XBP Global Holdings, Inc. (XBP)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 pro forma revenue was $220.4M, down 18.1% year over year; excluding a $36.5M one-time client notification project in Q3’24, underlying decline was 8.3%, while pro forma gross margin expanded 190 bps to 21.9% and pro forma adjusted EBITDA rose 7.1% to $24.7M with margin up 260 bps to 11.2% .
• As reported revenue (partial-quarter consolidation) was $209.1M, down 10.4% YoY; as-reported gross margin improved 310 bps to 22.0% .
• Management highlighted new wins (NYC Department of Finance lockbox and a multi-year insurance re-mail processing contract) and signaled moderating declines as pipeline rebuilds; no formal guidance was provided this quarter .
• Strategic context: XBP Europe’s acquisition of Exela BPA closed July 29; pro forma TTM revenue is ~$916.4M with adjusted EBITDA ~$103.6M and net leverage of ~3.37x (below Russell 2000 average), providing scale and balance sheet strength .

What Went Well and What Went Wrong

• What Went Well

  • Margin expansion driven by automation and operating leverage: pro forma gross margin +190 bps YoY to 21.9%; adjusted EBITDA margin +260 bps YoY to 11.2% .
  • Strategic wins and pipeline momentum: “we've announced a number of exciting new contracts… New York City Department of Finance… large insurance carrier” and the “revenue declines are beginning to moderate” .
  • AI execution delivering efficiency gains: “automation rate of up to 70%-75% using our intelligent document processing IDP workflow” and revenue per employee >$80k vs peers ~$57k .

• What Went Wrong

  • Top-line pressure: pro forma revenue -18.1% YoY, largely from the completion of projects and client exits; underlying decline -8.3% ex one-time project .
  • Technology segment revenue down 10.2% YoY pro forma due to expected project completions and some customer exits .
  • No guidance this quarter amid integration complexity, limiting estimate anchoring and forward visibility .

Financial Results

Headline performance versus prior year

As reported (partial-quarter consolidation) versus prior year

Segment breakdown – Pro Forma

Segment breakdown – As Reported

Key performance indicators

Balance sheet snapshot (as of Sep 30, 2025)

Notes:

• Reported results exclude XBP Europe until July 29 and treat Exela BPA as the accounting acquirer; management provided pro forma to facilitate comparisons .

Guidance Changes

Earnings Call Themes & Trends

Note: Q-1 commentary is limited due to structural change pre-acquisition; Q2 investor materials provide pre-close context .

Management Commentary

• CEO: “With our global scale, sustainable capital structure, enhanced corporate governance, and mission-critical workflow automation solutions powered by expanded agentic AI capabilities, we are thoroughly excited for the future… positioning our organization for growth” .
• CFO: “Pro forma revenue… $220.4 million (-18.1% YoY)… excluding a one-time… $36.5 million… decline was 8.3%… pro forma gross margin expanded to 21.9% (+190 bps YoY)… pro forma adjusted EBITDA was $24.6 million (+7.1% YoY)… adjusted EBITDA margin… 11.2% (+260 bps YoY)” .
• CFO on segment dynamics: “Applied workflow automation… revenue decline of 18.9% YoY; excluding the client notification project… 8%… gross margins… grew… to 17.3%. Technology revenue declined 10.2% YoY due to completion of several one-time projects and exits of certain customers” .
• CEO on AI: “In marquee AI-enabled accounts, we’re achieving automation rates of up to 70%-75%… hybrid agentic AI workflow with human-in-the-loop” .

Q&A Highlights

• The call concluded without a Q&A session; the operator noted there were no questions in queue .
• Management clarified they are not providing guidance this quarter given the timing of the transaction but expect to do so in future .

Estimates Context

• Wall Street consensus via S&P Global (revenue, EPS, EBITDA, target price, recommendation) was unavailable for XBP at the time of this report; therefore, comparisons to consensus could not be made. Values retrieved from S&P Global.*

Key Takeaways for Investors

• Underlying performance is better than headline YoY decline: excluding last year’s $36.5M one-time project, revenue fell 8.3% YoY while margins expanded materially (GM +190 bps; adj. EBITDA margin +260 bps) — signaling operational improvement despite lower volumes .
• Structural margin drivers appear durable: automation and operating leverage lifted pro forma GM to 21.9% and adj. EBITDA to $24.7M; margin gains are evident across Applied Workflow Automation (+160 bps GM YoY) and Technology (+60 bps GM YoY) .
• Commercial traction building: announced wins (NYC Dept. of Finance lockbox; insurance re-mail processing) and commentary on moderating declines suggest improving sales momentum and potential re-acceleration ahead .
• Balance sheet reset post-BPA restructuring: pro forma TTM net leverage ~3.37x and broadened institutional ownership/board independence reduce financial risk and enhance strategic flexibility .
• Near-term trading implications: Absent guidance/consensus, the stock may trade on margin progression and contract flow; watch subsequent quarters for sequential revenue stabilization alongside sustained margin expansion .
• Medium-term thesis: Scale plus AI-driven efficiency across mission-critical workflows, diversified sector footprint, and improving governance set up for EBITDA accretion with revenue recovery; monitor conversion of pipeline and segment mix shifts (Technology lumpy but high margin) .
• Risks: Client concentration dynamics and procurement diversification post-BPA; integration execution; prior listing compliance notices; and absence of guidance could heighten uncertainty until more quarters of combined reporting are available .

Sources: Q3 2025 8-K press release and exhibits , Q3 2025 earnings call transcript , Q2 2025 press release/investor materials , and acquisition press release/8-K .