Operator: Hello, everyone. Thank you for joining us, and welcome to Ranpak Holdings third quarter 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the call over to Sara Horvath, Chief Legal and HR Officer. Please go ahead.
Sara Horvath: Thank you, and good morning, everyone. Before we begin, I would like to remind you that we will discuss forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those forward-looking statements as a result of various factors, including those discussed in our press release and the risk factors identified in our Form 10-K and our other filings with the SEC.
Sara Horvath: Some of the statements in responses to your questions in this conference call may include forward-looking statements that are subject to future events and uncertainties that could cause our actual results to differ materially from these statements. Ranpak assumes no obligation and does not intend to update any such forward-looking statements. You should not place undue reliance on these forward-looking statements, all of which speak to the company only as of today.
Sara Horvath: The earnings release we issued this morning and the presentation for today's call are posted on the investor relations section of our website. A copy of the release has been included in a Form 8-K that we furnished to the SEC before this call. We will also make a replay of this conference call available via webcast on the company website.
Sara Horvath: For financial information that is presented on a non-GAAP basis, we have included reconciliations to the comparable GAAP information. Please refer to the table and slide presentation accompanying today's earnings release. Lastly, we will be filing our 10-Q with the SEC for the period ending 30 September 2026. The 10-Q will be available through the SEC or on the investor relations section of our website. With me today, I have Omar Asali, our Chairman and CEO, and Bill Drew, our CFO.
Sara Horvath: Omar will summarize our third quarter results and market conditions, and Bill will provide additional detail on the financial results before we open up the call for questions. With that, I will turn the call over to Omar.
Omar Asali: Thank you, Sara. Good morning, everyone, and thank you for joining us today. We are pleased to continue to grow top line and adjusted EBITDA in Q3 and on a year-to-date basis while operating in a volatile macro environment. Our automation product line delivered another quarter of strong growth, with revenue increasing 26.9% year over year on a constant currency basis and excluding the impact of Fern.
Omar Asali: We continue to build strong momentum in automation equipment sales in both North America and Europe and are pleased it is becoming the growth engine we expected. We continue to expect to achieve $60 million in net revenue in this area for 2026, which would be 50% growth versus 2025. The pipeline is strong, and based on what we are seeing, we expect strong growth to continue next year.
Omar Asali: Our automation product line is serving as a differentiator for us in our discussions with customers and as a diversified revenue stream that is less correlated to the short-term macro sentiment relative to the PPS business. As anticipated, we experienced improved performance in the distribution channel in North America in Q3 as the challenging H1 comparison normalized and our new product initiatives in cushioning, void fill, and wrapping are gaining traction.
Omar Asali: Cushioning, in particular in North America, had a really strong quarter as our Guardian 24 is experiencing strong adoption, and we are having success going against foam-in-place. Channel performance drove North America volumes up 1.8%, while Europe and APAC were softer after a strong Q2, leading overall volumes to be lower by 2.5%.
Omar Asali: Europe, in particular, was an outperformer in Q2 but gave some of that back this quarter as it looks like the channel worked through some pre-buy relative to the surcharge and lowered inventory levels to reflect lower lead times in EMEA and in APAC as our localization goals are being achieved. Now, more on to our results.
Omar Asali: Consolidated net revenue increased 3.4% on a constant currency basis for the quarter or up 3.8% excluding the impact of Fern. Driven by 23.5% growth in automation equipment sales on a constant currency basis. Currency was a headwind in the quarter, which detracted 1.1 percentage points on a reported basis in the quarter, bringing reported top-line growth to 2.3% for the quarter and 8.9% on a year-to-date basis.
Omar Asali: Adjusted EBITDA increased $1.1 million to $22.5 million on a reported basis and was up 6.1% in constant currency terms. Excluding the impact of warrants, adjusted EBITDA increased 7.7% on a constant currency basis and roughly in line with growth in gross profit on a constant currency basis. On a year-to-date basis, adjusted EBITDA increased $5.3 million to $60.5 million on a reported basis and was up 6% in constant currency terms.
Omar Asali: Excluding the impact of warrants, adjusted EBITDA increased 8.8% on a constant currency basis. Now moving to the market environment and how Ranpak is positioned. The macro backdrop through Q3 took a step back as volatility in the energy markets and rates increased markedly. Oil prices climbed back above $100 a barrel as the conflict in the Middle East re-escalated. Refinery shortages are driving diesel costs to record highs.
Omar Asali: Consumer confidence is at multi-decade lows, and the Fed raised rates in September with expectations of more hikes on the way. Against that backdrop, I would say demand has held up reasonably well. Although Q3 saw some softness outside of North America. Customers are cautious given the pressure higher energy costs are putting on both their input costs and consumer spending.
Omar Asali: Most folks we talk to are expecting a peak season similar to last year, and we are still seeing strong demand for automation solutions. In North America, the paper market continues to tighten as producers try to push increases, which we are passing on to protect our margin profile. In Europe, Dutch natural gas is now above €90 per megawatt hour and driving paper pricing higher. But there we have implemented a surcharge, which we adjust as needed, given the volatility in energy to protect our gross profit.
Omar Asali: As we said last quarter, we believe the surcharge is temporary, and we will remove it as energy costs normalize. Conditions evolve rapidly, but overall, we believe we are managing the environment very well at Ranpak through our pricing actions and the momentum we are seeing in automation. With energy costs climbing again and rates moving higher, our customers are scrutinizing every dollar of packaging spend, which we believe plays to our value proposition of lowering their total cost of packaging.
Omar Asali: Internally, we hold ourselves to the same standard, and this quarter, 110 bps gross margin improvement and 10.5% reduction in constant currency SG&A, excluding the RSU expense, show that discipline is paying off. We have enhanced our operational talent and capabilities over the past year and are finding opportunities to enhance our profile through the implementation of operational and continuous improvement projects to drive our KPIs.
Omar Asali: The team is invigorated by the early progress we are seeing and excited about further improvements we are pursuing. Procurement, in particular, is an area where we see upside as we can utilize our increased scale and global reach to find efficiencies that reduce our material costs and time to build our equipment.
Omar Asali: Overall, I believe we are on the path to a much more efficient platform in 2027. Beyond the near term, our automation and cold chain product lines are where we are concentrating our investment, and we believe they will be the foundation of our growth in the years ahead. While the macro backdrop is somewhat uncertain, we believe Ranpak is well-positioned heading into peak season and 2027. With that, here's Bill with more information on the quarter.
Bill Drew: Thank you, Omar. In the deck, you'll see a summary of some of our key performance indicators. We'll also be filing our 10-Q, which provides further information on Ranpak's operating results. Overall net revenue for the company in the third quarter increased 3.4% year over year on a constant currency basis or an increase of 3.8% excluding the impact of warrants, driven by strong momentum in automation and volume growth in the distribution channel in North America.
Bill Drew: Our North America revenues increased 6.9% in the quarter or up 7.9% excluding the impact of warrants, driven by more than 47% growth in automation excluding warrants, while PPS also contributed positively to the top line as the channel comparisons normalized and returned to growth as expected with strong performance in cushioning.
Bill Drew: Traction with automation in North America also continues to build as we land new logos in the region, so we remain excited about the outlook there. In Europe and APAC, net revenue increased 0.5% on a constant currency basis, driven by 18.1% growth in automation on a constant currency basis, as well as pricing actions. Partially offset by 4.9% volume decline in PPS as EMEA channel customers worked down inventory and APAC adjusted shorter lead times and lower e-commerce sales.
Bill Drew: Gross profit increased 7.3% on a constant currency basis in the quarter and would have increased 8.2%, excluding the $1.2 million non-cash provision for warrants. Our margin initiatives are delivering, and we are pleased to report 110 bps improvement in gross margin versus Q3 of last year and 280 bps improvement sequentially from Q2.
Bill Drew: In North America, PPS, where margins have been most pressured, we made continued progress through our efficiency gains and improved mix, enhancing our margin more than 290 bps excluding depreciation versus the prior year. In EMEA, there was 90 bps of pressure ex depreciation due to rising COGS in PPS and greater contribution from automation.
Bill Drew: Given how much energy prices have increased, we are most focused on protecting gross profit dollars there through the surcharge in the near term. We do expect some margin pressure in the region at these levels. Overall, though, we have a number of actions in place which we believe are making us more efficient and improving our profile, and we expect to make some further progress into 2027.
Bill Drew: SG&A, excluding RSU expense, was down 10.5% on a constant currency basis versus the prior year, reflecting the cost actions we have taken across the business and fewer one-time expenses. Consistent with what we shared previously, we continue to prioritize cost discipline and margin expansion. We are focused on keeping spend lean and leveraging our fixed overhead as we grow.
Bill Drew: As Omar mentioned, adjusted EBITDA increased 6.1% year-over-year on a constant currency basis, or up 7.7% excluding the impact of warrants, as greater sales and gross profit flowed through with lower SG&A. Q3 was positive from an adjusted EBITDA perspective in our automation product line, and we expect Q4 will be as well as we are scaling towards overall profitability and $60 million in revenue this year. The constant currency calculation is based on a rate of 1.1688, which was last year's average rate for the quarter.
Bill Drew: As mentioned last quarter, beginning in Q3 of last year, there was considerable movement in the euro. This quarter, we had roughly a 1% headwind on our reported results. For the fourth quarter, if rates stay where they are, it would be a roughly 2% headwind. Please note that for the remainder of the year.
Bill Drew: On a year-to-date basis, we have achieved net revenue growth of 8.9%, or 6.6% on a constant currency basis, inclusive of a $4.6 million provision for warrants. Adjusted EBITDA increased $5.3 million, or 9.6% to $60.5 million and was up 6% on a constant currency basis. Excluding the impact of warrants, adjusted EBITDA increased 8.8% on a constant currency basis year to date. Moving to the balance sheet and liquidity.
Bill Drew: We completed Q3 2026 with a strong liquidity position, improving our cash balance in the quarter by more than $10 million from Q2 2026, and finishing with a cash balance of $53.4 million and no drawings on our revolving credit facility. This brings our reported net leverage down 0.4 turns from the end of Q1 to 4.3 times on an LTM basis.
Bill Drew: We do expect cash to continue to improve in the fourth quarter due to seasonality and our ability to free up some working capital. Our goal remains to achieve net leverage of between 2.5 times and 3.0 times, which we believe we can do over the next 24 months. Our CapEx for the quarter was $10.3 million, which is up $2.5 million from the prior year.
Bill Drew: We remain disciplined on spend and have reduced converter spend versus prior year, while investing in further production capacity to drive growth in key products in upcoming years in areas like cold chain and to serve growth areas related to our enterprise customers.
Bill Drew: Our fleet optimization initiatives are driving the improvements in our converter spend. Our machine population was lower year-over-year, but increased from Q2 as we are deploying new converters, but also focused on getting back converters we believe are underutilized so we can put them at more productive locations. With that, I will turn to Omar.
Omar Asali: Thank you, Bill. Before I close, I want to touch on a few of our key initiatives and add some color on the rest of the year and into 2027. This quarter and throughout this year, we made real progress on our priorities, scaling automation towards profitability, executing on cost out and efficiencies to improve our margin profile, reducing our exposure to lower margin business, and positioning ourselves to capitalize on the need for sustainable cold chain solutions.
Omar Asali: Our strategy has been consistent. Assemble the most complete end-of-line automation offering in the industry, and surround it with partners who play critical roles in how goods move through the warehouse. We believe the more places Ranpak is present in the warehouse, the more value we can create.
Omar Asali: Our customers run more efficiently, and we earn deeper, longer lasting relationships with some of the most sophisticated operators in the world, which is showing up in our automation results this year. In automation, we remain on track to hit roughly $60 million in revenue this year, which was my largest goal coming into 2026. Automation has real momentum in both North America and Europe, and I believe it will be a real growth driver for Ranpak going forward.
Omar Asali: As Bill mentioned, we have line of sight to automation breaking even on an adjusted EBITDA basis, which we expect this year, and positive contribution in 2027. We also continue to add partners to our ecosystem, including our recent global strategic partnership announcement with Element Logic, which broadens what we can offer our enterprise customers.
Omar Asali: This partnership formalizes and builds on existing collaboration between the two companies, combining Element Logic's expertise in warehouse automation, software, and system integration with Ranpak's specialist capabilities in right-sizing, box forming, closing, computer vision, and paper-based product protection. Element Logic acts as both a system integrator and trusted automation partner, designing, implementing, and supporting end-to-end warehouse solutions that integrate Ranpak packaging automation technologies into our customers' operations.
Omar Asali: As a result of this partnership, customers gain a more integrated outbound fulfillment flow. Element Logic can design Ranpak's packaging automation into the process downstream of picking and around packing stations rather than treating packaging as a standalone add-on. Together, the companies can connect warehouse automation with specialist packaging expertise to improve cost efficiency, scalability, and sustainability while supporting customers as they comply with PPWR regulations.
Omar Asali: In North America, we have been tuning the PPS portfolio to improve the margin profile. Given the warrant relationship, we are being mindful of where and how we participate in the consumables area with our large enterprise customers.
Omar Asali: As we signaled last quarter, we are now doing less of the lower margin business where we have been providing warrants, bringing it to a level where we are comfortable with, and you can see the benefits in our improved mix and margins this quarter. With our largest customers, we are positioning Ranpak where we see the largest and most valuable opportunities, and dedicating our resources to providing these value-added solutions that can grow over the next number of years.
Omar Asali: We are also adding distribution partners in North America, as our enhanced portfolio now includes differentiated automation and cold chain solutions, as well as best-in-class paper products, is making Ranpak a partner more distributors want to work with. From a top-line perspective, we believe there will be a traditional step up from Q3 to Q4 due to seasonality and continue to expect to meet our prior guidance for the year.
Omar Asali: Looking to 2027, the additional cold chain capacity we discussed last quarter is on track to come online in early 2027, positioning us to capitalize on the growing need for sustainable cold chain solutions and believe our Climaliner Plus will be a new market standard. I said it last time, but I will reiterate, sustainable cold chain is one of the great opportunities out there right now, and like automation, it gives us another scalable revenue stream.
Omar Asali: I believe these two areas will be top-line drivers for us in 2027. Overall, we anticipate having three key areas of focus at Ranpak: PPS, automation, and cold chain. I am pleased with how we are executing on our key initiatives and the path we are on. Despite the challenging macro backdrop, the overall micro backdrop is okay. We remain focused on growth, margin enhancement and deleveraging, and I believe everything we are doing right now moves us in that direction.
Omar Asali: We grew our cash balance by more than $10 million this quarter, have no drawings on our revolver, and remain committed to reaching net leverage of 2.5 to 3 turns over the next 24 months. I want to thank our team for their hard work and commitment through a demanding year, especially as we head into peak season. With that, we would like to open the line for questions. Operator?
Operator: We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. Please limit yourself to 1 question and 1 follow-up. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from the line of Greg Palm with Craig-Hallum. Your line is now open. Please go ahead.
Greg Palm: Yeah, thanks. Good morning. Curious, just in light of everything going on, behavior of customers, you seen any difference, whether that's on trade downs and just to be clear on the weakness in EMEA region. Is any of that related to surcharges? Was there a maybe a pull forward in Q2 ahead of that? I guess it's more of a multi-part question, but I would probably argue that the environment's gotten maybe a little or a lot more volatile like in the last month. So what are you seeing real time quarter to date in October?
Omar Asali: Yeah. Good morning, Greg. It's Omar. Maybe I'll start then I'll have Bill chime in. So let's take it geographically. In North America, we continue to see and expect a pretty strong peak season, despite the volatility. Obviously, we're living through that volatility from a macro standpoint with freight and diesel pricing. But it looks like the expectations for the holiday season are still very decent and very robust.
Omar Asali: That's the behavior that we're seeing from our customers. Industrial activity, we're doing better, but I think that's due to our new product innovation, in particular the Guardian 24, that I mentioned in the call, which is a faster converter, providing a smaller footprint and a better solution out there, and frankly compares very favorably against foam. So that's what we're seeing on the PPS side.
Omar Asali: In Europe, I would say with the surcharge, it looks like we had some of our channel partners pull through or pull forward some of the product into Q2, so that had some impact, in Q3. What we're seeing in Europe, Greg, is we're seeing that we're winning at new accounts. We're seeing some decent trial and close activity.
Omar Asali: But just the macro environment, we're seeing a bunch of existing accounts, by the way, that remain our partners and customers just demand a bit less product, and we think that is largely driven by the war in the Middle East. Obviously, Ukraine is not helping. Clearly energy pricing is impacting the environment. So that's what we're seeing in Europe.
Omar Asali: As of now, we are expecting a decent Q4, but frankly, expecting similar behavior, if you will, with new accounts maybe adding and existing accounts being a little bit cautious, in Europe. In Asia Pacific, we have seen some weakness and that weakness continues.
Omar Asali: When you put it all together, we are expecting, given what we are seeing as of now in Q4, and our expectations, that actually peak season is going to be pretty good. In automation, business continues to perform extremely well. Obviously right now, as you know, at this moment in the calendar, our book is done, and we are just working on executing and hitting milestones to get the revenue. Our visibility into 2027 for automation continues to be decent.
Bill Drew: Yeah, I guess I will just add to that. Omar covered a lot, but as far as just some additional commentary, I think, from what we were hearing from the channel partners in Europe was that the sell-through in Q3 remained strong. They did have some additional inventory that they were working through, but the sell-through to the end users remained pretty solid.
Bill Drew: We are expecting Europe to be better in Q4. Then just related to Asia, we have been making a big effort to localize our production there, and that includes local paper sourcing, which will be complete by the end of this year. There has been some movement in timing, in terms of lowered lead times there results in distributors resetting their order patterns.
Bill Drew: We are excited about what that will do from a margin perspective for us going into next year, and also just from a competitive standpoint. Some puts and takes in the India and APAC region.
Greg Palm: Got it. Okay. Then just the margin performance was pretty impressive given kind of everything going on. Both revenue and just input cost-wise. I do not know if you can just kind of help us figure out how much is left in kind of that journey. In terms of the quarter, how much was mix-related versus some of these efficiencies that you have targeted? Just looking ahead to next year, again, in light of this kind of input cost environment that continues to worsen, kind of how you feel about gross margin in 2027?
Omar Asali: Greg, let me just start with high-level comments, then Bill will provide the detail. One, our operating leadership, which many of this leadership has joined in the last 18 months, is doing a phenomenal job with our physical footprint, with our lines, our speed, scrap rates, frankly, procurement, which is a big focus of ours.
Omar Asali: It is a series of projects I have mentioned in the past. We have instituted Lean and Six Sigma. We have pretty much an exercise around CI and continuous improvement that is occurring in the company. It has been a lot of different areas of improvement. From my belief, despite the challenging environment, I think we are probably in the third inning of this journey. I think there is quite a bit more efficiencies that our team is looking at that we are excited about.
Omar Asali: We feel really good about improving what we are doing and doing that at much better spend and much better margin profile. As Bill mentioned, APAC in particular, we think there is tremendous room there as we become more efficient, but frankly, we are seeing that in North America and in Europe as well. That is an area that we think will add quite a bit of value in 2027. To your question about mix, that has helped, obviously this past quarter a little bit. Whatever we do well with our channel partners, which in North America we did in Q3, that always helps the margin profile. Bill.
Bill Drew: Yeah. I guess, it varies by region, Greg, in terms of how much is left and kind of the direction. In North America, I think we have made really good improvements throughout the year, and getting better each quarter sequentially. We do expect that to continue to improve in Q4. In Q3, I would say the benefit from the mix was probably about 1 point to 1.5 points in North America, and then the rest comes from just operating more efficiently, and fewer one-time costs.
Bill Drew: I think we will continue to make good progress there. The operations team is doing really well. We will continue to make sure that, even with a tighter paper pricing environment, we will continue to pass on those costs to protect that margin improvement. In Europe, last year we had really strong margins in the H2.
Bill Drew: In the Q1, we also had really strong margins and we are doing everything to protect those. With the surcharge, though, we are making sure that we are protecting the gross profit dollars in the H2 here rather than just focused on the margin, just given how much the energy costs have increased in the region. So you would expect some headwinds in Q4 in the European region.
Bill Drew: Automation, I think overall, you just continue to see continued progress there. In Europe, we continue to take costs out of the machines, get more efficient in terms of how much time it takes us to build the products. In North America, as volume starts to ramp up in North America and we get more traction there, you will continue to see better fixed cost absorption.
Bill Drew: Overall, we do expect automation to continue to improve from a margin profile in Q4 and next year as well.
Operator: Your next question is from the line of Ghansham Panjabi with Baird. Your line is now open. Please go ahead.
[Analyst] (Baird): Hey, Omar. Hey, Bill. Good morning. This is Will Cotton for Ghansham. I think maybe my first question is just around some of the larger partnerships, Walmart, Amazon. How have those progressed versus your initial expectations? On a go-forward basis, how should we think about the rollout of the rest of that, given all the steps you've taken with it, obviously? Yeah.
Omar Asali: Yeah, morning, Will. I think we feel great about those relationships. Our dialogue with both enterprises is very close, very frequent. We have better and better visibility in some of the future plans and some of the areas where we believe we can add value. One of the key initiatives that we've done, and you've seen it in this quarter, we want to make sure that we're dedicating our resources to the highest impact with these accounts.
Omar Asali: So we are being very mindful that we are working with them, let's call it more and more in non-commoditized areas. Maybe less in just some of the very basic consumables, if there isn't any sort of powered solution or any semi-automated solution or automated solution. That we think just, number one, improves our margin profile. It makes the relationship deeper and more stable.
Omar Asali: It makes us more value add and more solution-oriented. That is the stuff that we are doing with them. Our expectation is that in 2027, both of these relationships will continue to provide very, very meaningful growth. Part of that growth is coming from what I am going to call a little bit more project orientation when we are working with them on new introductions and new ideas where we can add value.
Omar Asali: The funnel with us and both of these enterprises that you mentioned is extremely busy. It is extremely robust. We are dedicating a lot of resources. So far, we feel very good about how those relationships are trending, and we expect that what we have outlined from a spend standpoint from them over the next multiple years, will materialize and that they will be using us at that scale and scope.
[Analyst] (Baird): Okay. Very helpful. I guess my last question, just on 2027, the swing factors, and obviously, you are not going to give concrete guidance, but just the major puts and takes, right? Automation turning EBITDA positive, the cold chain capacity, just all that stuff in general. Can you kind of give me just a high-level view of that?
Omar Asali: Sure. Think of the business going forward as three key business blocks. The traditional PPS business where we have innovated. It is very important. Obviously, that is a business where we have a 50-year history, and geographically and in light of wars and geopolitical and macro environments, there is different trends, and we are navigating. As you can tell from this call, we are not just navigating by passing price to our customers.
Omar Asali: We are spending a lot in our efficiency so that we can provide more and more value add. We feel pretty good overall with how we are navigating, and I think we are starting to exhibit much better commercial and operational muscle there. Automation, I think, is going to continue to drive outsized growth and returns. We are very excited that we are expecting a profitable year in automation the full year in 2027. Our pipeline looks good. Our conversations are good.
Omar Asali: I know I highlighted the partnership with Element Logic, but we also have other partnerships that we are doing, so we feel great about that business. Cold chain we will be ramping up early in the year. As we speak, we are building the lines. We are finalizing, expanding our capacity. We think that is going to be a meaningful contributor in 2027, probably starting in Q2, and as the year progresses. We think the opportunity there is huge.
Omar Asali: Just to let you know, this is a funnel and a pipeline that we have that is active, that has been tested. In many cases, our product has been approved. So it is a matter of doing the operational scale up in order to fulfill that. These are the key pieces driving top line with automation and cold chain driving the bulk of the growth. We are working on the margin improvement.
Omar Asali: That's another very key building block for us, and we continue to dedicate a lot of hours and effort around operational and continuous improvement.
Omar Asali: The goal, as you put that together, other than driving growth and margin, it should improve our cash profile, it should improve our cash generation, and help continue delever our CapEx structure, which is important for us. We think the key pieces are there. What we don't know is the macro picture, and what happens from a macro picture. But I think the micro at our level, our confidence as a company and our execution is honestly increasing every day.
[Analyst] (Baird): Okay, great. Thanks. Super helpful.
Operator: As a reminder, if you would like to ask a question, please press star one to raise your hand. Your next question is from the line of Kieran McCabe with Cantor Fitzgerald. Your line is now open. Please go ahead.
Kieran McCabe: Hi, guys. This is Kieran McCabe for Troy Jensen. Apologize if my question's been addressed, as I joined the call a little late. But I was wondering on the macro environment in EMEA and Europe and Asia, if it doesn't turn around as going into 2027 or kind of remains as is there any kind of value propositions that Ranpak can express to customers instead of kind of wait and seeing for the macro to turn?
Kieran McCabe: I know last quarter you mentioned that packaging was pricing and economics were competitive with resin given kind of the inflation environment. Do you kind of see that instead of customers waiting for the macro environment, they may realize that there's some advantage to adopting Ranpak regardless of the macro environment?
Bill Drew: Yeah, for sure. A lot of that comes from the innovation we have been working on in the PPS business as well as coupling with automation, which is really a differentiator for us. I think, in this environment, even if things remain choppy, we will be able to work with customers to provide them with unique and differentiated solutions.
Bill Drew: Our new products, such as the FillPak Mini, our new Guardian solutions, are getting really good adoption, so that is helping us win accounts. We are also doing things like a PadPak Multi-Station, which you may have seen on our website, which is a unique offering that enables us to serve some high-volume customers with some of our hybrid solutions, if you will.
Bill Drew: So we are having really good, I think, deep conversations with customers, and able to go out and win business, not just focused on price. In other areas like the Asia Pacific market, the localization effort that I mentioned earlier, the procurement and operations team has done a really good job of getting us 90% of the way to having local paper sourcing by year-end there, which will reduce our cost profile, enable us to share that with customers to go out and win business.
Bill Drew: Places like Australia, Japan, we feel good about being able to go out there and win new business starting next year.
Kieran McCabe: Great. My other question was on the strong growth in automation. What is the mix of, is it really your large customers that you have, like the Walmarts, the Amazons, the larger customers really adopting and driving their programs? Or is there also a substantial portion of that coming from new customers coming online? Can you maybe give a little color as where is the, what are the drivers of the growth there in terms of that mix?
Omar Asali: I think it is both. We continue to do very well with our large customers. They are opening more facilities. We are part of their design. We are part of what they are building in next generation sort of warehouses. That is a very important driver, and this is why some of our key relationships there are important.
Omar Asali: But honestly, we continue to win with a number of new accounts. The growth has been driven by both large enterprises, existing customers, as we continue to roll out with them. But we are winning a lot with new accounts. I would say in the US, large enterprises tend to be a bigger factor. In Europe, you tend to see a lot of new customers buying a few lines here and there. That trend continues. It is the nature of the economies, I think, of the two regions.
Omar Asali: The US tends to be a bit chunky with bigger guys. Europe is quite spread out. But both are very key drivers of growth for us.
Kieran McCabe: Great. Thank you, Omar, for taking my questions. Appreciate it.
Omar Asali: Thank you.
Kieran McCabe: Sure.
Operator: We have reached the end of the Q&A. I will now turn the call back to Bill Drew, Chief Financial Officer, for closing remarks.
Bill Drew: Thank you, Fern, and thank you all for joining us today.
Operator: This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded. Thank you for joining Ranpak Holdings Q3 2026 earnings call. The line will disconnect automatically.
