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Sep 30
Greif Q4 2025 Earnings Report
Greif reported a significant decrease in net income for the fourth fiscal quarter of 2025, primarily due to tax expenses and adjustments related to the divestment of its containerboard business, despite an increase in Adjusted EBITDA.
Key Takeaways
Greif experienced a challenging fourth fiscal quarter in 2025, with net income decreasing by 227.4% to a loss of $43.3 million, or $(0.73) per diluted Class A share. This decline was largely attributed to tax expenses from valuation allowances and uncertain tax positions, as well as the impact of discontinued operations accounting rules following the divestment of the Containerboard Business. Despite these headwinds, Adjusted EBITDA saw a 7.4% increase to $98.9 million, and adjusted free cash flow rose by $24.0 million to $122.6 million, indicating underlying operational strength.
Net income decreased by 227.4% to a loss of $43.3 million, or $(0.73) per diluted Class A share, primarily due to tax expenses and discontinued operations accounting.
Adjusted EBITDA increased by 7.4% to $98.9 million, demonstrating operational improvements despite the net income decline.
Adjusted free cash flow increased by $24.0 million to $122.6 million, highlighting strong cash generation.
The company completed the divestment of its containerboard business and timberlands business, significantly reducing total debt and improving its leverage ratio to 1.63x from 3.48x.
Greif
Greif
Greif Revenue by Segment
Revenue by Segment
Customized Polymer Solutions Revenue
CapyFin.comDurable Metal Solutions Revenue
CapyFin.comSustainable Fiber Solutions Revenue
CapyFin.comIntegrated Solutions Revenue
CapyFin.com Forward Guidance
Greif is providing low-end guidance for fiscal 2026, anticipating Adjusted EBITDA of $630 million and Adjusted Free Cash Flow of $315 million, reflecting continued demand trends and cost optimization efforts.
Positive Outlook
- Anticipated cost optimization commitment increased to $120 million from $100 million due to accelerated progress in 2025.
- Planning to execute an open market repurchase plan for approximately $150 million utilizing available authorization of approximately 2.5 million shares.
- Fiscal 2026 guidance includes a free cash flow conversion ratio of 50%.
- Proforma leverage ratio is expected to be below 1.0x after the timberlands business sale.
- Achieved cost optimization run-rate savings of approximately $50 million by the end of fiscal year 2025.
Challenges Ahead
- Markets have experienced a multi-year period of industrial contraction with no compelling demand inflection on the horizon.
- The company believes it is appropriate to provide only low-end guidance due to continuing demand trends.
- Guidance is based on current price/cost factors and other identifiable discrete items.
- Forward-looking non-GAAP financial measures are presented without reconciliations to GAAP due to inherent difficulties in projecting and quantifying adjusting items.
- Actual results may differ materially from guidance due to known and unknown uncertainties and risks.
Revenue & Expenses
Visualization of income flow from segment revenue to net income