Ranpak NYSE: PACK reported what management described as a strong start to fiscal 2026, highlighting rapid growth in its automation business and continued progress in operational efficiency initiatives, while also addressing uncertainty tied to geopolitical conflict and energy-market volatility.
Automation growth and PPS trends
Chairman and CEO Omar Asali said the company is “pleased with how we started the year” and pointed to strong momentum in areas Ranpak has emphasized in recent years, including automation and large enterprise customers. Automation revenue increased sharply in the quarter, with Asali stating automation delivered an “exceptionally strong quarter,” increasing 111% year-over-year on a constant-currency basis, excluding foreign exchange.
Asali said automation momentum was “anchored by our European business” and also supported by large customers in North America, including Walmart. He characterized automation as a “major growth engine” and said customers are attracted by cost savings from “lower freight, labor and higher throughput.”
Within the company’s protective packaging solutions (PPS) business, Asali said volumes increased 0.8% year-over-year, extending a pattern of growth in “10 out of the last 11 quarters.” Europe outperformed and exceeded expectations previously shared, while North America benefited from strength with large enterprise e-commerce customers. He noted the distribution channel faced a difficult comparison to the year-ago period, when customers had rebuilt inventories amid paper market disruptions. Ranpak expects that distribution trend to normalize and return to growth, Asali said, adding that new PPS product introductions—particularly cushioning—are helping. He cited “tremendous momentum” for cushioning from the Guardian 24 launch in North America, calling it timely amid disruptions and price increases in resin markets.
Revenue and profitability details
On the top line, Asali said consolidated net revenue increased 4.5% year-over-year on a constant-currency basis for the quarter, or 5.4% excluding the impact of foreign exchange, driven by nearly 100% growth in automation on a constant-currency basis. He added that currency tailwinds added 6.5 percentage points to reported top-line growth.
CFO Bill Drew said North America revenue was roughly flat, or up 1.6% excluding the impact of warrants, with more than 130% growth in automation (excluding warrants) offset by a lower contribution from the PPS distribution channel compared with the prior year. Drew attributed North American automation strength in the quarter partly to growth with Walmart, while saying the company expects “more broad-based growth throughout the year.”
In Europe and APAC, Drew said net revenue increased 8.6% on a constant-currency basis, driven by 95.2% growth in automation and 3.4% volume growth in PPS. He said the company saw volume growth in both EMEA and APAC and plans to build on results through initiatives in sales, product management, and procurement.
On margins, Drew said gross profit increased 5.2% on a constant-currency basis and would have increased 7.9% excluding a $1.7 million non-cash provision for warrants. Excluding depreciation within cost of goods sold and warrants, gross profit would have increased 9.8% on a constant-currency basis. Drew said gross margin improved by 210 basis points to 43.1%, excluding warrants and depreciation, despite an “outsized impact” from automation and large enterprise accounts in North America.
Drew said cost-out and margin efficiency efforts “are taking hold,” noting that North America footprint activities have settled, reducing temporary charges seen last year, and that scale is improving purchasing leverage for key inputs. He added that SG&A, excluding restricted stock unit (RSU) expense, declined 1.5% on a constant-currency basis, as the company focuses on cost control and overhead absorption.
Adjusted EBITDA for the quarter increased $1.6 million to $18.9 million on a reported basis, Asali said, and was flat year-over-year in constant-currency terms. Excluding the impact of foreign exchange, Asali said adjusted EBITDA increased 5% on a constant-currency basis. Drew also discussed currency sensitivity, explaining that constant-currency calculations used a 1.052 exchange rate (the prior-year average for the quarter), and that if a 1.15 rate were used, adjusted EBITDA would have increased 1.6%.
Market environment and pricing actions
Management spent time discussing volatility in energy markets and how it may affect demand and input costs, particularly in Europe. Asali said the company had been seeing “positive movement in economic activity in Europe” prior to the war, but that global conflicts since late February have introduced “a new flavor of energy price shocks and uncertainty.” He said Ranpak had not yet seen a meaningful impact on demand, though customers are “understandably nervous” about the impact higher gas prices could have on consumers.
Asali also said the goods economy has been soft in recent years as spending shifted toward travel and experiences, but higher travel costs tied to fuel prices could potentially lead to some rebalancing back toward goods. He emphasized it was “too early to say how this will play out,” and said Ranpak is positioning conservatively, pursuing cost-reduction measures and operational efficiency to protect margins.
In North America, Asali said paper input costs have been stable, which he said improves Ranpak’s competitive positioning versus resin-based alternatives, where he said the market is already seeing “meaningful price increases.” He said the company is pushing its sales team to accelerate “the plastic to paper transition,” describing it as a dynamic not seen in North America “in years.”
In Europe, Asali said Dutch TTF gas prices have been volatile, moving from the low-to-mid EUR 30s per megawatt hour to more than EUR 60 after the conflict began, before retreating to the low-to-mid EUR 40s. He said European paper producers are passing through price increases beginning in the second quarter, and Ranpak will use a “temporary surcharge” to protect margins, which the company plans to remove when conditions normalize.
Asked about resin availability and whether customers were shifting to paper, Asali told analysts the company did not see that shift in the first quarter, but said it is “seeing more of it now,” driven largely by price, with availability potentially a factor. On Europe’s first-quarter outperformance, Asali cited improved execution following organizational changes in the European sales organization late last year, including increased focus on “trials and closes.”
Balance sheet, cash flow, and strategic updates
Drew said Ranpak ended the quarter with $48.5 million of cash and no borrowings on its revolving credit facility. Reported net leverage was 4.7x on a last-twelve-month basis. He reiterated a longer-term leverage goal of 2.5x to 3.0x, which the company believes it can reach over the next 24 months.
Capital expenditures were $8.3 million in the quarter, up $800,000 from the prior year but “meaningfully below” levels in 2023 and 2024, Drew said, adding the company remains disciplined on spending to maximize cash.
On free cash flow, Drew told analysts the company’s prior framework still held, referencing assumptions including about $35 million of CapEx (with potential to do better), approximately $34 million of cash interest, $3 million to $4 million of cash taxes, and a working capital use of about $4 million to $5 million, which he said “still kinda gets you to that $15 million area prior to any debt pay down.” He also noted ongoing cost-out projects, including a Lean Six Sigma program implemented by the company’s new COO in Europe and North America.
Asali also provided an update on automation outlook, saying that based on first-quarter bookings, the company expects to be “closer to $60 million in revenue in automation this year,” and that he is confident in a path to surpass $100 million in automation revenue “in the near future.” He said Ranpak has sold more than $120 million of automation equipment cumulatively over the past few years and is seeing “record attendance” and “record leads” at trade shows including MODEX in the U.S. and LogiMAT in Germany, which he said supports the company’s growing reputation in packaging automation.
In addition, Asali said Ranpak made an additional investment in Pickle Robot through a SAFE note transaction to maintain its roughly 9% ownership stake, which he described as “highly strategic and valuable.” In response to a question about Pickle Robot’s valuation, Asali said the company had not reported a valuation and is currently in the market raising a round that will determine a new valuation. He added that his expectation is this “will probably be the last round” before considering “potentially, the public markets or an IPO,” while emphasizing the importance of customer traction and technology execution.
Ranpak did not change its guidance during the call. Asali said management feels “great” about business conditions and execution, but added the company does not want to “tinker” with guidance given uncertainty around geopolitical developments and potential downstream impacts that are difficult to analyze.
About Ranpak NYSE: PACK
Ranpak Holdings Corp. NYSE: PACK is a leading provider of sustainable, paper-based packaging solutions designed to protect products during transit. The company's core business centers on the design, manufacture and distribution of automated systems and consumable paper packaging materials that offer an eco-friendly alternative to plastic-based void-fill and protective packaging. Ranpak's solutions include crumpled paper fillers, paper wrap systems and tailored automation equipment that serve diverse end markets such as e-commerce, industrial parts, electronics and retail.
Founded in 1972 and headquartered in Concord Township, Ohio, Ranpak has built a global presence by combining innovation in paper converting technology with a commitment to sustainability.
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