A marketing experience company blending commercial printing with creative, media, and data services, Quad produces catalogs, magazines, direct mail, and digital advertising and ranks among the largest mailers in the U.S. Founder Harry Quadracci launched it in 1971 in an abandoned mill warehouse near Milwaukee with a leased press and a second mortgage on his home, guided by his "Ready, Fire, Aim" motto. The name is shorthand for his surname rather than the number four, and its Betty creative agency borrows the nickname of his wife Elizabeth.
Quad/graphics Q2 revenue rose 1% to $577.5M, the first quarterly increase in over two years, but net debt leverage climbed above the target ceiling.
grew for the first time since Q4 2022. Net sales rose 1% to $577.5 million and increased 8.8% to $14.9 million, helped by lower and interest costs, while held at 21.6%. The rose to 2.03x, above management's 1.50x to 2.00x target, as higher outweighed the modest profit gain.
Key takeaways
Consolidated rose 1.0% to $577.5 million, breaking a multi-year streak of quarterly declines, as higher paper sales and logistics growth offset lower print volumes and marketing services.
increased 8.8% to $14.9 million, driven by a $3.5 million decrease in and and a $0.6 million reduction in , which together more than offset a $0.5 million rise in restructuring charges.
was 21.6%, unchanged from Q2 2025, as cost-saving initiatives continued to absorb the impact of lower print volumes.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 net sales rose 1% to $577.5M, operating income grew 8.8% to $14.9M, driven by lower depreciation and interest expense.
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Consolidated increased 1.0% to $577.5M, with product sales up 0.8% on higher paper sales and services up 1.5% on logistics growth, partially offset by lower print volumes and marketing services.
The U.S. Print and Related Services widened to 5.1% from 4.3% a year ago, helped by lower restructuring charges and , even as product sales were flat.
The International fell 51.3% to $1.9 million, pressured by a $3.1 million increase in restructuring charges, mainly employee termination costs.
The rose to 2.03x from 1.57x at year-end 2025, moving above management's 1.50x to 2.00x target range, driven by higher .
What changed
The Q2 2025 filing flagged whether the $571.9 million quarterly level represented a new floor after the European divestiture. Q2 2026 revenue of $577.5 million, up 1%, suggests stabilization at roughly that level, though the increase came from paper sales and logistics rather than print volume.
The Q2 2025 filing asked whether the $4.2 million on a terminated software project was a one-time item. No similar impairment appeared in Q2 2026; restructuring, impairment, and transaction-related charges were $9.7 million, up only $0.5 million .
The Q1 2026 filing flagged whether the , then at 2.19x, could be brought back within the 1.50x to 2.00x target. It improved to 2.03x sequentially but remained above the ceiling, as stayed elevated.
The Q1 2026 filing asked whether restructuring charges would rise further following the Rock, Georgia facility closure announcement. Restructuring charges increased $0.5 million to $9.7 million, with the International bearing a $3.1 million increase in employee termination costs.
What to watch
Whether the , now at 2.03x and above the 1.50x to 2.00x target range, can be brought back within the ceiling by year-end as trailing twelve-month faces pressure from declining print volumes.
generation in Q3 2026, following a first-half outflow of $107.0 million in Q1 and a $34.4 million inflow in Q2, to see whether the company can approach positive full-year free cash flow with cash and equivalents at $7.0 million.
The trajectory of catalog volumes for the rest of 2026, given management's warning that USPS price increases and the end of a catalog promotion will negatively impact that business.
Whether the 1% increase in Q2 2026 represents the start of stabilization or a one-quarter pause in the decline, particularly as print volumes continued to fall and were offset by paper sales and logistics.
rose 8.8% to $14.9M, as a $3.5M decrease in and and a $0.6M drop in more than offset a $0.5M increase in .
The U.S. Print and Related Services improved to 5.1% from 4.3%, helped by lower and , despite flat product sales.
International fell 51.3% to $1.9M, pressured by a $3.1M increase in , mainly employee termination costs.
Total liquidity was $275.9M as of June 30, 2026, and the rose to 2.03x from 1.57x at year-end 2025, above management's target range, due to higher .
The company expects additional restructuring costs and warns that USPS price increases and the end of a catalog promotion will negatively impact catalog volumes for the rest of 2026.
Quantitative and Qualitative Disclosures About Market Risk
Quad manages interest rate, foreign currency, credit, and commodity risks through hedging, contract clauses, and credit reviews.
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Interest rate risk arises from variable-rate debt; $205.0M is hedged to fixed via swaps and a collar, leaving $188.7M variable at 6.5%.
A hypothetical 10% increase in rates would change the fair value of floating-rate debt by about $1.3M and fixed-rate debt by about $0.1M.
Foreign currency exposure is limited as subsidiaries mainly transact in local currencies; a 10% adverse FX shift could reduce net current assets by ~$6.7M.
Credit risk is managed through client underwriting and monitoring; the was $21.5M at June 30, 2026.
Commodity risk from paper, ink, and energy is partially mitigated by client-supplied paper, price-adjustment clauses, in-house ink production, and natural gas hedges.
There have been no material changes to the risk factors previously disclosed in Part I, Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 18, 2026.
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There have been no material changes to the risk factors previously disclosed in Part I, Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 18, 2026.