (5.5) (8.5)
(see subsequent footnotes)
(1)Reconciliations of EBITDA and AEBITDA for each period presented are to net loss, the nearest GAAP equivalent.
(2)Adjustments are related to non-cash unusual or infrequent costs such as: effects of non-cash foreign currency remeasurement or adjustment; impairment of returned machines; costs associated with the evaluation of acquisitions; costs associated with executive severance; costs associated with restructuring actions such as plant rationalization or realignment, reorganization, and reductions in force; costs associated with the implementation of the global ERP system; and other items deemed by management to be unusual, infrequent, or non-recurring.
(3)Represents amortization of capitalized costs primarily related to the implementation of the global ERP system, which are included in SG&A.
(4)Third-party professional services and consulting fees related to post-implementation system remediation.
(5)In 2025, Other adjustments includes non-recurring warehouse and transitory costs incurred related to conversion services, non-recurring excess above market procurement costs, and other insignificant items. In 2024, Other adjustments represents primarily non-recurring costs incurred from the outsourcing of paper conversion services, legal expenses and fees related to the Company's patent litigation which was settled in the second quarter of 2024, and other insignificant items.
(6)The Constant Currency (Non-GAAP) % Change excludes the impact of foreign currency translation effects when comparing current results to the prior year. In calculating the Constant Currency (Non-GAAP) % Change, the current year results are translated at the average exchange rate for the prior year period, which in this case was 1 Euro to 1.0822 USD. Refer to further discussion in "Non-GAAP Measures."
Liquidity and Capital Resources
We evaluate liquidity in terms of cash flows from operations and other sources and the sufficiency of such cash flows to fund our operating, investing and financing activities. We believe that our cash and cash equivalents of $63.0 million as of December 31, 2025 and cash flow from operations, together with borrowing capacity under the revolving portion of our senior secured credit facilities, will provide us with sufficient resources to cover our current requirements.
Our main liquidity needs relate to capital expenditures and expenses for the production and maintenance of PPS systems placed at end-user facilities, working capital, including the purchase of paper raw materials, and payments of principal and interest on our outstanding debt. Our AS and APS product lines are for the sale of capital goods and we do not require significant capital expenditures for production equipment to support growth. We expect our capital expenditures to increase as we continue to grow our business, expand our manufacturing footprint, and upgrade our existing systems and facilities. We continue to evaluate our inventory requirements and adjust according to our volume forecasts. Our future capital requirements and the adequacy of available funds will depend on many factors, and if we are unable to obtain needed additional funds, we may have to reduce our operating costs or incur additional debt, which could impair our growth prospects and/or otherwise negatively impact our business. Further, volatility in the equity and credit markets from macroeconomic factors could make obtaining new equity or debt financing more difficult or expensive.
Including finance lease liabilities and financing arrangements and excluding deferred financing costs, we had $410.5 million in debt, $5.5 million of which was classified as short-term, as of December 31, 2025, compared to $415.7 million in debt, $5.6 million of which was classified as short-term, as of December 31, 2024. At December 31, 2025, we did not have amounts outstanding under our $50.0 million revolving credit facility, and we had no borrowings under such facility through March 5, 2026.
Debt Profile
The material terms of our debt are summarized in Note 7 - Long-Term Debtto the consolidated financial statements included elsewhere in this Report.
On December 19, 2024, the Company entered into a First Lien Credit Agreement (the "2024 Credit Agreement"), which consists of senior secured credit facilities of a $410.0 million USD-denominated first lien term facility (the "Term Facility") and a $50.0 million revolving facility available in USD and Euros (the "Revolving Facility" and together with the Term Facility, the "Facilities"). The Term Facility matures in December 2031 and the Revolving Facility matures in December 2029. Borrowings under the Facilities, at our option, bear interest at either (1) the secured overnight financing rate ("SOFR") plus 4.50% or (2) the base rate plus 3.50%, in each case assuming a First Lien Leverage Ratio, as defined in the 2024 Credit Agreement, of greater than 3.60:1.00, and subject to a leverage-based step-down to 4.25% for SOFR borrowing and 3.25% for base rate borrowings, respectively. The interest rate for the Term Facility as of December 31, 2025 was 8.42% and the effective rate is 9.30%.
As of December 31, 2025, no amounts were outstanding under the Revolving Facility. The Revolving Facility includes borrowing capacity available for standby letters of credit of up to $50.0 million. Any issuance of letters of credit reduces the amount available under the revolving facility. As of December 31, 2025, we had $5.9 million committed to outstanding letters of credit, leaving net availability under the Revolving Facility at $44.1 million.
The Facilities provide the Company with the option to increase commitments under the Facilities in an aggregate amount not to exceed the greater of $85.0 million and 100% of Consolidated Adjusted EBITDA (as defined in the 2024 Credit Agreement), plus certain voluntary prepayments (and in the case of the Revolving Facility, to the extent such voluntary prepayments are accompanied by permanent commitment reductions under the Revolving Facility), plus unlimited amounts subject to the relevant net leverage ratio tests and certain other conditions.
The obligations of (i) Ranpak Corp. (the "U.S. Borrower") under the Facilities and certain of its obligations under hedging arrangements and cash management arrangements are guaranteed by Ranger Pledgor LLC ("Holdings") and each existing and subsequently acquired or organized direct or indirect wholly-owned U.S.-organized restricted subsidiary of the U.S. Borrower (together with Holdings, the " U.S. Guarantors") and (ii) Ranpak B.V. (the "Dutch Borrower") under the Facilities are unconditionally guaranteed by the U.S. Borrower, the U.S. Guarantors and each existing and subsequently acquired or organized direct or indirect wholly-owned Dutch-organized restricted subsidiary of the U.S. Borrower (the "Dutch Guarantors", and together with the U.S. Guarantors, the "Guarantors" or the "Borrowers"), in each case, other than certain excluded subsidiaries. The Facilities are secured by (i) a first priority pledge of the equity interests of the Borrowers and of each direct, wholly-owned restricted subsidiary of any Borrower or any Guarantor and (ii) a first priority security interest in substantially all of the assets of the Borrowers and the Guarantors (in each case, subject to customary exceptions), provided that obligations of the U.S. Borrower and U.S. Guarantors under the Facilities were not secured by assets of the Dutch Borrower or any Dutch Guarantor.
The Facilities are secured by substantially all of the assets of the Company. No mandatory prepayments were required as of December 31, 2025, and the Company was in compliance with all debt covenants.
Cash Flows
The following table sets forth our summary cash flow information for the periods indicated:
Year Ended December 31,
2025 2024
Net cash provided by operating activities $ 23.1 $ 41.4
Net cash used in investing activities (32.8) (32.5)
Net cash (used in) provided by financing activities (7.0) 1.8
Effect of exchange rate changes on cash and cash equivalents 3.6 3.4
Net (decrease) increase in cash and cash equivalents (13.1) 14.1
Cash and Cash Equivalents, beginning of period 76.1 62.0
Cash and Cash Equivalents, end of period $ 63.0 $ 76.1
Cash Flows Provided by Operating Activities
Net cash provided by operating activities was $23.1 million in 2025. Cash provided by operating activities was $41.4 million in 2024. The decrease in cash provided by operating activities was primarily due to the increase in net loss, largely due to the litigation settlement proceeds of $16.1 million in the prior year which did not recur in the current year period. Accounts receivable and inventory increased in the current year compared to the prior year and we expect that this trend will continue, due to large enterprise accounts.
Cash Flows Used in Investing Activities
Net cash used in investing activities was $32.8 million in 2025 and reflects cash used for production of converter equipment and purchases of machinery and equipment, and cash paid for investments in Pickle. Net cash used in investing activities was $32.5 million in 2024 and reflects cash used for production of converter equipment and purchases of machinery and equipment, and an additional investment in Pickle of $4.8 million, partially offset by proceeds from sale of patents of $5.4 million.
Cash Flows (Used in) Provided by Financing Activities
Net cash used in financing activities was $7.0 million in 2025 and reflects principal payments on our term loans, payments on finance lease liabilities, tax payments for withholdings on stock compensation, and payments on financing arrangements, partially offset by proceeds from our financing arrangements and our hedging instruments. Net cash provided by financing activities was $1.8 million in 2024 and reflects the proceeds from the 2024 Credit Agreement, partially offset by repayments of our prior debt facilities and related exit costs, payments for financing costs related to our 2024 Credit Agreement, payments on finance lease liabilities, net repayments on our financing arrangements, and tax payments for withholdings on stock-based compensation.
Contractual Obligations and Other Commitments
We have cash obligations under our leases for facilities and automobiles and under our Term Facility, which are described in more detail in Note 12 - Leasesand in Note 7 - Long-Term Debtin the Notes to our Consolidated Financial Statements.We have various contractual obligations and commercial commitments that are recorded as liabilities in our Consolidated Financial Statements.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of December 31, 2025.
Critical Accounting Policies and Estimates
Our accounting principles and the methods of applying these principles are in accordance with GAAP, which often require the judgment of management in the selection and application of certain accounting principles and methods. We consider the following accounting policies to be critical to understanding our financial statements because the application of these policies requires significant judgment on the part of management, which could have a material impact on our financial statements. The following accounting policies include estimates that require management's subjective or complex judgments about the effects of matters that are inherently uncertain. For information on our significant accounting policies,
including the policies discussed below, see Note 2 - Basis of Presentation and Summary of Significant Accounting Policiesto the audited consolidated financial statements included elsewhere in this Report.
Revenue Recognition - Revenue from contracts with customers is recognized using a five-step model consisting of the following: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. Performance obligations are satisfied when we transfer control of a good or service to a customer, which can occur over time or at a point in time. The amount of revenue recognized is based on the consideration to which we expect to be entitled in exchange for those goods or services, including the expected value of variable consideration. The customer's ability and intent to pay the transaction price is assessed in determining whether a contract exists with the customer. If collectability of substantially all of the consideration in a contract is not probable, consideration received is not recognized as revenue unless the consideration is nonrefundable and we no longer have an obligation to transfer additional goods or services to the customer or collectability becomes probable.
We sell our PPS products to end-users primarily through an established distributor network and direct sales to select end-users. For both customer types, the customer is granted the right to use our machine(s) for which we charge a fixed fee or may waive the fee at management's discretion. Our revenue associated with our PPS business contains (i) a non-lease component (the paper consumables) accounted for as revenue under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), and (ii) a lease component (our PPS systems) accounted for as machine lease revenue under ASC Topic 842, Leases ("ASC 842"). Machine lease revenue is recognized on a straight-line basis over the terms of the PPS systems agreements with customers, which have durations of less than one year.
We determine the standalone selling price for a performance obligation sold on a standalone basis for our paper products. Judgment is applied to allocate a percentage of PPS paper revenue to machine lease revenue using the residual approach to estimate the standalone selling price of our PPS systems to customers. The allocation is performed based on the number of PPS systems in the field. We do not sell or transfer ownership of our PPS systems to our customers. Our lease agreements with customer for PPS systems are for one year or less and renew annually.
We have forms of variable consideration present in our contracts with customers, including rebates on volume and other discounts. For all contracts that contain a form of variable consideration, we estimate at contract inception, and periodically throughout the term of the contract, what volume of goods and/or services the customer will purchase in a given period and determine how much consideration is payable to the customer or how much consideration we would be able to recover from the customer based on the structure of the type of variable consideration, using either the expected value method or the most likely amount method. In most cases, the variable consideration in contracts with customers results in amounts payable to the customer by the Company. We adjust the contract transaction price based on any changes in estimates each reporting period and perform an inception to date cumulative adjustment to the amount of revenue previously recognized. We include in the transaction price some or all of an amount of variable consideration estimated to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
We recognize revenue from each Automation product separately, on a contract-by-contract basis (i.e., by individual machine). Our automation machines are highly customized to customer specific needs and termination is only allowed in the case of breach of contract. As such, we are entitled to all consideration from the production of the machine. We cannot sell the machine to another customer due to the level of customization, and as such, there is not an alternative use for the product produced. Because of these factors, we recognize machine revenue over time on a contract-by-contract basis using an input method, based on the percentage of costs and effort incurred to complete the construction of the machine.
We grant warrants in our common stock to certain customers which we account for as consideration payable to a customer. The value of the warrants is recognized as a reduction in the transaction price over the term of the contract. The reduction in revenue is recognized ratably as performance obligations are achieved. A portion of the warrants awarded to customers immediately vested on the grant date which we concluded to be an upfront payment. We apply judgment to evaluate the recoverability of the warrant-related assets based on our forecast of future payments expected to be received from these customers.
Goodwill, Indefinite-Lived Intangible Assets, and Long-Lived Assets. Goodwill is not subject to amortization but is tested for impairment annually at a reporting unit level as of October 1stand between annual tests if events and circumstances indicate that the estimated fair value of a reporting unit may no longer exceed its carrying value. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.
Application of the goodwill impairment test requires judgment, including the identification of reporting units (North America and Europe/Asia), assignment of goodwill to reporting units, and determination of the fair value of reporting
units. We assess, use estimates, and make judgments regarding a variety of factors that may impact the fair value of the goodwill reporting unit being tested. These estimates and judgments include, but are not limited to, projected revenues, gross margin, operating expense, and discount rate, which are dependent on business plans, anticipated future cash flows, economic projections, and other market data.
The test for goodwill used unobservable inputs that required significant judgment and was performed using a combination of the Discounted Cash Flow Method and the Guideline Public Company Method to estimate fair value. Upon completion of the annual impairment assessment, we concluded that neither reporting unit was impaired. However, the test for one of our goodwill reporting units that encompasses our business in North America indicated that fair value of the reporting unit was close to approximating carrying value. The unobservable inputs that required significant judgment include estimates and assumptions affected by conditions specific to our businesses, economic conditions related to the industries in which we operate, and conditions in the global economy. Changes in these estimates and assumptions may result in an impairment charge for the North America reporting unit.
The assumptions that have the most significant effect on the fair values of our North America reporting unit based on the Discounted Cash Flow Method are (i) the expected revenue growth rate, (ii) gross margin, (iii) projected operating expense, and (iv) discount rate. An impairment charge would have resulted from a hypothetical 1.8% reduction in long-term revenue growth, a 3.1% decline in long-term gross margin, a 3.1% increase in long-term operating expenses, or a 1.3% increase in the discount rate.
We believe that our estimates and assumptions used in our annual impairment assessment are reasonable but are subject to change from period to period. Because there are inherent uncertainties in these estimates and judgments, significant differences between actual results of operations and other factors and the estimates used could result in significant differences and if we fail an impairment test, any non-cash impairment charge may have an adverse effect on our results of operations and financial condition.
Recently Issued and Adopted Accounting Pronouncements
For recently issued and adopted accounting pronouncements, see Note 2 - Basis of Presentation and Summary of Significant Accounting Policiesof the Notes to consolidated financial statements included elsewhere in this Report.
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