Solstice Advanced Materials Reports First Quarter 2026 Results

Net Sales in the first quarter of 2026 were $991 million, a 10% increase compared to the first quarter of 2025, reflecting a 12% increase in Net Sales in the Refrigerants & Applied Solutions segment and a 7% increase in Net Sales in the Electronic & Specialty Materials segment. Organic Net Sales¹ increased 8% in the first quarter of 2026, driven by both volume growth and favorable pricing.

Net Income attributable to Solstice Advanced Materials in the first quarter of 2026 was $85 million, compared to $134 million in the first quarter of 2025. The decline was primarily driven by higher standalone company operating costs, R&D investments, net interest expense, and non-controlling interest, partially offset by higher Net Sales.

Adjusted EBITDA^1,2 for the first quarter of 2026 was $249 million, relatively unchanged compared to the first quarter of 2025. Adjusted EBITDA Margin^1,2 decreased 277 basis points to 25.1%, primarily driven by the near-term margin impact of the ongoing transition to low global warming potential ("LGWP") refrigerants and higher R&D spend, partially offset by volume growth and favorable pricing.

Operating Cash Flow for the first quarter of 2026 was $199 million. Capital Expenditures³ were $82 million, a 32% increase compared to the prior-year period due to planned increases in capital spending intended to drive long-term growth. Free Cash Flow¹ for the first quarter of 2026 was $124 million.

As of March 31, 2026, the Company's Total Long-Term Debt was $2.0 billion and Cash and Cash Equivalents were approximately $642 million. As a result, the Company's Net Leverage ratio was approximately 1.4x based on a trailing twelve-month Adjusted EBITDA¹. Total liquidity was approximately $1.6 billion, including Cash and Cash Equivalents and $1.0 billion of availability through the Company's revolving credit facility.

The Company announced on April 27, 2026, that the Solstice Board of Directors approved a quarterly cash dividend of $0.075 per share, to be paid on June 10, 2026, to shareowners of record as of May 27, 2026.

Net Sales for the Refrigerants & Applied Solutions segment were $711 million in the first quarter of 2026, up 12% compared to the first quarter of 2025. Net Sales in Refrigerants increased 19%, reflecting strong volume and pricing across the segment's product offerings. Nuclear revenues increased 27%, reflecting both favorable pricing and increased volumes. Net Sales in Healthcare Packaging improved 9% as customer demand patterns recovered following destocking in the second half of 2025. These increases were partially offset by an 8% decline in Building Solutions & Intermediates.

Segment Adjusted EBITDA decreased 3% in the first quarter of 2026 compared to the first quarter of 2025. Adjusted EBITDA Margin decreased 522 basis points, primarily driven by previously communicated changes in refrigerant mix as a result of the near-term impact of the ongoing transition to LGWP refrigerants, as well as higher R&D spend. These decreases were partially offset by volume growth and favorable pricing.

Net Sales for the Electronic & Specialty Materials segment were $281 million in the first quarter of 2026, up 7% compared to the first quarter of 2025. Growth was primarily driven by a 21% increase in Electronic Materials, reflecting volume growth on robust customer demand for deposition and thermal solutions in leading-edge applications. Safety & Defense sales were comparable to the prior year period due primarily to order timing. Research and Performance Chemicals revenues were unchanged, reflecting growth in personal care offset by ongoing end-market softness in construction markets.

Segment Adjusted EBITDA increased 10% in the first quarter of 2026, primarily driven by volume growth in Electronic Materials. Segment Adjusted EBITDA Margin increased 52 basis points compared to the first quarter of 2025.

Corporate Expenses totaled $52 million in the first quarter of 2026, compared to $32 million in the first quarter of 2025, due to incremental ongoing costs necessary to operate as an independent public company. There were no standalone cost adjustments in the first quarter of 2026, compared to $21 million in the first quarter of 2025, which was prior to the separation from Honeywell on October 30, 2025.

Income Tax Expense was $31 million in the first quarter of 2026, a decrease of $16 million compared to the first quarter of 2025 due to lower pre-tax income, reflecting an adjusted effective tax rate of 23%.

Solstice is reaffirming its full-year 2026 financial guidance and providing guidance for the second quarter of 2026.

The Company plans to host an informational webinar on its Nuclear business on Thursday, June 4, 2026. A live webcast and related presentation materials will be available on the Investor Relations section of the Company's website at investor.solstice.com. Dial-in details will be made available closer to the event.

A replay of the webcast will be available for 30 days following the presentation.

The Company does not provide a reconciliation of forward-looking Adjusted EBITDA (non-GAAP) or Adjusted diluted Earnings per Share to GAAP net income (loss) attributable to Solstice Advanced Materials, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because deductions (such as repositioning charges, impairment charges, and litigation and other matters) used to calculate projected net income (loss) vary based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income (loss) at this time. The amount of these deductions may be material and, therefore, could result in projected GAAP net income (loss) being materially less than projected Adjusted EBITDA (non-GAAP) or Adjusted Net Income attributable to Solstice (non-GAAP). These statements represent forward-looking information and a projected financial outlook, and actual results may vary. Please see the risks and assumptions referred to in the “Forward-Looking Statements” section of this news release. The guidance in this news release is only effective as of the date it is given and will not be updated or affirmed unless and until the Company publicly announces updated or affirmed guidance.

Solstice will discuss its first quarter results during an investor conference call starting at 8:30 a.m. Eastern Time today. A live webcast and related presentation materials are available at investor.solstice.com. The teleconference can be accessed by dialing 877-407-8029 (North America toll-free) or +1 201-689-8029 (international).

A replay will be available for 30 days following the presentation.

The Company uses non-GAAP financial measures to supplement financial measures prepared in accordance with U.S. GAAP. These include (1) Organic sales percentage, (2) Adjusted EBITDA, (3) Adjusted EBITDA Margin, (4) Adjusted Standalone EBITDA, (5) Adjusted Standalone EBITDA margin, (6) Adjusted Net Income attributable to Solstice, (7) Adjusted diluted EPS, (8) Free cash flow, (9) Net debt, (10) Total leverage ratio, and (11) Net leverage ratio.

Below are definitions and reconciliations of certain non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. Management believes that, when considered together with reported amounts, these measures are useful to investors and management in understanding our ongoing operations and in the analysis of ongoing operating trends. Management believes these non-GAAP financial measures provide investors with a meaningful measure of its performance period to period, align the measures to how management evaluates performance internally, and make it easier for investors to compare our performance to peers. These measures should be considered in addition to, and not as replacements for, the most directly comparable U.S. GAAP measure. The non-GAAP financial measures we use are as follows:

•        Organic sales percentage: The Company defines organic sales percentage as the year-over-year change in reported sales relative to the comparable period, excluding the impact on sales from foreign currency translation and acquisitions, net of divestitures, for the first 12 months following the transaction date. We believe this measure is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.

•        Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Standalone EBITDA, and Adjusted Standalone EBITDA margin: The Company defines Adjusted EBITDA as net income excluding income taxes, depreciation, amortization, interest and other financial charges, remeasurement of foreign currencies, stock-based compensation expense, nonoperating pension expense (income), transaction-related costs, repositioning charges, asset retirement obligations accretion, asset impairment charges, litigation costs and insurance settlements (net of recoveries), gains and losses on disposal of assets, and certain other items that are otherwise of an unusual or non-recurring nature. The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by Net sales. The Company defines Adjusted Standalone EBITDA as Adjusted EBITDA less, for fiscal year 2025, estimated recurring and ongoing costs required to operate a new independent public company, and autonomous entity adjustments as well as adjustments for certain other employee compensation expense for employees that have historically been shared with other Honeywell businesses and were transferred to the Company in connection with the spin-off. The Company defines Adjusted Standalone EBITDA Margin as Adjusted Standalone EBITDA divided by Net sales. We believe these measures are useful to investors as they provide greater transparency with respect to supplemental information used by management in its financial and operational decision making, as well as understanding ongoing operating trends.

•        Adjusted net income attributable to Solstice and Adjusted diluted EPS: The Company defines Adjusted net income attributable to Solstice as Net income attributable to Solstice Advanced Materials excluding the after-tax impact - based on the tax rates by jurisdiction, net of discrete items - of amortization of acquired intangibles, remeasurement of foreign currencies, nonoperating pension expense (income), transaction-related costs, repositioning charges, asset retirement obligations accretion, asset impairment charges, litigation costs and insurance settlements (net of recoveries), gains and losses on disposal of assets, and certain other items that are otherwise of an unusual or non-recurring nature. We believe Adjusted net income attributable to Solstice is useful to investors as it provides greater transparency with respect to supplemental information used by management in its financial and operational decision making, as well as in understanding ongoing operational trends. The Company defines Adjusted diluted EPS as Adjusted net income attributable to Solstice divided by diluted weighted average shares outstanding to reflect shares that are dilutive or anti-dilutive based on the amount of Adjusted net income attributable to Solstice. The weighted average common shares outstanding used to calculate Adjusted diluted earnings (loss) per share will differ from such shares used to calculate diluted earnings (loss) per share (GAAP) when the inclusion of dilutive shares has an anti-dilutive effect for one calculation but not for the other. We believe Adjusted diluted EPS is useful to investors as it provides greater transparency with respect to supplemental information used by management in its financial and operational decision making, as well as in understanding ongoing operational trends.

•        Free cash flow: The Company defines free cash flow as net cash provided by operating activities less net capital expenditures. Net capital expenditures include capital expenditures paid less proceeds from the disposals of property, plant, and equipment. We believe this measure is useful to investors and management as a measure of cash generated by operations that can be used to invest in future growth through new business development activities or acquisitions, pay dividends, repurchase stock, or repay debt obligations prior to their maturities. This measure can also be used to evaluate our ability to generate cash flow from operations and the impact that this cash flow has on our liquidity.

•        Net debt, total leverage ratio and net leverage ratio: The Company defines net debt as total debt less cash. The Company defines total leverage ratio as total debt divided by Adjusted EBITDA. The Company defines net leverage ratio as net debt divided by Adjusted EBITDA. For purposes of showing total leverage ratio and net leverage ratio, we use Adjusted Standalone EBITDA instead of Adjusted EBITDA. We believe these measures are useful to investors and management in understanding our overall financial condition.