EASTMAN KODAK CO (KODK)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 revenue was $263M, down 1% year over year but up sequentially; gross margin fell to 19% (22% prior year), and GAAP diluted EPS was −$0.36 as net loss reached $26M driven by lower volumes, higher aluminum/manufacturing costs, and a $17M non‑cash impairment .
• Management disclosed “substantial doubt” about going concern due to 2026 maturities; plan is to use an estimated ~$500M of pension plan reversion (≈$300M cash, remainder illiquid) to repay term debt and then refinance/extend remaining obligations before May 2026 .
• Advanced Materials & Chemicals (AM&C) continues to grow; FDA registration/certification achieved for cGMP pharmaceutical facility to manufacture regulated products (starting with phosphate buffered saline) .
• Series C preferred stock was exchanged into common (≈15.7% of post‑exchange shares), removing $100M notional and ~$24M accrued PIK dividends, while an up to $100M ATM program provides potential liquidity; restricted cash stood at ~$90–98M .
• No formal guidance or Q&A; S&P Global consensus was unavailable for Q2 (no EPS/Revenue estimates returned), limiting beat/miss assessment. Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

• AM&C growth and pharma milestone: “Our AM&C group’s cGMP pharmaceutical manufacturing facility is now registered with the FDA and certified to manufacture and sell regulated pharmaceutical products … begin operation manufacturing phosphate buffered saline (PBS)” .
• Strategic deleveraging and capital structure actions: Series C preferred exchanged into common, eliminating $100M preferred and >$24M accrued PIK dividends; pension reversion plan (~$500M estimated) targeted to repay term debt .
• U.S. manufacturing positioning and tariffs: Q2 tariffs had no material impact; leadership emphasizes Kodak as the only U.S. manufacturer of lithographic plates, supporting supply reliability and potential tariff protection .

What Went Wrong

• Profitability pressure: Gross margin contracted to 19% (22% prior year) and Operational EBITDA fell to $9M (−25% YoY) on lower volumes and higher aluminum/manufacturing costs .
• GAAP net loss: −$26M vs +$26M prior year; after adjusting for a $17M non‑cash asset impairment, net loss was −$9M, with a $25M YoY decline in pension income contributing materially .
• Liquidity/cash use and going concern: Unrestricted cash fell to $155M (from $201M at 12/31/24); cash from operations was −$30M in 1H25; management included a going concern disclosure due to debt/preferred maturities within 12 months of issuance date .

Financial Results

Consolidated Results vs Prior Periods

Results vs Wall Street Consensus

Estimates unavailable; values retrieved from S&P Global.

Segment Breakdown (Q2 2025 vs Q2 2024; Eastman Business Park excluded)

Note: Eastman Business Park is not a reportable segment and is excluded from the table above .

KPIs and Balance Sheet/Cash Flow Snapshot

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO (Jim Continenza): “While tariffs did not have a material impact on our business in Q2, we are assessing the potential impact of new tariffs going forward… Kodak is committed to U.S. manufacturing… We continue to accelerate the growth of our AM&C business.” .
• CEO: “Our cGMP pharmaceutical manufacturing facility is now registered with the FDA and certified to manufacture and sell certain regulated pharmaceutical products… begin operation manufacturing phosphate buffered saline… bridge to manufacturing more sophisticated products… injectables such as IV saline.” .
• CFO (David Bullwinkle): “The CRIP termination and settlement process is proceeding as planned… best estimate of pension assets that will revert to the company… approximately $500,000,000 with approximately $300,000,000 of this in cash… a large portion of the reverted cash will be used to reduce term debt.” .
• CFO: “We entered into an ATM… may offer and sell up to $100,000,000 of shares… To date, the company has not sold any shares under this arrangement.” .
• CFO: “GAAP… net loss of $26,000,000… $17,000,000 of this decrease was for a non cash asset impairment… net loss was $9,000,000… largely driven by a $25,000,000 decline in pension income excluding service cost component.” .

Q&A Highlights

• No formal Q&A was held; management invited follow‑up via Investor Relations .

Estimates Context

• S&P Global consensus estimates for Q2 2025 (EPS and Revenue) were unavailable; no estimate values returned, preventing a beat/miss assessment versus Street. Values retrieved from S&P Global.*

Key Takeaways for Investors

• Liquidity and going concern: The explicit going concern disclosure tied to 2026 maturities elevates risk; execution of the ~$500M pension reversion and subsequent refinancing/extensions is the primary de‑risking catalyst .
• Capital structure progress: Series C preferred elimination and ATM flexibility improve optionality; monitor dilution risk if ATM is utilized and the pace of restricted cash reduction ($90–98M) .
• Margin headwinds: Gross margin at 19% and EBITDA decline reflect higher aluminum/manufacturing costs and lower volumes; pricing actions partially offset but not fully .
• AM&C growth vector: FDA registration/certification for cGMP pharma manufacturing and initial PBS production are tangible milestones; track revenue/EBITDA ramp and potential move into injectables (IV saline) .
• U.S. manufacturing/tariffs: With Q2 tariffs immaterial, Kodak’s U.S. manufacturing footprint (including lithographic plates) positions it to benefit if protections favor domestic producers .
• Cash trajectory: Unrestricted cash fell to $155M; 1H’25 operating cash flow −$30M; focus on working capital and cost reduction remains critical near‑term .
• Near‑term trading lens: Stock sensitivity likely to headlines on pension reversion timing, debt repayment/refinancing progress, and AM&C contract wins; absence of guidance and Street consensus adds uncertainty to quarterly setup .