Quad Graphics (NYSE:QUAD) reported third-quarter 2026 results that were in line with its expectations and raised the lower end of its full-year net sales outlook, citing new business momentum in direct marketing, in-store services and retail media.
Net sales totaled $587 million in the third quarter, compared with $588 million a year earlier. Lower large-scale print volumes and agency solution sales were offset by higher logistics sales, Chief Financial Officer and Treasurer Tony Staniak said. Adjusted EBITDA declined to $51 million from $53 million, while adjusted EBITDA margin narrowed to 8.7% from 8.9%, primarily reflecting sales mix.
Adjusted diluted earnings per share increased 13% to $0.35, from $0.31 in the prior-year quarter. For the first nine months of 2026, adjusted diluted EPS rose 29% to $0.84, which Staniak attributed to higher adjusted net earnings, lower interest expense from reduced debt, lower depreciation and amortization, and share repurchases.
Growth strategy focuses on connected marketing services
Chairman and CEO Joel Quadracci said the company is seeking to expand client relationships by combining creative, production and media services through its marketing experience, or MX, platform. The company’s strategy is to use work in one service area to generate opportunities in other offerings, including targeted print, agency services, packaging, direct mail and retail media.
“Successful execution in one area earns us the opportunity to expand into additional services,” Quadracci said. “As we deliver a broader range of marketing solutions for our clients, we deepen relationships, generate repeat business, and create additional growth opportunities.”
During the quarter, Quad introduced Direct, a newly branded full-service direct marketing agency that combines audience intelligence, strategy, creative, execution and measurement. Quadracci said the company’s direct mail business has grown over the past two years and cited work with Valvoline Instant Oil Change, Heartland Dental and Monogram.
The company also described a new engagement with an unnamed national financial-services company that hired Direct to restart a student-loan acquisition program after a multiyear pause. Quad provided pre-market creative validation, printing and postal support for the campaign, with the resulting insights expected to inform a larger program for the 2027 student-loan application season.
In-store activation work has also led to broader relationships, management said. Quad cited FlavCity, where an initial end-cap display project expanded across five product lines and three retailers—Target, Walmart and Meijer. FlavCity subsequently selected Quad to manage retail display and signage fulfillment and is using the company’s Betty and Rise agencies for an upcoming product launch.
Retail-media network expands deployment
Quad said it is deploying its In-Store Connect retail-media network across more than 100 additional stores. A large national discount chain has agreed to an initial deployment in 30 Florida stores this winter, with screens placed in high-traffic aisles for cereal, salty snacks and soft drinks. Separately, Chedraui USA plans to deploy the network in 25 Smart & Final stores in California during the fall.
Staniak said the additional deployments would bring the network to nearly 160 stores by year-end. Quadracci said the company continues to test the appropriate scale for the network, noting that 800 stores had been used as a reference point for audience size but may not be required before the platform gains momentum.
Management said an early West Coast customer took about 18 months to move into a second phase that doubles its store count, while newer customers have discussed expansion on a faster timetable. Quad is funding the upfront installation of screens and expects to be paid back through media sales, which are shared with retailers depending on their level of involvement.
Revenue mix, cash flow and capital returns
For the first nine months, net sales were $1.7 billion, down 1% from the prior-year period excluding the impact of Quad’s February 2025 divestiture of European operations. The decline reflected lower large-scale print volumes and agency solution sales, partly offset by higher logistics and paper sales.
Revenue from targeted print as a share of total sales increased 2 percentage points, driven by direct mail, packaging and in-store offerings. Logistics increased by 1 percentage point due to fuel surcharges, volume growth and added list services through co-mail operations. Those gains were offset by a 2 percentage-point decline in large-scale print and a 1 percentage-point decrease in agency solutions.
Year-to-date adjusted EBITDA was $138 million, compared with $141 million a year earlier, while the adjusted EBITDA margin remained 7.9%. Free cash flow was negative $100 million through Sept. 30, versus negative $87 million in the prior-year period, due primarily to working-capital changes, payment timing, a $12 million payment to Mexican tax authorities and higher capital expenditures.
Quad reached a resolution with Mexican tax authorities during the quarter on a matter tied to a 2011 audit assessment of a Mexican subsidiary acquired through the World Color Press acquisition. The company paid $12 million, below its previously accrued estimate of $17 million.
The company also received more than $17 million from the sale of its Lima, Peru, building and equipment after ceasing Peruvian operations in September. Quad recorded an $11 million reserve against a note receivable related to the sale of its European operations, after not receiving the first approximately $6 million annual principal-and-interest installment due in February 2026.
Quad returned $23 million to shareholders during the first nine months, including $15 million in dividends and $8 million in share repurchases. The company repurchased 1 million shares year to date and said $61.1 million remained available under its authorization as of Sept. 30.
Updated 2026 outlook
Quad now expects 2026 net sales to decline 1% to 3% from 2025, excluding $23 million of 2025 revenue associated with the European divestiture. Its prior outlook called for a broader range, though management did not restate the previous sales guidance during the call.
- Adjusted EBITDA is expected to be $185 million to $195 million, narrowed from prior guidance of $175 million to $215 million.
- Free cash flow is expected to be $45 million to $55 million, narrowed from $40 million to $60 million.
- Capital expenditures are expected to be approximately $55 million, compared with prior guidance of $55 million to $65 million.
- Year-end net-debt leverage is expected to be approximately 1.5 times.
Management said it expects fourth-quarter free cash flow of $145 million to $155 million, reflecting the company’s typical seasonal pattern of stronger collections following its production peak. Quad continues to target revenue growth in 2028 and expects integrated solutions and targeted print to account for 76% of net sales by that year.
About Quad Graphics (NYSE:QUAD)
Quad (NYSE: QUAD), formerly Quad/Graphics, is a marketing experience company that helps organizations plan, create, produce and distribute marketing communications. Its services span creative and content development, data and analytics, media planning and buying, marketing management, and production.
The company also provides commercial printing, packaging, direct mail, in-store marketing materials and other physical communications. By combining these capabilities with digital and technology services, Quad supports integrated marketing programs designed to connect brands with consumers across print, digital and other channels.
Quad was founded in 1971 by Harry V.
