SW · Q4 2025 Earnings

Cautious

Smurfit Westrock

Reported February 11, 2026

30-second summary

30-second take: Q4 revenue of $7.58B (+0.5% YoY) and adjusted EBITDA of $1,172M (15.5% margin) closed out FY25 at $4.939B of adjusted EBITDA — inside the $4.9–5.1B range guided in October, toward the low-to-mid end. FY26 adjusted EBITDA is guided to $5.0–5.3B (midpoint $5.15B, ~+4% YoY vs FY25 actual), consistent with management's "better industry operating environment" framing. The FY26 capex guide of $2.4–2.5B previously disclosed last quarter was not reiterated in this release. North America revenue fell 3.8% YoY and EBITDA margin compressed to 14.7%, absorbing the ~$85M of Q4 downtime management quantified on the call (FY downtime $220M).

Headline numbers

EPS

Q4 FY2025

$0.34

Revenue

Q4 FY2025

$7.58B

+0.5% YoY

Gross margin

Q4 FY2025

18.2%

Free cash flow

Q4 FY2025

$0.61B

Operating margin

Q4 FY2025

5.1%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$7.58B	+0.5%	$8.00B	-5.3%
EPS	$0.34	—	$0.58	-41.4%
Gross margin	18.2%	—	19.6%	-140bps
Operating margin	5.1%	—	6.6%	-150bps
Free cash flow	$0.61B	—	$0.52B	+17.0%

Guidance

Full-year FY2026 Adjusted EBITDA guided $5.0–$5.3B (broadly flat vs FY2025 reported $5.164B), signaling cautious outlook despite improved industry environment; Q1 FY2026 guided $1.1–$1.2B.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Adjusted EBITDA	Q4 FY2025	—	$1,172 million	no prior Q4 guidance provided	Beat

New guidance

Metric	Period	Guide	YoY
Adjusted EBITDA	Q1 FY2026	$1.1 billion to $1.2 billion	—
Adjusted EBITDA	FY2026	$5.0 billion to $5.3 billion	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EBITDA	FY2025	$4.9 billion to $5.1 billion	$5.164 billion	+$0.064–$0.264 billion above prior range	Raised
Capital Expenditures	FY2026	$2.4 to $2.5 billion	Withdrawn — no replacement	—	Withdrawn

Segment KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
North America	$4.351B	-3.8%
Europe, MEA and APAC	$2.692B	+7.1%
LATAM	$0.537B	+6.3%
North America Adjusted EBITDA Margin	14.7%	—
EMEA Adjusted EBITDA Margin	16.2%	—
LATAM Adjusted EBITDA Margin	24.5%	—

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
Adjusted EBITDA	$1,172 million
Adjusted EBITDA Margin	15.5%
Net Cash from Operating Activities	$1,195 million
Adjusted Free Cash Flow	$679 million
Quarterly Dividend per Share	$0.4523

Management tone

Q2 anchor → Q3 anchor → Q4 anchor: "Integration offense" → "Structural progress, cyclical caution" → "FY25 delivered in-range, FY26 frames a 'better operating environment'"

The synergy quantification deferred from Q3 was not delivered as a hard incremental number in the press release. The Q4 release contains language about overachieving the original $400M synergy target ("well overachieved... sets us up to be a much more efficient and leaner organisation") but does not place a specific incremental run-rate on the additional program. On the call, Ken indicated remaining program synergies coming through in 2026 are "in the range of 40 to 50 million." The medium-term plan presentation accompanying the release is the venue where dimensioning should be expected.

The "better industry operating environment" framing is consistent with the FY26 guide. Management's qualitative posture has clearly improved from Q3's downtime-focused tone — explicit language about confidence in 2026 and a generally better operating environment. The FY26 EBITDA range of $5.0–5.3B with a midpoint of $5.15B implies ~+4% growth on FY25's $4.939B actual, which aligns with that framing without baking in pricing momentum (which Ken explicitly stated is not in the guide).

Capital allocation shifted in disclosure — buyback capacity from 2027 onwards introduced. "From 2027 onwards, we expect to have capacity to undertake share repurchases" is a new addition relative to Q3, alongside the leverage progression to 2.6x toward the 2.0x target and the Fitch upgrade to BBB+. This is a forward-leaning capital-return signal that complements the FY26 EBITDA guide — management is telling the market the cash flow story strengthens into 2027.

The non-reiterated FY26 capex guide is the most informative non-disclosure. Last quarter management defended $2.4–2.5B of FY26 capex against direct Wells Fargo questioning about strategic pivot to cash flow. That figure does not appear in this release despite forward EBITDA being disclosed. Either the number is unchanged and being held for the February medium-term plan event (benign), or it is being revisited (material). The absence creates an information asymmetry the print does not resolve.

Recurring themes management leaned on this quarter:

North American value creation through operational excellence and customer-centric strategyMargin expansion via cost discipline, innovation, and portfolio optimization—not pricing dependentConsumer packaging integration driving cross-selling and customer valueDisciplined capital allocation balancing growth investment with shareholder returnsOwner-operator culture and performance-led accountability driving resultsGlobal integrated platform enabling cost leverage and best-practice transfer

Risks management surfaced:

Execution risk on pipeline conversion and customer landing of 1.2B+ square meters of new businessEconomic volatility and macro headwinds impacting volume and pricing realizationPaper market softness in Europe requiring continued portfolio optimization and potential closuresWeather disruptions in Europe and US continuing to impact near-term logistics and deliveryCompetition from incoming capacity (Klabin PM28) and Asian paper entering Latin America markets

Answers to last quarter's watch list

FY25 adjusted EBITDA landing inside the $4.9–5.1B range, and where in the range. FY25 adjusted EBITDA came in at $4.939B — inside the guided range, toward the low-to-mid end. Status: Resolved in-range.

February deep-dive on the "additional $400M+" synergy program. The Q4 release acknowledges overachievement of the original $400M target but does not place a specific incremental run-rate number on the table in the press release itself. Ken indicated ~$40–50M of remaining program synergies flow through 2026. Further dimensioning is expected in the accompanying medium-term plan presentation. Status: Partially resolved.

North America EBITDA margin holding above 17%. Margin printed 14.7% in Q4, absorbing the ~$85M of concentrated downtime management quantified on the call. The cyclical drag landed as flagged in October. Status: Resolved — below the bar.

Inventory progression toward the 8–9% of sales Smurfit benchmark. Not explicitly addressed as a percent-of-sales metric. With Q4 FCF of $612M and adjusted FCF of $679M, working capital release likely contributed (accounts receivable change of +$413M and inventories +$94M in the cash flow statement support this), but the company did not quantify inventory as a percent of sales.

Continue monitoring

Whether 2026 capex of $2.4–2.5B is the steady-state level or a step-down begins in 2027. The FY26 capex range was not reiterated in this release. Combined with the explicit 2027 buyback-capacity language, the absence hints at either a deferral to the February event or an active revisit.

Not resolved

Europe Q1/Q2 2026 volume and pricing data points against the Q2/Q3 2026 pricing inflection thesis. Q4 EMEA & APAC revenue grew 7.1% YoY and margin printed 16.2%. No pricing-cycle data points yet — the inflection remains a 2026 question.

Continue monitoring

What to watch into next quarter

The February medium-term plan delivery of the "additional $400M+" synergy quantification beyond the $40–50M of remaining 2026 program synergies Ken cited. A specific run-rate, milestone schedule, and category bridge is the minimum required for the bull case to retain credibility.

Whether FY26 capex of $2.4–2.5B is reiterated, raised, or stepped down. The omission from this print is the most material non-disclosure; clarity on capital intensity directly drives 2027 FCF and buyback math.

Q1 FY26 actual landing inside the $1.1–1.2B guide. A print at the high end would suggest the "better operating environment" language is the leading indicator and the FY26 EBITDA midpoint is conservative. A print at the low end and the +4% FY26 guide tightens.

North America EBITDA margin recovery from Q4's 14.7%. With Q4 downtime now behind, Q1 margin progression is the key tell on whether the value-over-volume churn is translating to mix gains as Laurent described.

Whether buyback capacity from 2027 onwards gets paired with a specific authorization size or stays directional. The capital-return signal needs dimensioning to move from rhetoric to thesis input.

Leverage progression from 2.6x toward 2.0x target through 1H FY26. Pace of deleveraging shapes both the capex flexibility question and the buyback-from-2027 timeline.

Sources

Smurfit Westrock Q4 2025 earnings press release, filed via SEC, February 11, 2026 — https://www.sec.gov/Archives/edgar/data/2005951/000110465926012986/tm265780d1_ex99-1.htm
Smurfit Westrock Q4 2025 earnings call prepared remarks, February 11, 2026 — for downtime quantification ($85M Q4, $220M FY) and 2026 cost/synergy bridge components
Smurfit Westrock Q3 2025 earnings brief (Tapebrief, October 29, 2025) — for prior FY25 guidance and FY26 capex guide
Smurfit Westrock Q2 2025 earnings brief (Tapebrief, July 30, 2025) — for original $400M synergy target framing

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