Kodak’s Operational EBITDA Jumps 2800% in Q3 as Pension Windfall Boosts Balance Sheet
Profitability Surges on Cost Controls and Pension Reversion Gains
Kodak (NYSE:KODK) reported third-quarter 2025 financials that mark a decisive shift from cautious outlook to growth momentum. Operational EBITDA exploded to $29 million, a dramatic 2800% increase from just $1 million in Q3 2024. Gross profit rose 51%, reflecting improved margins, disciplined cost controls, and operational focus. These improvements, along with a major pension reversion transaction now expected to deliver $600 million instead of $500 million, signal a financial landscape at Kodak that is more resilient than it has been in years.
Gross Profit and EBITDA Climb Despite Flat Net Income
The quarter delivered $269 million in revenue—a modest 3% year-over-year gain—driven by standout performance in Advanced Materials & Chemicals (AM&C), where revenues jumped 15%. Notably, gross profit grew to $68 million (up from $45 million) and gross margin widened by eight points to 25% as Kodak navigated input cost pressures with targeted price increases and manufacturing efficiencies. Operational EBITDA's $28 million year-over-year improvement came primarily from higher sales prices, increased volume in core chemical businesses, and a favorable legal cost swing.
| Metric | Q3 2025 | Q3 2024 | Change |
|---|---|---|---|
| Revenue | $269M | $261M | +3% |
| Gross Profit | $68M | $45M | +51% |
| Gross Margin | 25% | 17% | +8 pts |
| Operational EBITDA | $29M | $1M | +2800% |
| GAAP Net Income | $13M | $18M | -28% |
| Cash Balance | $168M | $201M (Dec '24) | -16% |
Segment Performance: AM&C Drives Gains While Print Remains Stable
Kodak’s AM&C segment was a clear bright spot, growing revenues by $11 million and boosting segment EBITDA by $10 million. The Print division experienced a 3% drop in sales but saw a dramatic $17 million EBITDA swing—from a loss to an $8 million gain—supported by margin improvements and cost reductions. Management cited new still film product launches and direct distribution moves in AM&C as drivers for future growth, underscoring the division's emerging role in the company's strategy.
| Segment | Q3 2025 Revenue ($M) | Q3 2024 Revenue ($M) | Revenue Change ($M) | Q3 2025 Op. EBITDA ($M) | Q3 2024 Op. EBITDA ($M) | Op. EBITDA Change ($M) |
|---|---|---|---|---|---|---|
| 177 | 182 | -5 | 8 | -9 | 17 | |
| AM&C | 82 | 71 | 11 | 16 | 6 | 10 |
| Brand | 6 | 5 | 1 | 5 | 4 | 1 |
| Total | 265 | 258 | 7 | 29 | 1 | 28 |
Pension Reversion: Cash Infusion Supports Debt Reduction
Kodak’s pension reversion plan—now expected to bring in $600 million, up from the previously forecast $500 million—will enable a meaningful paydown of debt and fortify the balance sheet. The company ended the quarter with $168 million in cash (up $13 million from June 2025), despite ongoing investments. Management notes that post-reversion, term debt should fall to $200 million, reducing interest costs and boosting financial flexibility.
Going Concern Fully Resolved—Liquidity Risks Diminished
One of the quarter’s most significant milestones was the full resolution of Kodak’s “going concern” uncertainty, as management confidently asserted that cash flow and access to liquidity are now stable. The increase in shareholder equity—from $641 million to $762 million since December—mirrors the company’s healthier capital structure.
What’s Next: Operational Efficiencies and Growth Prospects
While net income slipped from $18 million to $13 million on a GAAP basis (partly reflecting higher interest costs), management is laser-focused on margin improvement and innovation-led expansion in its advanced materials business. Investors may want to monitor the AM&C segment’s continued growth and Kodak’s execution of its debt reduction strategy. With operational concerns resolved and balance sheet risk diminished, Kodak’s Q3 results suggest the company is entering a more stable and opportunistic phase—an outcome not many would have predicted a few years ago.
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