Ranpak Holdings (PACK) Q2 FY26 earnings call: guidance and Q&A

Is automation growth primarily from existing customers expanding or new customer acquisition?

Automation growth is driven by both existing large enterprise customers expanding their footprint and new customer acquisition through partnerships with integrators. The majority of FY26 automation revenue is already contracted.

“Yes, it's actually both, Gansham, which is quite exciting from RC. So you have some of the large enterprises, Walmart, Medline, which again, we're helping them roll out in more facilities as well as new facilities and that continues. And then what we're seeing is very decent activity. with new customers, you know, so I'll highlight for you, we have formed, a couple of key partnerships with integrators. One of them is one of the largest integrators in ASRS, and we've signed a partnership with them the last few months and are rolling out some of their key accounts for end of line packaging.”

asked by Gansham Punjabi · answered by Omar Asili

What is the EBITDA impact of automation in 2026, and what drives the PPS performance differences between Europe and North America?

Automation is on track for EBITDA breakeven by year-end 2026 and will be EBITDA positive in 2027. In North America PPS, enterprise is strong, but the distribution channel is softer, expected to pick up in H2. Europe PPS shows broader strength, with low inventory levels despite war-related caution.

“So on automation, and I'll start there just with EBITDA, we still think we're on track for getting to break even later this year... And the plan is to be sort of EBITDA even towards the end of the year and then starting next year, automation will be an EBITDA positive contributor. So that's still intact and based on what we're seeing in terms of volume and what we just discussed with both existing new accounts and the pipeline, we feel very, very confident that we're on track to hit that.”

asked by Gansham Punjabi · answered by Omar Asili

Elaborate on margin improvement, ability to pass through inflationary costs, and confidence in H2 margin profile.

Gross margin improved 150 bps YoY. North America PPS improved over 300 bps due to efficiency. EMEA had a lag in surcharge implementation vs. input cost increases and a mix headwind from customers trading down. Expect continued improvement in H2 through efficiency, pricing in North America, and surcharges in EMEA.

“So the North America PPS business, we were able to improve margins by over 300 bps. In EMEA, as you pointed out, the surcharge went in place in May, but our input cost did increase starting in April. So there was a lag there that we had to absorb. You're also seeing in EMEA a little bit of a trade down of customers going to lower dollar price, lower margin skews, particularly as it relates to void fill, which creates a a little bit of a mixed headwind.”

asked by Greg Palm · answered by William Drew

Is the PPS pruning related to shrinking install base, and expand on the new strategy.

The PPS pruning is part of a strategy to improve margin and financial profile, not expected to noticeably impact top line. It involves optimizing fleet efficiency (e.g., fewer converters than needed) and being prudent with consumable businesses tied to warrants with enterprise partners. It's 'healthy pruning' to enhance financial profile.

“Part of it, to be honest with you, will deal with efficiency of fleet that you're referring to where some accounts they may have had, maybe let's say more converters than needed given the actual volumes we're seeing today. The other part of it may deal with some of the consumable businesses, with some of our enterprise partners where we have warrants. Again, we want to be a very good partner and fulfill their needs as much as possible. But we want to be prudent in terms of what does it mean for us in terms of bottom line and financial profile.”

asked by Greg Palm · answered by Omar Asili