Breaking Down Ranpak Holdings Corp. (PACK) Financial Health: Key Insights for Investors

You're looking at Ranpak Holdings Corp. (PACK) and seeing a classic growth-vs-profitability puzzle right now, and you're right to be cautious about the near-term. The headline is defintely mixed: while the company is executing on its strategic pivot to automation, the bottom line is still under pressure. The third quarter of 2025 delivered net revenue of $99.6 million, an 8.0% jump year-over-year, but that growth came with a net loss that widened to $10.4 million. Here's the quick math: the massive 63.0% surge in Automation net revenue, fueled by the transformative Walmart partnership, shows a clear path to future scale, but still couldn't offset the margin pressures and a wider-than-expected earnings per share (EPS) miss of -$0.12. So, the core question isn't about top-line momentum-they're projecting $40-$45 million in Automation net revenue for the full 2025 fiscal year-it's about when that high-growth, high-investment segment starts delivering consistent, positive net income (profitability).

Revenue Analysis

You're looking at Ranpak Holdings Corp. (PACK) and wondering where the growth is actually coming from, which is the right question to ask. The direct takeaway from the 2025 numbers is that while the core protective packaging business remains the revenue backbone, the high-growth story is now defintely in Automation, driven by a transformative new partnership.

For the third quarter of 2025, Ranpak Holdings Corp. reported net revenue of $99.6 million, an increase of 8.0% year-over-year. That's solid top-line growth, but you need to see the engine room to understand the momentum. The company's revenue streams break down into two main types: Net Product Revenue (the consumables like paper) and Machine Lease Revenue (the systems that dispense the paper).

Here's the quick math on the Q3 2025 split:

• Net Product Revenue: $83.6 million
• Machine Lease Revenue: $16.0 million

The Core Business vs. The Growth Engine

Ranpak Holdings Corp.'s traditional revenue comes from its Protective Packaging Systems (PPS) consumables: Cushioning, Void-fill, and Wrapping. Void-fill, which is the paper used to fill empty space in a box, is still the largest single product line, bringing in $43.4 million in Q3 2025. Cushioning and Wrapping added another $35.8 million and $8.5 million, respectively.

But the real action is in Automation. Automation net revenue surged by a massive 63.0% in Q3 2025, reaching $11.9 million. This segment is where the company is mapping its near-term opportunity, and management is guiding for 2025 Automation net revenue to hit approximately $40-$45 million for the full year.

Geographic and Strategic Shifts

Geographically, the revenue is split between North America and Europe/Asia, with Europe/Asia still contributing the larger portion of sales. For the first nine months of 2025, the Europe/Asia segment generated $153.5 million in net revenue, compared to $129.6 million from North America. Still, North America is accelerating, driven by strength in e-commerce and a significant new client relationship.

The most significant change in the revenue outlook is the strategic partnership with Walmart, which includes a warrant agreement forged through the company's innovations in Automation. This deal is transformative, as it could lead to up to $700 million in total spend over a ten-year period to achieve full warrant vesting, with over $100 million of that potential spend allocated to Automation solutions. This massive, long-term contract provides a very clear runway for the Automation segment to become a much larger piece of the revenue pie. You can read more about the implications of this in Exploring Ranpak Holdings Corp. (PACK) Investor Profile: Who's Buying and Why?

Q3 2025 Revenue Breakdown

To give you a precise view of where the money came from in the last reported quarter, here is the product-level breakdown:

What this estimate hides is the $0.8 million non-cash reduction in void-fill net revenue due to the provision for warrants in Q3 2025, which slightly understates the organic growth in that category. The key action for investors is to monitor the execution of the Automation backlog and the ramp-up of the new Enterprise customer relationships, as that is where the future revenue acceleration will be measured.

Profitability Metrics

You're looking at Ranpak Holdings Corp. (PACK) because you know the shift to paper-based protective packaging is a huge, long-term trend. But the question is, can they make real money doing it? The direct takeaway for the first nine months of 2025 is clear: Ranpak maintains a superior gross margin, a sign of their strong product value, but that advantage is completely erased by high operating costs and interest expense, resulting in a deep net loss.

For the nine months ended September 30, 2025, Ranpak Holdings Corp. reported net revenue of $283.1 million. Here's the quick math on their core profitability:

• Gross Profit Margin: 33.27%
• Operating Profit Margin: -8.27%
• Net Profit Margin: -10.17%

They are a high-margin product company that is defintely struggling with cost control and debt servicing. That's the one-liner.

Gross Margin: A Premium Product Advantage

Ranpak Holdings Corp.'s gross profit margin for the first nine months of 2025 was a robust 33.27% (on a gross profit of $94.2 million), which is a significant competitive advantage. For context, the broader Packaging & Containers industry average gross margin is around 22.4%, and the Paper & Paper Products industry average is even lower at about 10.7%. This wide gap shows the value of their systems-based model, where they place machines and sell high-margin paper consumables. It's a razor-and-blade model working well on the razor (paper) side.

However, this strength is under pressure. The nine-month gross profit of $94.2 million was a slight decrease from the prior year's $98.4 million, even though sales revenue increased. This indicates rising input costs-like paper and energy-are still outpacing their ability to pass on price increases or realize cost efficiencies. Still, the trend is improving: the third quarter of 2025 saw gross margins expand to 34.5%, up from 31.1% in the second quarter, reflecting the early impact of margin enhancement initiatives like cost reduction and increased pricing actions.

Operating Efficiency and Net Loss Trends

The profitability story flips completely once you move past the cost of goods sold. The company's loss from operations widened to $(23.4) million for the nine months of 2025, compared to a loss of $(14.2) million in 2024. This translates to an operating profit margin of -8.27%. To be fair, this is a massive underperformance compared to the estimated Packaging Sector average operating margin of 18.2% and a competitor like Packaging Corporation of America (PKG), which reported a trailing twelve-month operating margin of 12.69% as of September 2025.

The widening loss points to two key operational challenges:

• Higher Operating Expenses: Increased selling, general, and administrative (SG&A) expenses, plus higher depreciation, are eating up the gross profit.
• Interest Expense Drag: The net loss for the nine months ballooned to $(28.8) million (a -10.17% net margin), significantly worse than the $(10.7) million net loss in 2024. This is largely due to higher interest expenses on debt and foreign currency losses. The average Net Profit Margin for the Packaging & Containers industry is typically 4.0%, showing Ranpak Holdings Corp. is currently far from industry-standard bottom-line performance.

The company is banking on its Automation segment, which is expected to generate $40-$45 million in net revenue for 2025, to drive meaningful improvement in its overall financial profile, as management noted it was a $5 million drag on Adjusted EBITDA (AEBITDA) earlier in the year. For a deeper dive into their strategic direction, you should review their Mission Statement, Vision, & Core Values of Ranpak Holdings Corp. (PACK).

Next Step: Portfolio Managers should model a scenario where Ranpak Holdings Corp. achieves a 10% operating margin on their Protective Packaging business to see the impact of their current cost-cutting and margin initiatives, and what that implies for the stock price.

Debt vs. Equity Structure

Ranpak Holdings Corp. (PACK) relies significantly on debt to fuel its growth, a common strategy for capital-intensive industrial companies, but one that warrants close attention from investors. The company's debt-to-equity ratio sits at a relatively high 80.35% as of the most recent quarter in 2025, indicating a greater reliance on borrowed money than shareholder capital to finance its assets.

For context, a debt-to-equity ratio of 0.80 (or 80.35%) means that for every dollar of shareholder equity, Ranpak Holdings Corp. has about 80 cents of total debt. This is notably higher leverage than some peers like Packaging Corp of America, which had a D/E of 0.54 in late 2025, but lower than Graphic Packaging Holding Company's ratio of 1.807 earlier in the year.

Debt Levels and Composition (Q3 2025)

The bulk of Ranpak Holdings Corp.'s debt is long-term, which is typical for funding machinery, automation, and global expansion. As of September 30, 2025, the company's long-term debt stood at $397.2 million. The total debt picture is primarily composed of this long-term obligation.

Here's the quick math on the debt breakdown from the third quarter 2025 financial results:

• Long-Term Debt: $397.2 million
• Current Portion of Long-Term Debt (Short-Term): $5.9 million
• Outstanding First Lien Term Facility: $406.9 million (matures Dec 2031)

The company maintains a $50.0 million Revolving Credit Facility that matures in December 2029, but importantly, they had no borrowings drawn against it as of the third quarter of 2025, which provides a clean cushion for liquidity. Ranpak Holdings Corp. is defintely focused on managing its leverage, stating a goal for 2025 to de-lever and reach a net debt to Adjusted EBITDA ratio below 3.0x. This is a critical action item, as their net leverage was at 4.3 times on a last twelve months basis in the first quarter of 2025.

Balancing Debt and Equity Financing

Ranpak Holdings Corp. is balancing its debt-heavy structure with strategic, equity-linked transactions, which is a smart way to align with major customers. They haven't issued new traditional debt in 2025, but they are actively using equity to forge partnerships and drive future revenue.

Key equity-related activity in 2025 includes:

• Amazon Warrant Agreement: Signed in January 2025, this grants Amazon up to 18.7 million shares.
• Walmart Partnership: Signed in August 2025, providing Walmart with 22.5 million warrants at a strike price of $6.8308.

These warrants are essentially a form of deferred equity that ties future customer spending to potential share ownership. Plus, the company authorized a $50.0 million share repurchase program in 2025, which, if executed, would reduce the share count and return capital to shareholders, counterbalancing the potential dilution from the new warrants. This dual approach shows they are using debt for long-term assets while using equity-linked deals to secure top-line growth. If you want to dive deeper into the full picture, you can find more details in the complete analysis: Breaking Down Ranpak Holdings Corp. (PACK) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need to know if Ranpak Holdings Corp. (PACK) has the cash to cover its near-term bills while still funding its growth projects. The short answer is yes, the company maintains a solid liquidity position, but its cash flow profile shows a need for better working capital management and operating efficiency to turn a profit into actual cash.

Current and Quick Ratios Signal Safety

As of September 30, 2025, Ranpak Holdings Corp.'s liquidity ratios are comfortably above the typical 1.0 threshold, which is a good sign. The Current Ratio, which measures the ability to cover short-term liabilities with short-term assets, stood at approximately 1.88. This means the company has $1.88 in current assets for every dollar of current liabilities. The Quick Ratio (or acid-test ratio), which excludes less-liquid assets like inventory, was also strong at about 1.42. A Quick Ratio above 1.0 is defintely a mark of financial health, showing that even without selling more inventory, the company can meet its immediate obligations.

Here's the quick math on the key liquidity metrics from the Q3 2025 balance sheet:

• Current Assets: $146.7 million
• Total Current Liabilities: $78.2 million
• Cash and Cash Equivalents: $49.9 million

Working Capital and Inventory Trends

The company's working capital (Current Assets minus Current Liabilities) as of Q3 2025 was approximately $68.5 million. While this is a healthy absolute number, the trend in inventory is a key point for investors. The inventory balance increased to $36.0 million at the end of Q3 2025 from $21.7 million at the end of 2024. Management noted this was partly a deliberate move to prepare for the peak season and insulate against supply disruptions, but still, elevated inventory ties up cash. The risk is that if sales slow, this inventory could become a drag on future cash flow. You want to see that inventory turn into cash, not sit on the balance sheet.

Cash Flow Statements Overview: Operating vs. Investing

When you look at the cash flow statement, a more nuanced picture emerges. Over the last twelve months (LTM), Ranpak Holdings Corp. generated a modest Operating Cash Flow (OCF) of approximately $10.10 million. This is the cash generated from the core business operations. However, the company is in a capital-intensive growth phase, especially in its Automation segment. This is evident in the Investing Cash Flow (ICF), primarily driven by capital expenditures (CapEx), which was a net outflow of about -$32.90 million LTM.

Here's the breakdown:

• Operating Cash Flow (OCF, LTM): $10.10 million
• Investing Cash Flow (ICF, LTM CapEx): -$32.90 million
• Free Cash Flow (FCF, LTM): -$22.80 million

The result is a negative Free Cash Flow (FCF) of -$22.80 million LTM. This means the cash generated from operations is not yet enough to cover the investment needed to grow the business. This is not uncommon for a company focused on expansion, but it requires careful monitoring.

Liquidity Strengths and Concerns

The primary strength is the ample cushion against short-term default. The high Current and Quick Ratios, plus the fact that Ranpak Holdings Corp. has no borrowings on its $50.0 million revolving credit facility, provide significant financial flexibility. The Financing Cash Flow trend shows a slight reduction in long-term debt, which stood at $397.2 million as of Q3 2025, indicating a responsible approach to its existing debt load.

The main concern is the negative FCF, which forces the company to rely on its cash reserves or external financing to fund growth. The path to positive FCF will rely heavily on the successful conversion of its strategic partnerships, like the one with Walmart, into higher-margin, cash-generating revenue, especially from its Automation segment. For a deeper dive into the company's long-term strategy, you can read our full analysis: Breaking Down Ranpak Holdings Corp. (PACK) Financial Health: Key Insights for Investors.

Valuation Analysis

You want to know if Ranpak Holdings Corp. (PACK) is a buy, a sell, or a hold right now. Based on the latest 2025 financial data, the stock appears to be trading at a reasonable, perhaps slightly undervalued, level when you look at its Price-to-Book (P/B) ratio, but the lack of a meaningful Price-to-Earnings (P/E) ratio due to net losses complicates the picture. The consensus among analysts leans toward a 'Hold' or 'Moderate Buy,' suggesting the market is waiting for sustained profitability.

Here's the quick math on where Ranpak Holdings Corp. stands today, grounded in its 2025 fiscal performance.

• Price-to-Earnings (P/E): This metric is not meaningful (NM) because Ranpak Holdings Corp. reported a net loss of $10.4 million in the third quarter of 2025. When a company is losing money, the P/E ratio is negative or undefined, making it useless for comparison.
• Price-to-Book (P/B): The TTM (Trailing Twelve Months) P/B ratio is around 1.04. This is a good sign. It means the stock price is trading very close to the company's book value (assets minus liabilities), which can suggest it's not overvalued.
• Enterprise Value-to-EBITDA (EV/EBITDA): The TTM EV/EBITDA is around 14.30. This multiple is a bit on the higher side for a company with inconsistent profitability, but it reflects a market capitalization of $395.72 million and an enterprise value of $777.92 million, acknowledging the debt on the balance sheet. Honestly, the market is pricing in the anticipated automation growth, which surged by 63.0% in Q3 2025.

The stock price trends over the last 52 weeks show significant volatility, which is typical for growth-focused companies tackling market headwinds. The 52-week range has spanned from a low of $2.91 to a high of $8.70. This wide swing tells you that investor sentiment is defintely mixed, moving sharply with each earnings report and strategic partnership announcement, like the one with Walmart.

Regarding income, Ranpak Holdings Corp. is not a dividend stock. The TTM dividend payout is $0.00, resulting in a dividend yield of 0.00% as of November 2025. The company is prioritizing reinvestment into its core business, particularly automation and its paper-based protective packaging solutions, over shareholder payouts. That's a common strategy for companies focused on scaling and capturing market share, especially in the e-commerce space.

Wall Street analysts are split, but the consensus on Ranpak Holdings Corp. (PACK) is a Hold. Out of four recent analyst ratings, you have two 'Buy' ratings, one 'Hold,' and one 'Sell'. The average 12-month price target is set at $7.50. What this estimate hides is the execution risk on their large contracts and the continued pressure from the non-cash reduction in revenue due to the Amazon warrants, which was $0.8 million in Q3 2025.

For a deeper dive into the operational and strategic factors driving these numbers, you should check out our full analysis: Breaking Down Ranpak Holdings Corp. (PACK) Financial Health: Key Insights for Investors.

Risk Factors

You're seeing Ranpak Holdings Corp. (PACK) push hard on automation and North American growth, but honestly, the financial picture is still a mixed bag. The company is dealing with significant macroeconomic headwinds and a high debt load, so you need to map those risks against the growth potential.

The most pressing internal risk is the profitability challenge, which you can see right in the Q3 2025 numbers. Ranpak reported a net loss of $10.4 million, which is a widening from the net loss of $8.1 million in the prior year period. Plus, the Amazon warrant agreement, while strategically valuable, creates a non-cash headwind, reducing revenue and Adjusted EBITDA (AEBITDA) by $0.8 million in Q3 2025 alone.

Operational and Financial Headwinds

The company's debt structure presents a clear financial risk. As of September 30, 2025, Ranpak Holdings Corp. had $406.9 million outstanding under its first lien term facility. This translates to a net leverage ratio (net debt to AEBITDA) of 4.4x as of Q3 2025. That's high, and it makes the company vulnerable if the promised growth in automation doesn't materialize fast enough to boost AEBITDA and support the goal of de-levering to below 3.0x.

Operationally, the geographic imbalance is a concern. While North American e-commerce is strong, the Europe/Asia segment is struggling, with Protective Packaging Systems (PPS) volumes in Europe/Asia declining by 2.5% in Q3 2025 due to a challenging macroeconomic environment. This regional volatility makes the overall revenue forecast less defintely predictable.

• High leverage: 4.4x net debt to AEBITDA as of Q3 2025.
• Profitability: Q3 2025 net loss of $10.4 million widened year-over-year.
• Regional Weakness: Europe/Asia PPS volumes declined 2.5% in Q3 2025.

External Competition and Mitigation Strategies

The competitive landscape is fierce. Ranpak Holdings Corp. is positioned as a Tier 2 player in the interior packaging market, holding about 30% market share as of February 2025. They are up against Tier 1 leaders like Sealed Air Corporation, Smurfit Kappa, and Pregis, who collectively command 39% of the market. Competition is always a threat to pricing power and market share, especially if a competitor makes a major leap in sustainable or automated solutions.

To be fair, management is taking clear actions to mitigate these risks. They are implementing structural cost reductions, targeting $8 million in annualized savings to improve the margin profile. This focus is working, as gross margins expanded sequentially to 34.5% in Q3 2025 from 31.1% in Q2 2025. Also, the strategic focus on Automation-targeting $40-$45 million in net revenue for 2025-and major partnerships with companies like Walmart (a potential total spend of up to $700 million over the contract's life) are clear efforts to secure long-term, high-growth revenue streams.

Here's the quick math on the debt situation:

The key for you as an investor is watching how quickly the high-margin Automation segment grows and if the cost-cutting can offset the macroeconomic drag in Europe. If you want a deeper dive into who is betting on this turnaround, you should check out Exploring Ranpak Holdings Corp. (PACK) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking for where Ranpak Holdings Corp. (PACK) turns its sustainable packaging focus into serious profit, and the answer is simple: automation and enterprise partnerships. The company is strategically shifting from just selling paper consumables to deploying high-margin, systems-based solutions, which is the defintely the right move for long-term growth.

For the full 2025 fiscal year, the company's implied guidance midpoint suggests total net revenue of around $406.5 million. While the consensus earnings estimate for 2025 is a loss of -$0.30 per share, this figure hides the massive capital expenditure and strategic investment driving the automation segment, which is the true growth engine. The company is playing a long game by building out its installed base of machinery.

Key Growth Drivers: Automation and Innovation

The primary catalyst for Ranpak Holdings Corp.'s future is its automation segment. This is where the systems-based model shines, pairing their proprietary paper consumables with high-tech machinery. Honestly, the numbers speak for themselves:

• Automation Revenue Surge: Automation net revenue is projected to hit between $40 million and $45 million for 2025. This is substantial, especially considering the third quarter of 2025 saw a remarkable 63.0% increase in automation net revenue year-over-year.
• Product Innovation: Ranpak Holdings Corp. is expanding its portfolio beyond void-fill and cushioning. They've integrated PaperWrap, a solution to replace traditional plastic stretch film for pallet wrapping, which directly targets a massive single-use plastic market.
• Market Expansion: North America remains a core strength, driving significant growth in its Protective Packaging Solutions (PPS) volumes, but the company is also expanding its global footprint, notably with its Malaysia factory to improve access to Asian markets.

Strategic Partnerships and Competitive Edge

A competitive advantage (or 'moat') in this business is built on two things: a sticky product ecosystem and deep customer integration. Ranpak Holdings Corp. has both, largely due to its machine-on-loan model, which locks in recurring revenue from paper consumables. As of September 30, 2025, they had approximately 145.6 thousand packaging systems placed globally. That's a huge installed base.

The biggest near-term opportunity comes from strategic alliances. The multi-year partnership and warrant agreement signed with Walmart in August 2025 is a game-changer, solidifying Ranpak Holdings Corp.'s position in warehouse automation. This agreement alone is estimated to be potentially worth up to $700 million over a decade, providing incredible revenue visibility. Plus, their ongoing relationship with Amazon continues to drive volume through warrant-related agreements.

Here's the quick math on the automation segment's expected contribution to 2025 revenue:

What this estimate hides is the margin expansion expected from the automation segment as it scales. It's transitioning from an EBITDA drag to a positive contributor, thanks to the high-volume, enterprise-level adoption of solutions like the AutoFill™ systems being deployed at Walmart's Next Generation Fulfillment Centers.

If you want a deeper dive into the company's fundamentals, you should check out Breaking Down Ranpak Holdings Corp. (PACK) Financial Health: Key Insights for Investors.

Finance: Track the Q4 2025 automation revenue against the $40-$45 million full-year target to confirm execution on this core growth strategy.