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Mativ Holdings, Inc. (MATV)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $525.4M, up 0.3% YoY and +8% sequential; Adjusted EBITDA rose to $67.2M (+1% YoY, +$30M vs Q1), and Adjusted EPS was $0.33; GAAP EPS was $(0.18) due to tax expense and non‑GAAP exclusions .
  • Results beat S&P Global consensus: revenue $525.4M vs $505.5M*, and Adjusted EPS $0.33 vs $0.20*; a notable beat on both top line and EPS, driven by SAS volume/price and SG&A reductions, partly offset by manufacturing/distribution costs and unfavorable price/input in FAM .
  • Management guided Q3 Adjusted EBITDA to be +5% to +10% YoY and expects Q4 to also compare favorably; raised cost‑reduction plan to $35–$40M by YE 2026 (with $15–$20M realized in 2025), and reaffirmed capex ~$40M and normalized tax rate ~24% .
  • Cash flow inflected: operating cash flow $57.6M and free cash flow $48.9M – the second‑highest cash flow quarter since the merger; net debt decreased to $995.0M; dividend of $0.10 declared (payable Sep 26, 2025) .

What Went Well and What Went Wrong

What Went Well

  • Sequential step‑change: “sales in Q2 came in more than $40M higher… and adjusted EBITDA increased $30M or up more than 80%” vs Q1, reflecting improved volume and SG&A reductions .
  • SAS momentum: SAS organic sales +5% YoY; categories such as tapes, labels, liners, healthcare and commercial print led growth; new long‑term customer commitments drove incremental revenue and share gains .
  • Cash flow strength: “second‑highest cash flow quarter since the merger… operating activities of $57.6M, free cash flow $48.9M,” aided by working capital optimization .

What Went Wrong

  • FAM headwinds: FAM net sales down 1.0% YoY; Adjusted EBITDA down 4.0% YoY due to higher manufacturing/distribution costs and unfavorable price vs input cost .
  • Tax charge impact: tax expense of $12.5M led to GAAP net loss of $(9.5)M in Q2, even as operating profit improved; tax rate was 416.7%, driven by valuation allowances and one‑time adjustments .
  • Price/input friction: company cited “unfavorable net selling price versus input cost performance” (primarily in FAM) partially offsetting SG&A reductions and volume/mix .

Financial Results

Consolidated performance

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$523.8 $458.6 $484.8 $525.4
Adjusted EBITDA ($USD Millions)$66.6 $44.8 $37.2 $67.2
GAAP EPS ($USD, diluted)$(0.03) $0.03 $(7.82) $(0.18)
Adjusted EPS ($USD, diluted)$0.34 $0.05 $(0.14) $0.33
Gross Profit ($USD Millions)$108.9 $77.6 $72.6 $103.7
Gross Margin %20.8% 16.9% 15.0% 19.8%
Operating Profit (Loss) ($USD Millions)$10.5 $2.6 $(430.6) $20.1
Adjusted Operating Profit ($USD Millions)$44.0 $22.8 $15.2 $44.4

Notes: Gross Margin % computed from reported gross profit/net sales with cited sources.

Actual vs Consensus (S&P Global)

MetricQ2 2025 ConsensusQ2 2025 Actual
Revenue ($USD Millions)$505.5*$525.4
Adjusted EPS ($USD)$0.20*$0.33

Values with asterisks retrieved from S&P Global.

Segment breakdown

MetricQ2 2024Q1 2025Q2 2025
FAM Net Sales ($USD Millions)$206.4 $187.6 $204.4
FAM GAAP Operating Profit ($USD Millions), Margin %$25.2 (12.2%) $(410.0) (N.M.) $22.6 (11.1%)
FAM Adjusted EBITDA ($USD Millions), Margin %$42.3 (20.5%) $23.3 (12.4%) $40.6 (19.9%)
SAS Net Sales ($USD Millions)$317.4 $297.2 $321.0
SAS GAAP Operating Profit ($USD Millions), Margin %$15.6 (4.9%) $13.0 (4.4%) $24.8 (7.7%)
SAS Adjusted EBITDA ($USD Millions), Margin %$46.2 (14.6%) $33.3 (11.2%) $45.3 (14.1%)
Unallocated Adjusted EBITDA ($USD Millions)$(21.9) $(19.4) $(18.7)

KPIs and balance sheet

KPIQ4 2024Q1 2025Q2 2025
Operating Cash Flow ($USD Millions)$24.1 $(15.9) $57.6
Free Cash Flow ($USD Millions)$1.9 $(29.8) $48.9
Total Debt ($USD Millions)$1,089.3 $1,122.8 $1,090.6
Cash & Equivalents ($USD Millions)$94.3 $84.0 $95.6
Net Debt ($USD Millions)$995.0 $1,038.8 $995.0
Liquidity ($USD Millions)$451 $407 $453

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDAQ3 2025“Significant sequential step‑up” expected in Q2/Q3 (Q1 call) Q3 Adjusted EBITDA +5% to +10% YoY; Q4 also to compare favorably YoY Raised specificity to YoY growth
Free Cash FlowFY 2025Significant YoY improvement; WC +$10M source “Approximately twice” 2024 FCF; path to ~$80M discussed in Q&A Raised ambition/clarified magnitude
Cost ReductionsBy YE 2026$30–$35M total; $10–$15M realized in 2025 $35–$40M total; $15–$20M realized in 2025 Raised targets
CapexFY 2025~$40M ~$40M Maintained
Interest Expense + AR FeesFY 2025~$70M interest + ~$8M AR fees (Q4 call context) ~$75M interest + ~$9M AR fees Raised
Normalized Tax RateOngoing~24% ~24% Maintained
Working CapitalFY 2025~$10M source of cash ~$10M source of cash Maintained
DividendNext payment$0.10 (announced May) $0.10 payable Sep 26, 2025; record Aug 29, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
AI/data center demand via filtrationFiltration stable; adjacency initiatives; turnaround in films; healthcare up >10% in 2024 FAM HVAC and air pollution control up >20%; demand tied to AI data center capacity expansions Improving, demand driver
Tariffs/macroMinimal direct impact; supply chain can shift; uncertainty persists “Less than 7%” sales subject to tariffs; localized supply chain; indirect demand uncertainty Manageable direct; indirect uncertainty
Product performance – Advanced Films/PPFQuality issue in late 2023; turnaround underway; optical/medical films +30% YoY in Q4 PPF volumes below 2024 but gap narrowing; mid‑tier Asia strategy; premium regaining share in NA; optical films up >20% YoY Sequential improvement
Commercial pipeline disciplineSAS pipeline +50% YoY entering 2025; cross‑selling across portfolio Uniform commercial leadership across FAM & SAS; long‑term commitments in tapes/healthcare; disciplined reviews Expanded across segments
Deleveraging focusTarget leverage 2.5–3.5x; cash flow prioritized for debt reduction Net leverage 4.5x (1 turn headroom vs covenant); continued progress expected; FCF doubling target Improving
Capex & operationsCapex cut to ~$40–50M; footprint optimization Capex ~$40M; distribution/freight/process optimization underway Ongoing execution

Management Commentary

  • CEO on execution and momentum: “We continue to operate at an increased pace of execution… second‑highest cash flow quarter… our results to date have galvanized our team's focus on generating strong year‑over‑year adjusted EBITDA and free cash flow improvement for the remainder of the year.”
  • CEO on segment trends: “SAS sales… up 5% on an organic basis… healthcare and commercial print leading the charge… FAM… strong pockets of growth in HVAC, air pollution control filtration, and optical films.”
  • CEO on strategic priorities: “Driving enhanced commercial execution, sharpening efforts to delever the balance sheet, and conducting a strategic review of our portfolio.”
  • CFO on drivers: “High volume mix and lower SG&A costs represent a combined $8M favorable impact… offset by $5M higher manufacturing and distribution costs… and $2M unfavorable net selling price versus input cost primarily in FAM.”

Q&A Highlights

  • Paint Protection Film turnaround: Quality/capacity fixes “are behind us,” mid‑tier Asia strategy working; regaining premium share in North America; optical films gaining share .
  • Cash flow trajectory: Management discussed path to ~$80M FY25 free cash flow via inventory reduction ($20–$30M), capex ~$40M, pricing actions, and cost optimization .
  • Strategic review: Early innings; evaluating opportunities to unlock value without disrupting transformation; updates to come .
  • Self‑help confidence: Additional $5M cost savings identified, raising total to $35–$40M by 2026; SG&A and operational initiatives to support EBITDA growth in H2 .

Estimates Context

  • Q2 2025 beat: Revenue $525.4M vs $505.5M*; Adjusted EPS $0.33 vs $0.20* – both above consensus, with the EPS beat reflecting segment volume/pricing and SG&A reductions despite cost pressures .
  • Implications: Consensus models likely move up on EBITDA/FCF trajectory and SAS growth durability; H2 mix improvements (FAM) and price/input normalization support margin revisions .

Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • Q2 inflection: Top‑line and Adjusted EPS beats, strong sequential EBITDA/FCF; the beat narrative centers on SAS volume/price and SG&A execution amid cost headwinds .
  • H2 setup: Guided Q3 EBITDA +5–10% YoY and positive Q4; price/input turning favorable and operational fixes at targeted sites should support margin expansion .
  • Cash priority: FCF doubling vs 2024 and deleveraging focus remain the core equity catalysts; inventory reduction and capex discipline underpin cash generation .
  • Segment watch: SAS remains the growth engine; FAM sequential recovery driven by HVAC/air pollution (data center demand) and optical films; monitor PPF share recovery pace .
  • Cost program upside: Raised cost‑reduction target ($35–$40M by 2026; $15–$20M in 2025) provides EBITDA support independent of macro .
  • Dividend maintained: $0.10 payable Sep 26, 2025; signals confidence while balance sheet focus persists .
  • Trading lens: Near‑term react to beat/raised specificity on H2; medium‑term thesis hinges on sustained SAS growth, FAM recovery, and FCF‑led deleveraging .

Other Relevant Press Releases

  • No additional Q2 2025 press releases were found beyond the 8‑K earnings release .

Prior Two Quarters (for trend)

  • Q1 2025: Revenue $484.8M; Adjusted EBITDA $37.2M; Adjusted EPS $(0.14); GAAP loss driven by $411.9M goodwill impairment; SAS organic +5.7%; FCF $(29.8)M .
  • Q4 2024: Revenue $458.6M; Adjusted EBITDA $44.8M; Adjusted EPS $0.05; SAS organic +12.8%; FAM pressured by films; FCF $1.9M .