Ranpak Holdings Corp.: Form 10-Q for the period ended Sep 30, 2025

The following discussion and analysis is intended to help the reader understand our business, financial condition, results of operations, liquidity and capital resources. You should read this discussion in conjunction with the sections entitled “Risk Factors” and “Forward-Looking Statements,” and our financial statements and related notes included in this Quarterly Report as well as the section entitled, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Ranpak included in our 2024 10-K, filed with the SEC on March 17, 2025. Capitalized terms used and not defined herein have the meanings disclosed elsewhere in the Quarterly Report.

The following discussion contains forward-looking statements that reflect future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside of the Company's control. The Company’s actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report.

Overview

Ranpak is a leading provider of environmentally sustainable, systems-based, product protection and end-of-line automation solutions for e-commerce and industrial supply chains. Since our inception in 1972, we have delivered high quality protective packaging solutions, while maintaining commitment to environmental sustainability. We provide our paper-based Protective Packaging Solutions (“ PPS”) systems and paper consumables to distributors and certain select end-users. We operate manufacturing facilities in the United States, Europe and Asia. For our Automation product lines, we currently have dedicated facilities in Shelton, Connecticut and the Netherlands. R Squared Robotics, a division of Ranpak, uses three-dimensional computer vision and artificial intelligence technologies to improve end-of-line packaging and logistics functions. We are a global business that generated approximately 56% of our 2024 net revenue outside of the United States.

As of September 30, 2025, we had an installed base of approximately 145.6 thousand PPS systems serving a diverse set of distributors and end-users. We generated net revenue of $283.1 million and $263.9 million in the nine months ended September 30, 2025 and 2024, respectively.

We have two segments, North America and Europe/Asia. Management evaluates segment performance by net revenue and Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) by geographic region.

Key Performance Indicators and Other Factors Affecting Performance

We use the following key performance indicators and monitor the following other factors to analyze our business performance, determine financial forecasts, and help develop long-term strategic plans.

PPS Systems Base — We closely track the number of PPS systems installed with end-users as it is a leading indicator of underlying business trends and near-term and ongoing net revenue expectations. Our installed base of PPS systems also drives our capital expenditure budgets. The following table presents our installed base of PPS systems as of September 30, 2025 and 2024:

(in thousands)

26

Paper and Other Costs. Paper is a key component of our cost of goods sold and paper costs can fluctuate significantly between periods. We purchase both 100% virgin and 100% recycled paper, as well as blends, from various suppliers for conversion into the paper consumables we sell. The cost of paper supplies is our largest input cost, and we historically have negotiated supply and pricing arrangements with most of our paper suppliers annually, with a view towards mitigating fluctuations in paper cost. Nevertheless, as paper is a commodity, its price on the open market, and in turn the prices we negotiate with suppliers at a given point in time, can fluctuate significantly, and is affected by several factors outside of our control, including inflationary pressures, supply and demand and the cost of other commodities that are used in the manufacture of paper, including wood, energy, and chemicals. For example, energy prices in Europe have experienced recent increased volatility, and such volatility has, in the past, increased the cost of paper. The market for our solutions is competitive and it may be difficult to pass on increases in paper prices to our customers immediately, or at all, which has in the past, and could in the future, adversely affect our operating results. Although we look to pass increased market costs on to our customers to mitigate the impact of these costs, we are unable to predict our ability to pass these costs on to our customers and how much of these increases we will be able to pass on to our customers. As such, we expect some continued pressure on our gross margin in the medium term relative to our historical margin profile.

Effect of Currency Fluctuations. As a result of the geographic diversity of our operations, we are exposed to the effects of currency translation, which has affected the comparability of our results of operations between the periods presented in this Quarterly Report and may affect the comparability of our results of operations in future periods. Currency transaction exposure results when we generate net revenue in one currency at one time and incur expenses in another currency at another time, or when we realize gain or loss on intercompany transfers. While we seek to limit currency transaction exposure by matching the currencies in which we incur sales and expenses, we may not always be able to do so.

In addition, we are subject to currency translation exposure because the operations of our subsidiaries are measured in their functional currency, which is the currency of the primary economic environment in which the subsidiary operates. Any currency balances that are denominated in currencies other than the functional currency of the subsidiary are re-measured into the functional currency, with the resulting gain or loss recorded in the foreign currency (gains) losses line-item in our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss. In turn, subsidiary income statement balances that are denominated in currencies other than USD are translated into USD, our reporting currency, in consolidation using the average exchange rate in effect during each fiscal month during the period, with any related gain or loss recorded as foreign currency translation adjustments in other comprehensive income (loss). The assets and liabilities of subsidiaries that use functional currencies other than the USD are translated into USD in consolidation using period end exchange rates, with the effects of foreign currency translation adjustments included in accumulated other comprehensive income (loss).

We hedge some of our exposure to foreign currency translation with a cross-currency swap. Refer to Note 8 — Derivative Instruments to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information. Significant currency fluctuations could impact the comparability of results between periods, while such fluctuations coupled with material mismatches in net revenue and expenses could also adversely impact our cash flows. See “Quantitative and Qualitative Disclosures About Market Risk.”

Inflationary Pressures and Other Costs. We have continued to experience inflationary pressures in 2025, which have adversely impacted some of our end-users, such as automotive companies; distributors; electronic manufacturers; machinery manufacturers; e-commerce and mail order fulfillment firms; and other end-users that are particularly sensitive to reductions in business and consumer spending by their respective customers, and which in turn have impacted our net revenue. Higher costs due to inflation were partially offset by price increases, which mitigated the impact on our operating results. However, our ability to predict or further offset inflationary cost increases in the future or during economic downturns or recessions may be limited or impacted by heightened competition for market share, an unwillingness by our customers to accept price increase or pressure to reduce selling prices if end-users reduce their volume of purchases. Inflationary pressures and associated higher interest rates and borrowing costs may also impact the ability of some of our end-users and suppliers to obtain funds for operations and capital expenditures, which could negatively impact our ability to obtain necessary supplies as well as the sales of materials and equipment to affected end-users. This could also result in reduced or delayed collections of outstanding accounts receivable from end-users, which could impact our cash flows. As a result, to the extent inflationary pressures continue, we expect additional pressure on our net revenue and gross margin. We will continue to evaluate the impact of inflationary pressures on our profitability and cash flows as well as our end-users.

In addition to inflationary pressures, our U.S. operations are subject to the impact of tariffs, largely related to our capital expenditures of our PPS converters, some of which are sourced from China or contain parts and components from China and other Asian countries. We are taking steps to minimize the potential impact of these tariffs by evaluating alternative parts and global suppliers as well as stepping up our efforts to refabricate and refurbish existing machines in our fleet to reduce cost. Our box customization equipment is currently made in Europe and shipped to the United States and thus will be subject to the European tariff rate. We are focused on cost out and efficiencies to minimize the impact to our customers, and believe in the ongoing value proposition of our equipment.

Seasonality. We estimate that over a third of our net revenue in 2024, either directly or to distributors, was destined for end-users in the e-commerce sectors, whose businesses frequently follow traditional retail seasonal trends, including a concentration of sales in the holiday period in the fourth quarter. Our results tend to follow similar patterns, with the highest net revenue typically recorded in our fourth fiscal quarter and the slowest sales in our first fiscal quarter of each fiscal year. We expect this seasonality to continue in the future and, as a result, our results of operations between fiscal quarters in a given year may not be directly comparable.

Non-GAAP Measures

EBITDA and Adjusted EBITDA (“AEBITDA”)

Our unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We also present EBITDA and AEBITDA, which are non-GAAP financial measures, because they are key measures used by our management and board of directors to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating EBITDA and AEBITDA can provide a useful measure for period-to-period comparisons of our primary business operations. We believe that EBITDA and AEBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

EBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; and depreciation and amortization.

AEBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; depreciation and amortization; stock-based compensation expense; foreign currency (gain) loss; amortization of cloud-based software implementation costs; and, in certain periods, other income and expense items.

We reconcile this data to our GAAP data for the same periods presented.

Constant Currency

We operate globally, and a substantial portion of our net revenue and operations is denominated in foreign currencies, primarily the Euro. We calculate the year over-year impact of foreign currency movements using prior period foreign currency rates applied to current year results. These “constant currency” change amounts are non-GAAP measures and are not in accordance with, or an alternative to, measures prepared in accordance with GAAP. In addition, constant currency change measures are not based on any established set of accounting rules or principles.

In calculating the Constant Currency (Non-GAAP) % Change, the current year is translated at the average exchange rate for the comparable prior year period, when comparing the current year to the prior year. We believe that our Constant Currency (Non-GAAP) % Change presentation provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Cautionary Notice Regarding Non-GAAP Measures

Non-GAAP measures, such as EBITDA, AEBITDA, and constant currency change, have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. In particular, non-GAAP financial measures should not be viewed as substitutes for, or superior to, net income (loss) prepared in accordance with GAAP as a measure of profitability or liquidity. Some of these limitations are:

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and AEBITDA do not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
• EBITDA and AEBITDA do not reflect changes in, or cash requirements for, our working capital needs;
• EBITDA and AEBITDA do not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;
• AEBITDA does not consider the potentially dilutive impact of stock-based compensation, and in certain periods, other income and expense items, such as restructuring and integration costs;
• constant currency change measures exclude the foreign currency exchange rate impact on our foreign operations; and
• other companies, including companies in our industry, may calculate EBITDA, AEBITDA, and constant currency change differently, which reduces their usefulness as comparative measures.

Consolidated Results of Operations

The following tables set forth our consolidated results of operations for the three months ended September 30, 2025 and 2024, presented in millions of dollars. “NM” represents “not meaningful.”

In addition, in our discussion below, we include certain other unaudited, non-GAAP data and Constant Currency (Non-GAAP) % Change data for the three months ended September 30, 2025 and 2024. This data is based on our historical financial statements included elsewhere in this Quarterly Report. Refer to “Non-GAAP Measures” and “Reconciliation of GAAP to Non-GAAP Measures” for additional information and a reconciliation of EBITDA and AEBITDA to our net loss under GAAP.

Comparison of Third Quarter of 2025 to Third Quarter of 2024

29

Net Revenue

In the third quarter of 2025, we changed our presentation of “Other net revenue” to refer to “Automation net revenue.” Consistent with prior periods, this line item primarily includes sales of our automated equipment as well as an insignificant amount related to non-paper revenue from packaging systems installed in the field, such as system accessories.

The following table and the discussion that follows compares our net revenue by product line for three months ended September 30, 2025 and 2024 on a GAAP basis and also presents the Constant Currency (Non-GAAP) % Change. See also “Non-GAAP Measures” for further details:

Net revenue for the third quarter of 2025 was $99.6 million compared to $92.2 million for the third quarter of 2024, an increase of $7.4 million or 8.0% (4.4% on a constant currency basis) and includes a non-cash reduction of $0.8 million to void-fill net revenue from the provision for warrants. Net revenue was positively impacted primarily by increases in automation, void-fill, and wrapping. Cushioning increased $0.1 million, or 0.3%, to $35.8 million from $35.7 million; void-fill increased $2.0 million, or 4.8%, to $43.4 million from $41.4 million; wrapping increased $0.7 million, or 9.0%, to $8.5 million from $7.8 million; and automation net revenue increased $4.6 million, or 63.0% to $11.9 million from $7.3 million for the third quarter of 2025 compared to the third quarter of 2024.

The increase in net revenue for the third quarter of 2025 compared to the third quarter of 2024 is quantified by a 4.5% increase in the automated equipment sales, a 3.6% increase from foreign currency fluctuations, and a 1.0% increase in the price or mix of our paper consumable products, partially offset by a decrease in the volume of sales of our paper consumable products of approximately 0.3%, and includes a 0.8% non-cash decrease from the provision for warrants.

Cost of Sales

Cost of sales for the third quarter of 2025 totaled $65.2 million, an increase of $7.4 million, or 12.8% (9.3% at constant currency), compared to $57.8 million in the third quarter of 2024. We have quantified the change in cost of sales as follows:

The increase in cost of sales was primarily due to an increase in production costs of 9.5% and fluctuations in foreign currency rates of 3.5%, partially offset by a decrease in the volume of products sold of 0.2% compared to the third quarter of 2024. Production costs include costs from materials, labor and overhead, and depreciation expense.

Operating expenses

Selling, General, and Administrative (“SG&A”) Expenses. SG&A expenses for the third quarter of 2025 were $29.6 million, an increase of $0.8 million, or 2.8%, from $28.8 million in the third quarter of 2024. The increase in SG&A expenses was primarily due to a $2.1 million increase in professional services fees, partially offset by a $1.2 million decrease in compensation and temporary labor costs, compared to the third quarter of 2024. SG&A expenses were further impacted by foreign currency headwinds in the third quarter of 2025 as compared to 2024.

Depreciation and Amortization Expense. Depreciation and amortization expense for the third quarter of 2025 was $9.2 million, an increase of $1.0 million, or 12.2%, from $8.2 million in the third quarter of 2024. The increase in depreciation and amortization expense was primarily due to an increase in amortization of internal-use software of $0.5 million and an increase in depreciation of machinery and equipment of $0.3 million for the third quarter of 2025 compared to the third quarter of 2024.

Other Operating Expense, Net. Other operating expense, net for the third quarter of 2025 was $1.3 million, a decrease of $0.3 million from $1.6 million in the third quarter of 2024, due to decreased loss on the disposal of property, plant, and equipment for the third quarter of 2025 compared to the third quarter of 2024.

Interest Expense

Interest expense for the third quarter of 2025 was $8.7 million, a decrease of $0.6 million, or 6.5%, from $9.3 million in the third quarter of 2024. The decrease was primarily due to a $1.0 million increase in interest income from the effects of our swap agreements and a $0.4 million decrease in amortization of deferred financing costs, partially offset by a $0.6 million increase in interest expense associated with our First Lien Credit Facilities in the third quarter of 2025 compared to the third quarter of 2024.

Foreign Currency Loss

Foreign currency loss for the third quarter of 2025 was $0.2 million, consistent with the third quarter of 2024.

Other Non-Operating Income, Net

Other non-operating income, net for the third quarter of 2024 was $3.1 million and represents an unrealized gain on our strategic investment in Pickle.

Income Tax Benefit

Income tax benefit for the third quarter of 2025 was $4.2 million, or an effective tax rate of 28.1%. Income tax benefit was $2.5 million in the third quarter of 2024, or an effective tax rate of 23.2%. The fluctuation in the effective tax rate between periods is primarily attributable to taxes related to foreign activities and no impact from stock-based compensation for the same period in 2024. The difference between the effective tax rate for the third quarter of 2025 and the combined federal and state statutory rates is primarily due to state income taxes.

EBITDA and AEBITDA

EBITDA and AEBITDA are non-GAAP measures. Refer to the section “Reconciliation of GAAP to Non-GAAP Measures.” EBITDA for the third quarter of 2025 was $11.9 million, a decrease of $0.7 million, or 5.6%, compared to $12.6 million in the third quarter of 2024. AEBITDA for the third quarter of 2025 was $21.4 million, a decrease of $1.6 million, or 8.1% (3.5% on a constant currency basis), compared to $19.8 million in the third quarter of 2024. AEBITDA for the third quarter of 2025 includes a non-cash reduction to net revenue from the provision for warrants of $0.8 million.

Segment Results of Operations - Third Quarter of 2025 and Third Quarter of 2024

The following tables set forth our net revenue by segment for the third quarter of 2025 and the third quarter of 2024, presented in millions of dollars:

Net revenue in North America for the third quarter of 2025 totaled $44.7 million compared to $40.3 million in the third quarter of 2024. The increase of $4.4 million, or 10.9%, for the third quarter of 2025 compared to the third quarter of 2024 was attributable to increases in void-fill, automation, and wrapping sales, partially offset by a decrease in cushioning sales, and includes a non-cash reduction of $0.7 million in void-fill net revenue from the provision for warrants. The increase in net revenue for North America can be quantified by a 5.1% increase from automated equipment sales, a 3.8% increase in the price/mix of our paper consumable products, and an increase in volume of 3.7%, partially offset by a 1.7% non-cash decrease from the provision for warrants.

Net revenue in Europe/Asia for the third quarter of 2025 totaled $54.9 million compared to net revenue of $51.9 million in the third quarter of 2024. The increase of $3.0 million, or 5.8%, for the third quarter of 2025 compared to the third quarter of 2024 was attributable to increases in automation, wrapping, and cushioning sales, partially offset by a decrease in void-fill sales. The increase in net revenue for Europe/Asia can be quantified by a 6.4% increase due to foreign currency fluctuations and a 4.0% increase from automated equipment sales, partially offset by a 2.5% decrease in volume, a 1.9% decrease in the price/mix of our paper consumable products, and a 0.2% non-cash decrease from the provision for warrants.

The following table sets forth segment EBITDA, presented in millions of dollars:

North America and Europe/Asia segment EBITDA includes intersegment royalty charges from North America to Europe/Asia for use of trademarks of $3.8 million and $5.3 million for the three months ended September 30, 2025 and 2024, respectively, which eliminates on a consolidated basis.

Segment EBITDA for North America was $3.0 million for the third quarter of 2025 compared to $8.3 million in the third quarter of 2024, a decrease of $5.3 million, or 63.9%. The decrease was primarily due to a $3.1 million non-recurring gain on our investment in Pickle in the third quarter of 2024 and a $2.3 million increase in professional services fees for the third quarter of 2025, partially offset by higher gross profit in the current year period due to increased net revenue as described in the paragraphs above.

Segment EBITDA for Europe/Asia was $8.9 million for the third quarter of 2025 compared to $4.3 million in the third quarter of 2024, an increase of $4.6 million, or 107.0%. The increase was primarily due to increased net revenue as described in the paragraphs above.

Consolidated Results of Operations

The following tables set forth our consolidated results of operations for the nine months ended September 30, 2025 and 2024, presented in millions of dollars. “NM” represents “not meaningful.”

In addition, in our discussion below, we include certain other unaudited, non-GAAP data and Constant Currency (Non-GAAP) % Change data for the nine months ended September 30, 2025 and 2024. This data is based on our historical financial statements included elsewhere in this Quarterly Report. Refer to “Non-GAAP Measures” and “Reconciliation of GAAP to Non-GAAP Measures” for additional information and a reconciliation of EBITDA and AEBITDA to our net loss under GAAP.

Comparison of Nine Months Ended September 30, 2025 to Nine Months Ended September 30, 2024

Net Revenue

The following table and the discussion that follows compares our net revenue by product line for nine months ended September 30, 2025 and 2024 on a GAAP basis and also presents the Constant Currency (Non-GAAP) % Change. See also “Non-GAAP Measures” for further details:

Net revenue for the nine months ended September 30, 2025 was $283.1 million compared to $263.9 million for the nine months ended September 30, 2024, an increase of $19.2 million or 7.3% (5.6% on a constant currency basis) and includes a non-cash reduction of $2.8 million to void-fill net revenue from the provision for warrants. Net revenue was positively impacted by increases in void-fill, automation, and wrapping net revenue, partially offset by a decrease in cushioning. Cushioning decreased $0.2 million, or 0.2%, to $107.8 million from $108.0 million; void-fill increased $12.6 million, or 11.2%, to $124.8 million from $112.2 million; wrapping increased $0.4 million, or 1.6%, to $25.2 million from $24.8 million; and automation net revenue increased $6.4 million or 33.9% to $25.3 million from $18.9 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

The increase in net revenue for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 is quantified by a 5.4% increase in the volume of sales of our paper consumable products, a 2.2% increase in automated equipment sales, and a 1.7% increase from foreign currency fluctuations, partially offset by a 1.1% non-cash decrease from the provision for warrants and a 0.9% decrease in the price/mix of our paper consumable products.

Cost of Sales

Cost of sales for the nine months ended September 30, 2025 totaled $188.9 million, an increase of $23.4 million, or 14.1% (12.5% at constant currency), compared to $165.5 million in the nine months ended September 30, 2024. We have quantified the change in cost of sales as follows:

The increase in cost of sales was primarily due to an increase in production costs of 7.5%, an increase in the volume of products sold of 5.0%, and fluctuations in foreign currency rates of 1.6% compared to the nine months ended September 30, 2024. Production costs include costs from materials and labor and overhead.

Operating expenses

Selling, General, and Administrative (“SG&A”) Expenses. SG&A expenses for the nine months ended September 30, 2025 were $87.3 million, an increase of $3.3 million, or 3.9%, from $84.0 million in the nine months ended September 30, 2024. The increase in SG&A expenses was due to a $1.7 million increase in information technology maintenance costs, a $1.4 million increase in stock-based compensation expense, and a $1.4 million increase in professional services fees, partially offset by a $1.6 million decrease in temporary labor costs for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. SG&A expenses were further impacted by foreign currency headwinds in the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

Depreciation and Amortization Expense. Depreciation and amortization expense for the nine months ended September 30, 2025 was $27.0 million, an increase of $2.1 million, or 8.4%, from $24.9 million in the nine months ended September 30, 2024. The increase in depreciation and amortization expense was primarily due to an increase in amortization of internal-use software of $1.5 million and an increase in depreciation of machinery and equipment of $0.4 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Other Operating Expense, Net. Other operating expense, net for the nine months ended September 30, 2025 was $3.3 million, a decrease of $0.4 million from $3.7 million in the nine months ended September 30, 2024. The decrease was due to a $0.7 million decrease in loss from disposal of property, plant, and equipment, partially offset by a $0.3 million increase in research and development expense for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Interest Expense

Interest expense for the nine months ended September 30, 2025 was $25.7 million, an increase of $4.9 million, or 23.6%, from $20.8 million in the nine months ended September 30, 2024. The increase was primarily due to a $5.5 million decrease in interest income due to the expiration of our interest rate swap during the second quarter of 2024 and a $0.8 million increase in interest expense associated with our First Lien Credit Facilities, partially offset by a $1.2 million decrease in amortization of deferred financing costs.

Foreign Currency Gain

Foreign currency gain for the nine months ended September 30, 2025 was $5.0 million, an increase of $3.9 million, from foreign currency gain of $1.1 million in the nine months ended September 30, 2024 due to the volatility in Euro exchange rates compared to USD.

Other Non-Operating Income, Net

Other non-operating income, net for the nine months ended September 30, 2025 was $5.9 million, and primarily represents a $5.8 million unrealized gain on our strategic investment in Pickle. Other non-operating income, net for the nine months ended September 30, 2024 was $21.0 million and primarily represents $16.1 million in patent litigation settlement proceeds and a $5.4 million gain on the sale of patents, partially offset by a $0.4 million unrealized loss on our strategic investment in Pickle.

Income Tax Benefit

Income tax benefit for the nine months ended September 30, 2025 was $9.4 million, or an effective tax rate of 24.5%. Income tax benefit was $2.2 million in the nine months ended September 30, 2024, or an effective tax rate of 16.8%. The fluctuation in the effective tax rate between periods is primarily attributable to state income taxes, taxes related to foreign activities and tax expense related to a stock-based compensation windfall and shortfall recognized for the nine months ended September 30, 2025 and 2024, respectively. The difference between the effective tax rate and the combined federal and state statutory rates is primarily due to state income taxes.

EBITDA and AEBITDA

EBITDA and AEBITDA are non-GAAP measures. Refer to the section “Reconciliation of GAAP to Non-GAAP Measures.” EBITDA for the nine months ended September 30, 2025 was $37.2 million, a decrease of $20.1 million, or 35.1%, compared to $57.3 million in the nine months ended September 30, 2024. AEBITDA for the nine months ended September 30, 2025 was $55.2 million, a decrease of $3.4 million, or 5.8% (7.8% on a constant currency basis), compared to $58.6 million in the nine months ended September 30, 2024. AEBITDA for the nine months ended September 30, 2025 includes a non-cash reduction to net revenue from the provision for warrants of $2.8 million.

Segment Results of Operations - Nine Months Ended September 30, 2025 and Nine Months Ended September 30, 2024

The following tables set forth our net revenue by segment for the nine months ended September 30, 2025 and the nine months ended September 30, 2024, presented in millions of dollars:

Net revenue in North America for the nine months ended September 30, 2025 totaled $129.6 million compared to net revenue in North America of $109.9 million in the nine months ended September 30, 2024. The increase of $19.7 million, or 17.9%, was attributable to increases in void-fill, automation, wrapping, and cushioning sales, and includes a non-cash reduction of $2.6 million in void-fill net revenue from the provision for warrants. The increase in net revenue for North America can be quantified by an increase in volume of 18.8% and a 4.2% increase from automated equipment sales, partially offset by a 2.7% decrease in the price/mix of our paper consumable products and a 2.4% non-cash decrease from the provision for warrants.

Net revenue in Europe/Asia for the nine months ended September 30, 2025 totaled $153.5 million compared to net revenue of $154.0 million in the nine months ended September 30, 2024. The decrease of $0.5 million, or 0.3% (3.1% on a constant currency basis, was attributable to decreases in void-fill, wrapping, and cushioning sales, partially offset by an increase in automation net revenue. The decrease in net revenue for Europe/Asia can be quantified by a 2.6% decrease in the price/mix of our paper consumable products, a decrease in volume of 1.1%, and a non-cash decrease of 0.1% from the provision for warrants, partially offset by a 2.8% increase due to foreign currency fluctuations and a 0.7% increase from automated equipment sales.

The following table sets forth segment EBITDA, presented in millions of dollars:

North America and Europe/Asia segment EBITDA includes intersegment royalty charges from North America to Europe/Asia for use of trademarks of $16.6 million and $12.2 million for the nine months ended September 30, 2025 and 2024, respectively, which eliminates on a consolidated basis.

Segment EBITDA for North America was $11.1 million for the nine months ended September 30, 2025 compared to $17.4 million in the nine months ended September 30, 2024, a decrease of $6.3 million, or 36.2%. The decrease was primarily due to higher foreign currency loss, an increase in professional service fees, and an increase in information technology maintenance costs for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Segment EBITDA for Europe/Asia was $26.1 million for the nine months ended September 30, 2025 compared to $39.9 million in the nine months ended September 30, 2024, a decrease of $13.8 million, or 34.6%. The decrease was primarily due to a decrease in non-operating income, primarily due to patent litigation settlement proceeds recorded in the nine months ended September 30, 2024 that did not reoccur in the nine months ended September 30, 2025. Additionally, costs of sales associated with production and fulfillment, excluding depreciation, increased for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, partially offset by increased foreign currency gains for the nine months ended September 30, 2025.

Reconciliation of GAAP to Non-GAAP Measures

As noted above, we believe that in order to better understand the performance of the Company, providing non-GAAP financial measures to users of our financial information is helpful. We believe presentation of these non-GAAP measures is useful because they are many of the key measures that allow management to evaluate more effectively our operating performance and compare the results of our operations from period to period and against peers without regard to financing methods or capital structure. Management does not consider these non-GAAP measures in isolation or as an alternative to similar financial measures determined in accordance with GAAP. The computations of EBITDA, AEBITDA and Constant Currency (Non-GAAP) % Change may not be comparable to other similarly titled measures of other companies. These non-GAAP financial measures should not be considered as alternatives to, or more meaningful than, measures of financial performance as determined in accordance with GAAP or as indicators of operating performance.

The following tables and related notes reconcile certain non-GAAP measures, including the non-GAAP constant currency measures, to GAAP information presented in this Quarterly Report for the three and nine months ended September 30, 2025 and 2024:

(see subsequent footnotes)

(1) Reconciliations of EBITDA and AEBITDA for each period presented are to net loss, the nearest GAAP equivalent.

(2) Adjustments are related to non-cash unusual or infrequent costs such as: effects of non-cash foreign currency remeasurement or adjustment; impairment of returned machines; costs associated with the evaluation of acquisitions; costs associated with executive severance; costs associated with restructuring actions such as plant rationalization or realignment, reorganization, and reductions in force; costs associated with the implementation of the global ERP system; and other items deemed by management to be unusual, infrequent, or non-recurring.

(3) Represents amortization of capitalized costs primarily related to the implementation of the global ERP system, which are included in SG&A.

(4) Third-party professional services and consulting fees related to post-implementation system remediation.

(5) In the third quarter of 2024, Other adjustments represents primarily non-recurring costs incurred from the outsourcing of paper conversion services and other insignificant items.

(6) The Constant Currency (Non-GAAP) % Change excludes the impact of foreign currency translation effects when comparing to the prior year. In calculating the Constant Currency (Non-GAAP) % Change, the current year results are translated at the average exchange rate for the prior year period, which in this case was 1 Euro to 1.0985 USD. Refer to further discussion in “Non-GAAP Measures.”

(see subsequent footnotes)

(1) Reconciliations of EBITDA and AEBITDA for each period presented are to net loss, the nearest GAAP equivalent.

(2) Adjustments are related to non-cash unusual or infrequent costs such as: effects of non-cash foreign currency remeasurement or adjustment; impairment of returned machines; costs associated with the evaluation of acquisitions; costs associated with executive severance; costs associated with restructuring actions such as plant rationalization or realignment, reorganization, and reductions in force; costs associated with the implementation of the global ERP system; and other items deemed by management to be unusual, infrequent, or non-recurring.

(3) Represents amortization of capitalized costs primarily related to the implementation of the global ERP system, which are included in SG&A.

(4) Third-party professional services and consulting fees related to post-implementation system remediation.

(5) In the nine months ended September 30, 2025, Other adjustments includes non-recurring warehouse and transitory costs incurred related to conversion services, non-recurring excess above market procurement costs, and other insignificant items. In the nine months ended September 30, 2024, Other adjustments represents primarily non-recurring costs incurred from the outsourcing of paper conversion services, legal expenses and fees related to the Company’s patent litigation which was settled in the second quarter of 2024, and other insignificant items.

(6) The Constant Currency (Non-GAAP) % Change excludes the impact of foreign currency translation effects when comparing to the prior year. In calculating the Constant Currency (Non-GAAP) % Change, the current year results are translated at the average exchange rate for the prior year period, which in this case was 1 Euro to 1.0870 USD. Refer to further discussion in “Non-GAAP Measures.”

Liquidity and Capital Resources

We evaluate liquidity in terms of cash flows from operations and other sources and the sufficiency of such cash flows to fund our operating, investing and financing activities. We believe that our $49.9 million in cash and cash equivalents as of September 30, 2025 and cash flows from operations, together with borrowing capacity under the revolving portion of our senior secured credit facilities, will provide us with sufficient resources to cover our current requirements.

Our main liquidity needs relate to capital expenditures and expenses for the production and maintenance of PPS systems placed at end-user facilities, working capital, including the purchase of paper raw materials, and payments of principal and interest on our outstanding debt. Our AS and APS businesses are for the sale of capital goods and we do not require significant capital expenditures for production equipment to support growth. We expect our capital expenditures to increase as we continue to grow our business, expand our manufacturing footprint, and upgrade our existing systems and facilities. We continue to evaluate our inventory requirements and adjust according to our volume forecasts. Our future capital requirements and the adequacy of available funds will depend on many factors, and if we are unable to obtain needed additional funds, we may have to reduce our operating costs or incur additional debt, which could impair our growth prospects and/or otherwise negatively impact our business. Further, volatility in the equity and credit markets from macroeconomic factors could make obtaining new equity or debt financing more difficult or expensive.

Including finance lease liabilities and financing arrangements and excluding deferred financing costs, we had $412.0 million in debt, $5.9 million of which was classified as short-term, as of September 30, 2025, compared to $415.7 million in debt, $5.6 million of which was classified as short-term, as of December 31, 2024. At September 30, 2025, we did not have amounts outstanding under our $50.0 million revolving credit facility, and we had no borrowings under such facility through October 30, 2025. No mandatory prepayments were required under our Facilities and the Company was in compliance with all debt covenants as of September 30, 2025.

Debt Profile

The material terms of the Facilities are summarized in Note 7 — Long-Term Debt to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report and under the heading “Liquidity and Capital Resources — Debt Profile” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2024 10-K. The Term Facility matures in December 2031 and the Revolving Facility matures in December 2029. Borrowings under the Facilities, at our option, bear interest at either (1) the secured overnight financing rate (“SOFR”) plus 4.50% or (2) the base rate plus 3.50%, in each case assuming a First Lien Leverage Ratio, as defined in the 2024 Credit Agreement, of greater than 3.60:1.00, and subject to a leverage-based step-down to 4.25% for SOFR borrowings and 3.25% for base rate borrowings, respectively. The interest rate for the Term Facility as of September 30, 2025 and December 31, 2024, was 8.80%.

The Revolving Facility includes borrowing capacity available for standby letters of credit of up to $50.0 million. Any issuance of letters of credit will reduce the amount available under the Revolving Facility. As of September 30, 2025, we had $5.9 million committed to outstanding letters of credit, leaving net availability of $44.1 million under the Revolving Facility.

The Facilities provide the Company with the option to increase commitments under the Facilities in an aggregate amount not to exceed the greater of $85.0 million and 100% of Consolidated Adjusted EBITDA (as defined in the 2024 Credit Agreement), plus certain voluntary prepayments (and in the case of the Revolving Facility, to the extent such voluntary prepayments are accompanied by permanent commitment reductions under the Revolving Facility), plus unlimited amounts subject to the relevant net leverage ratio tests and certain other conditions.

The obligations of (i) Ranpak Corp. (the “U.S. Borrower”) under the 2024 Credit Facilities and certain of its obligations under hedging arrangements and cash management arrangements are guaranteed by Ranger Pledgor LLC (“Holdings”), a wholly owned subsidiary of Ranpak Holdings Corp., and each existing and subsequently acquired or organized direct or indirect wholly-owned U.S.-organized restricted subsidiary of the U.S. Borrower (together with Holdings, the “ U.S. Guarantors”) and (ii) Ranpak B.V. (the “Dutch Borrower”) under the 2024 Credit Facilities are unconditionally guaranteed by the U.S. Borrower, the U.S. Guarantors and each existing and subsequently acquired or organized direct or indirect wholly-owned Dutch-organized restricted subsidiary of the U.S. Borrower (the “Dutch Guarantors”, and together with the U.S. Guarantors, the “Guarantors” or the “Borrowers”), in each case, other than certain excluded subsidiaries. The 2024 Credit Facilities are secured by (i) a first priority pledge of the equity interests of the Borrowers and of each direct, wholly-owned restricted subsidiary of any Borrower or any Guarantor and (ii) a first priority security interest in substantially all of the assets of the Borrowers and the Guarantors (in each case, subject to customary exceptions), provided that obligations of the U.S. Borrower and U.S. Guarantors under the 2024 Credit Facilities were not secured by assets of the Dutch Borrower or any Dutch Guarantor.

Cash Flows

The following table sets forth our summary cash flow information for the periods indicated:

Cash Flows Provided by Operating Activities

Net cash provided by operating activities was $3.6 million in the nine months ended September 30, 2025. Cash provided by operating activities was $34.9 million in the nine months ended September 30, 2024. The changes in operating cash flows are largely due to the increased net loss, primarily due to the non-recurring patent litigation settlement of $16.1 million in the second quarter of 2024. Non-cash adjustments decreased $2.9 million due primarily to the changes in unrealized (gain) loss on strategic investments, foreign currency gain, and deferred income taxes, partially offset by the non-recurring gain on sale of patents in the second quarter of 2024 and the current year provision for warrants. Working capital adjustments also decreased for the current period compared with prior year, primarily due to changes in accrued liabilities and inventory builds as of the third quarter of 2025.

Cash Flows Used in Investing Activities

Net cash used in investing activities was $27.6 million and $24.7 million in the nine months ended September 30, 2025 and 2024, respectively, and reflects cash used for production of converter equipment, purchases of machinery and equipment and cash paid for investments in Pickle. Net cash used in investing activities in the nine months ended September 30, 2024 also included $5.4 million in proceeds from sale of patents.

Cash Flows Used in Financing Activities

Net cash used in financing activities was $5.3 million and $2.3 million in the nine months ended September 30, 2025 and 2024, respectively, and reflects principal payments on our term loans, payments on finance lease liabilities, tax payments for withholdings on stock compensation, and payments on financing arrangements, partially offset by proceeds from our hedging instruments and our financing arrangements.

Contractual Obligations and Other Commitments

We have cash obligations under our leases for facilities and automobiles, under our financing arrangements, which are primarily related to equipment, and under our Term Facility, which are described in more detail in Note 12 — Leases and Note 7 — Long-Term Debt in the notes to our unaudited condensed consolidated financial statements. We have various contractual obligations and commercial commitments that are recorded as liabilities in our unaudited condensed consolidated financial statements.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2025.

Critical Accounting Policies and Estimates

Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which often require the judgment of management in the selection and application of certain accounting principles and methods. All of our significant accounting policies, including certain critical accounting policies and estimates, are disclosed in our 2024 10-K and in Note 2 — Basis of Presentation and Summary of Significant Accounting Policies in the notes to our unaudited condensed consolidated financial statements.

Recently Issued and Adopted Accounting Pronouncements

For recently issued and adopted accounting pronouncements, see Note 2 — Basis of Presentation and Summary of Significant Accounting Policies to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

Interest Rate Risk

Changes in interest rates affect the amount of interest income we earn on cash, cash equivalents and short-term investments and the amount of interest expense we pay on borrowings under the floating rate portions of our Facilities. A hypothetical 100 basis point increase or decrease in the applicable base interest rates under our Facilities would have resulted in a $3.0 million impact on our cash interest expense for the nine months ended September 30, 2025.

Refer to Note 7 —Long-Term Debt to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information.

Foreign Currency Exchange Rate Risk

We are exposed to foreign currency exchange risk related to our transactions and subsidiaries’ balances that are denominated in currencies other than USD, our reporting currency. See “Effect of Currency Fluctuations” in Item 2 previously for more information about our foreign currency exchange rate exposure. We seek to naturally hedge our foreign exchange transaction exposure by matching the transaction currencies for our cash inflows and outflows and maintaining access to credit in the principal currencies in which we conduct business. Additionally, we hedge some of our exposure to foreign currency translation with cross-currency swaps. Refer to Note 8 — Derivative Instruments to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information.

For the nine months ended September 30, 2025, net revenue denominated in currencies other than USD amounted to $153.5 million or 54% of our net revenue for the period. Substantially all of this amount was denominated in Euro. A 10% increase or decrease in the value of the Euro to the USD would have caused our reported net revenue for the nine months ended September 30, 2025 to increase or decrease by approximately $15.3 million.

Commodity Price Risk

While our business is significantly impacted by price fluctuations related to the purchase, production and sale of paper products, we are typically not directly exposed to market price fluctuations in paper purchase or sale prices as we historically have negotiated prices with suppliers on an annual basis and negotiate prices with distributors reflecting competitive market terms. Our strategy has generally been to obtain competitive prices for our products and services and allow operating results to reflect market price movements dictated by supply and demand. However, due to global inflation and other macroeconomic factors, we may be subject to significantly more commodity price volatility than we have historically experienced.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that material information required to be disclosed in our reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required financial disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

As of the end of the period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 of the Exchange Act. Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective, due to the material weaknesses in internal control over financial reporting that are described in the 2024 10-K.

Notwithstanding such material weaknesses in internal control over financial reporting, our management, including our CEO and CFO, has concluded that our consolidated financial statements present fairly, in all material respects, our financial position, results of our operations and our cash flows for the periods presented in this Quarterly Report, in conformity with U.S. generally accepted accounting principles.

Remediation Plans

As previously described in Part II – Item 9A – Controls and Procedures of the 2024 10-K, we continue to implement a remediation plan to address the material weaknesses mentioned above. The deficiencies will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

The Company expects that we will have remediated certain material weaknesses as described in the 2024 10-K by the end of calendar year 2025. For management to consider a material weakness remediated the related controls are required to operate effectively as anticipated for a minimum period and we may not be able to demonstrate through testing that these controls have been operating effectively for a sufficient period of time to achieve remediation. Progress has been made against management’s plan to remediate these material weaknesses. As the Company is executing its remediation plan in 2025, changes to the timing of remediation activities and delays may be experienced that could delay when the material weakness is considered remediated. Controls may be functioning as expected by the end of 2025 but may not function in their final state for a minimum period in 2025. As part of its remediation plan, management expects to put mitigating controls in place to minimize risk associated with any unresolved material weaknesses.

Changes in Internal Control Over Financial Reporting

In response to the material weaknesses described in the 2024 10-K, the Company reviewed the design of its controls and began remediation activities to alleviate the noted control deficiencies. Other than these items, there was no change in the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2025, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.