ESI

Element Solutions just printed its Q3 2026 scorecard and the chemicals specialist came out with record adjusted revenue and adjusted earnings, yet the stock still dropped almost 9% on the day to about US$33. The headline story is simple: the business delivered roughly US$995.3 million in sales and US$65.7 million in net income, but sentiment swung hard the other way. Traders focused on expectations and the recent share slide, not on the fresh high in adjusted profitability. That gap between price reaction and operating performance is where the real story starts for Element Solutions. Impressed by Element Solutions posting record adjusted earnings but uneasy about how quickly sentiment flipped on the share price reaction? Look for peers that pair resilient profitability with sturdier market support in our 30 resilient stocks with low risk scores - Revenue (Q3 2026 vs. Q3 2025): US$995.3 million vs. US$656.1 million (up about 52%) - Net Income, excl. extra items (Q3 2026 vs. Q3 2025): US$65.7 million vs. US$39.3 million (up about 67%) - Basic EPS (Q3 2026 vs. Q3 2025): US$0.27 vs. US$0.16 (up about 66%) - Trailing Net Profit Margin (latest 12 months vs. prior year): 5.9% vs. 9.6% (margin compressed) Ask Charlie which Element Solutions bet matters most by 2028. For the bullish AI and data center pitch around Element Solutions to hold, electronics needs to keep taking more of the load and the big growth projects must move from promise to execution. "The main factor that has to go right is that Element Solutions continues to execute on its shift toward higher value electronics, including successful ramp up of Kuprion ActiveCopper, Micromax and EFC Gases, while managing raw material and logistics cost pressures." Q3 shows real progress on that ambition. Electronics organic growth of 18%, Semiconductor Solutions at 24% and ex metals EBITDA margin at 28.2% all point to mix moving the right way. Kuprion hit new qualification milestones and Micromax plus EFC added incremental sales, while company wide margins stayed healthy despite input cost concerns. The more cautious view is that heavy project spend and potential AI demand cooling could crimp returns just as expectations climb. "If AI and data center related spending normalizes toward the company's medium term growth algorithm, while large capital projects such as Kuprion capacity and Micromax and EFC integration continue to absorb cash, Element Solutions may deliver slower revenue and earnings growth than implied by current expectations." Recent results cut both ways. Kuprion capex and Micromax and EFC expansion are clearly consuming cash, with Q3 capex at US$30 million and full year targeted near US$110 million. At the same time, adjusted free cash flow of US$135 million and net leverage around 2.7x indicate capacity to fund these builds without obvious balance sheet strain, even as the stock fell about 9% on the print. Not everyone reads the same price the same way. → See the higher figure this Narrative lands on, and how it gets there. Element Solutions shows that strong operating results can coincide with a sharp share-price move. The real opportunity is in stocks that could be undervalued before expectations reset. - Company 1 - 35% below our estimate - uses a disciplined operating playbook and portfolio pruning to emphasize higher-margin aftermarket, power and nuclear projects. - Company 2 - 49% below our estimate - wins long-duration mega contracts and Indo Pacific defense work under tighter bidding discipline and improved contract terms. - Company 3 - 50% below our estimate - shifts toward larger fee-based relationships and partnership-driven products to broaden income and capture cost and revenue synergies. Three companies from the same screener. Open every one of the 30 undervalued companies on it → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ESI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Element Solutions (ESI) just released third quarter 2026 results that put fresh numbers in front of investors, with revenue of US$995.3 million and net income of US$65.7 million framing the latest snapshot of the business. Element Solutions shares have given back some momentum in the short term, with the stock down 8.89% on a 1-day basis and 11.57% over 90 days, yet the 1-year total shareholder return of 28.71% and 3-year total shareholder return of 87.54% still point to a strong longer run. Scan how Element Solutions compares to other specialty chemicals and materials plays by running the hand picked 20 high quality undiscovered gems that share strong fundamentals and under the radar potential. After a strong earnings print but a sharp pullback in Element Solutions shares, the next step is clear: Do the current numbers still justify new money going in, or has the easy upside already been taken? Element Solutions is trading at $33.11 against a widely followed fair value estimate of about $46.45, so the valuation gap is front and center for anyone reading the latest quarter. The current view that Element Solutions is undervalued rests on reported growth in electronics-driven earnings, expanding ex-metals margins and disciplined capital allocation. Together, these factors suggest the share price does not yet fully reflect the company's earnings power and cash generation. See why 3 investors see Element Solutions as 29% undervalued. Result: Fair Value of $46.45 (UNDERVALUED) Still, higher oil-linked input costs that outpace Element Solutions' pricing power, along with any reset in AI or data center spending, could quickly test this undervalued story. Find out about the key risks to this Element Solutions narrative. The fair value narrative paints Element Solutions as materially undervalued, yet its current P/E of 39.4x tells a different story. That multiple sits well above the US Chemicals sector on 22x, the peer group on 25.6x, and the fair ratio of 29.4x that the market could move toward. For investors, that gap points to clear valuation risk if sentiment cools before earnings catch up. How comfortable are you paying a premium price for a value thesis? See what the numbers say about this price in more detail, and how that premium stacks up against both peers and the fair ratio, in our valuation breakdown See what the numbers say about this price — find out in our valuation breakdown. For a visual read on how Element Solutions compares on headline valuation, the latest P/E chart against the wider industry helps put today's premium in context If this mix of optimism and caution around Element Solutions feels familiar, that is the signal to get hands on with the data and pressure test it for yourself. A fast way to frame both sides of the debate is to review our breakdown of 3 key rewards and 2 important warning signs If you liked testing the Element Solutions story against the numbers, do not stop there. Fresh opportunities often emerge where fewer eyes are looking. - Target potential upside with a focus on quality by scanning a curated 29 high quality undervalued stocks that filters for fundamentals rather than hype alone. - Prioritise resilience and sleep better at night by reviewing a 30 resilient stocks with low risk scores built around companies with lower risk scores. - Strengthen the core of your portfolio by using a list of solid balance sheet and fundamentals (26 results) to zero in on businesses with sturdier finances. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ESI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. - Revenue: Record quarterly revenue; organic net sales grew 13% year-over-year. - Adjusted EBITDA: Record quarterly adjusted EBITDA; constant currency adjusted EBITDA increased 29% year-over-year; full-year 2026 guidance raised to approximately $720 million. - Adjusted EPS: Record quarterly adjusted EPS, up 22% year-over-year; full-year 2026 adjusted EPS growth expected north of 20%. - Adjusted EBITDA Margin (ex-pass-through metals): Improved 50 basis points year-over-year to 28.2%. - Electronics Organic Net Sales: Grew 18% organically, with all verticals up double digits; fourth straight quarter of double-digit organic sales growth. - Semiconductor Solutions: Organic net sales grew 24%; growth magnified by higher precious metals prices. - Assembly Solutions: Grew 16% organically. - Circuitry Solutions: Grew 16% organically. - Micromax Contribution: Nearly $140 million to reported sales, roughly two-thirds metals-related; performing ahead of plan. - Industrial Solutions: Grew 3% organically, driven primarily by raw material cost-related price increases; global volumes roughly flat. - Offshore Solutions: Declined 13% organically due to project delays and an equipment failure at a large customer. - EFC Gases and Advanced Materials: Contributed $23 million to revenue, up 45% sequentially and 19% year-over-year. - China Business: Grew 30% in the quarter. - Adjusted Free Cash Flow: $135 million for the quarter, a material sequential and year-over-year increase. - CapEx: $30 million invested in the quarter; $83 million year-to-date; full-year expectation of roughly $110 million (less than 3% of expected full-year sales). - Net Leverage: 2.7 times on a pro forma basis, including full contributions from Micromax and EFC. - Shareholder Returns: Almost $60 million allocated in the quarter between dividend and repurchase of roughly 1.1 million shares. - Warning! GuruFocus has detected 11 Warning Signs with JSE:EQU. - Is ESI fairly valued? Test your thesis with our free DCF calculator. Release Date: October 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Element Solutions Inc (NYSE:ESI) delivered record quarterly revenue, adjusted EBITDA, and adjusted EPS, with organic sales growth of 13% and constant currency adjusted EBITDA up 29% year-over-year. - Electronics segment organic sales grew 18%, with broad-based double-digit growth across all verticals, led by Semiconductor Solutions up 24%. - Adjusted EBITDA margins excluding pass-through metals improved 50 basis points to 28.2%, driven by favorable product mix and strong incremental margins in Electronics. - Recent acquisitions Micromax and EFC are performing well ahead of plan, contributing significantly to revenue and adjusted EBITDA growth. - Element Solutions Inc (NYSE:ESI) raised full-year adjusted EBITDA guidance to approximately $720 million, implying over 20% adjusted EPS growth for 2026. - Specialty segment margins were pressured by an equipment failure at a large offshore customer and price-cost timing in Industrial Solutions, impacting overall profitability. - Offshore Solutions organic sales declined 13% due to project delays and the equipment failure, with full recovery not expected until Q1 2027. - Industrial Solutions volumes were flat, with weakness in general industrial and construction markets, and only modest pickup in automotive. - Higher incentive compensation accruals impacted margins by more than 100 basis points year-over-year across the business. - EFC Gases and Advanced Materials business is lumpier than other segments, with earnings cadence still being understood, potentially leading to volatility. Q: Mike Harrison of Seaport asked about the Circuitry Solutions business, noting it appears to be accelerating, and requested color on how content opportunity expands with multilayer circuit boards versus standard PCB applications, plus any factors that could slow growth in advanced circuit boards.A: CEO Benjamin Gliklich said the circuitry business is performing exceptionally well, with the overall market substantially outperforming volume expectations2026 circuit board volume growth forecasts rose from about 6% at the start of the year to nearly 10% today, despite soft consumer electronics. All the growth is coming from the data center market's highest-end, complex multilayer boards. ESI is outperforming expected market growth by more than 500 basis points year-to-date, driven by technology penetration built over several years, and he expects that to continue. Q: Mike Harrison asked about the sustainability of the strong incremental margin this quarter, excluding higher incentive compensation, and the drivers still playing out from a margin standpoint.A: CFO Carey Dorman said that excluding incremental incentive comp accruals (over 100 basis points of year-over-year impact), incrementals were in the mid-40s% for the whole business and about 50% for Electronics. The key driver is that growth is concentrated in the higher end of the business, where fewer ecosystem competitors can meet customer needsa dynamic he views as sustainable. Even in Specialties, underlying margin expansion is occurring after adjusting for comp accruals and transitory raw material inflation. Versus the 30%40% incremental guidance from Investor Day, results are better, and he expects the high end of that range to continue into next year. Q: John McNulty of BMO asked what precipitated the organizational changesMatt Liebowitz becoming COO and Carey Dorman adding President to his CFO rolegiven the earlier Investor Day, and whether it relates to the pace of growth or the Solstice shift.A: CEO Benjamin Gliklich said the Electronics business has more than doubled over the past several years, having stood up best practices and added functional leaders and standard processes. The business is now decentralizing into more autonomous, customer-aligned business units to move fasterturning the analogy of a tanker into speedboatswithout sacrificing best practices or the MacDermid Alpha brand. This is a logical step as the business has scaled and responds to customer feedback across the supply chain to partner and move faster. Q: John McNulty asked about cash use priorities given the balance sheet is back below the year-end leverage target, the historical cadence of roughly two bolt-ons per year, and recent valuation pressurewhether it remains business as usual or shifts temporarily toward buybacks over M&A.A: CEO Benjamin Gliklich said capital allocation remains opportunistic between share repurchases and outbound M&A. The portfolio is strong with nothing the company needs to own, but the footprint and brand mean quality-enhancing additions are better inside ESI than outside. The framework is unchanged; ESI was on the front foot buying shares in Q3, and with the balance sheet healthier than expected at this point in the year given the earnings trajectory, "we're on the offensive." Q: Josh Spector of UBS asked about Kuprion, noting incremental CapEx is targeted there, and requested details on what is being accelerated and the milestones and timelines for expansions over the next couple of years.A: CEO Benjamin Gliklich said two leading-edge customers qualified ActiveCopper for high-volume manufacturing in Q3the precursor to the revenue ramp expected next year. The first site is producing in Fremont, California, a second site is underway in Connecticut, and plans for a third site are underway. The supply chain is not yet caught up to expected demand, but by late 2027/early 2028 ESI will have multiple sites supplying multiple eager customers. The program is on track or even ahead on a medium-term horizon, and Kuprion will contribute material EBITDA by 2028. Q: Josh Spector asked what is driving the strong growth and noted sequential acceleration at EFC.A: CEO Benjamin Gliklich said EFC is lumpier than other businesses due to large orders tied to satellite launches, while core semiconductor and electrical infrastructure businesses are also growing nicely. The expected growth is delivering and the outlook is probably better based on the pipeline. ESI is adding capacity there, contributing to CapEx in 2026 and into 2027 in response to strong customer pull. Q: John Roberts of Mizuho asked about the opportunity for glass cores potentially replacing plastic circuit boards as chip temperatures warp boards, noting a competitor announced plating-on-glass product lines, and how ESI is positioned.A: CEO Benjamin Gliklich said the pace of supply chain innovation is accelerating and ESI is at the table enabling new materials. Its circuitry portfolio has solid solutions for plating on glass through glass vias, and ActiveCopper is also a leading candidate to solve that problema big opportunity across the Wafer-Level Packaging and Circuitry businesses. On timing, glass cores have been discussed for years and pushed out before; he is not counting on material near-term volume but sees it as potentially substantial over a three-to-five-year horizon. Q: Chris Parkinson of Wolfe Research asked for insights on year-end 2026 and 2027 volume trajectories for Micromax and Semiconductor, including how volume versus price/product mix is delineated for the next six to nine months.A: CEO Benjamin Gliklich said there has been no diminution or erosion in demand despite capital market volatility, and Q4 is off to a solid start. Except for metal price volatility, growth has come primarily from volume across the businesses; Micromax is seeing an uplift in higher-value volume with some decline in lower-value volume skewed toward automotive. It remains a volume story on the electronics side outside Micromax, with no material change in demand drivers expected through Q4. Q: Chris Parkinson asked for more detail on M&A strategywhether ESI is assessing another tangential pillar or primarily augmenting existing Assembly or Circuitry businesses.A: CEO Benjamin Gliklich said M&A criteria are unchanged: back the businesses, with an emphasis in Electronics on buying companies that are better inside ESI than outsidecreating synergy, enhancing portfolio quality and the customer value proposition, creating opportunities for people, and enhancing shareholder value. Targets are primarily Electronics assets, either consolidating markets or adding new capabilities that broaden the offering, and only high-quality fits. Such assets are not abundant, but ESI is a great buyer and well positioned to prosecute transactions. Q: Fabian Jimenez of Bank of America asked to level For the complete transcript of the earnings call, please refer to the full earnings call transcript.

- Interested in Element Solutions Inc.? Here are five stocks we like better. - Record Q3 performance: Element Solutions reported record revenue, adjusted EBITDA and adjusted EPS, driven by 13% companywide organic sales growth and an 18% increase in Electronics sales. The company raised its full-year adjusted EBITDA outlook to approximately $720 million. - AI-related demand is accelerating: Semiconductor, assembly and circuitry businesses all posted double-digit growth, supported by demand for thermal-management materials, advanced packaging and high-performance circuit boards tied to AI infrastructure. Micromax and EFC Gases also performed ahead of expectations. - Mixed Specialties results and strategic changes: Industrial Solutions saw limited growth while Offshore Solutions declined 13% because of project delays and a customer equipment failure. Following termination of the Solstice transaction, ESI is pursuing its standalone strategy, decentralizing its Electronics organization and continuing investments, acquisitions and share repurchases. - Element Solutions Forming Flat Base After Q2 Earnings Element Solutions (NYSE:ESI) reported record third-quarter revenue, adjusted EBITDA and adjusted earnings per share, supported by continued demand for electronics products tied to artificial intelligence infrastructure, advanced semiconductor packaging and high-performance circuit boards. The company also raised its full-year adjusted EBITDA outlook to approximately $720 million. Chief Executive Officer Ben Gliklich said the company's Electronics segment remains a major driver of growth, with the business on pace to generate as much adjusted EBITDA in 2026 as the entire company produced in the prior year. He said demand has accelerated across the supply chain supporting AI infrastructure, particularly in thermal management, power density and advanced packaging applications. → Aurora Rejects Curaleaf's Higher Bid, But the Takeover Fight Isn't Over "Underlying demand in the high-end electronics market remains strong," Gliklich said, adding that the company expects its established positions in faster-growing, higher-value market niches to support future performance. Chief Financial Officer Carey Dorman said organic net sales rose 13% companywide in the third quarter, while constant-currency adjusted EBITDA increased 29% year over year. Electronics organic net sales grew 18%, with every vertical within the segment posting double-digit organic growth. - Semiconductor Solutions organic sales increased 24%. - Assembly Solutions organic sales rose 16%. - Circuitry Solutions organic sales increased 16%. → IonQ's Bold Expansion Could Leave Shareholders Paying the Price Electronics adjusted EBITDA margins, excluding pass-through metals, improved 50 basis points from a year earlier to 28.2%. Dorman attributed the improvement primarily to product mix, including growth in higher-value electronics offerings, as well as contributions from Micromax. In Semiconductor Solutions, Element Solutions cited improved order patterns for power electronics products and increased momentum for thermal-interface materials used in high-power applications such as AI graphics processing units and central processing units. The company also said demand remained strong for advanced packaging products used by Asian outsourced semiconductor assembly and test providers. → Halliburton Gains Traction: Multiyear Upcycle Ahead Circuitry Solutions benefited from demand for board metallization products serving AI infrastructure and high-performance computing. Gliklich said industry forecasts for printed circuit board volume growth in 2026 have risen from about 6% at the start of the year to more than 10%, despite softness in consumer electronics. He said Element Solutions' Circuitry Solutions business has outperformed expected market growth by more than 500 basis points year to date. Micromax contributed nearly $140 million of reported sales during the quarter, about two-thirds of which was related to metals, according to Dorman. He said the acquired business is performing ahead of plan and generated significant revenue and adjusted EBITDA growth. EFC Gases and Advanced Materials contributed $23 million in revenue, up 45% sequentially and 19% year over year, reflecting demand in semiconductor manufacturing, satellite and electrical-infrastructure applications. The company's Specialties segment faced more mixed conditions. Industrial Solutions organic sales grew 3%, primarily because of price increases tied to raw-material cost inflation, while global volumes were roughly flat. Automotive demand modestly improved in Asia and Europe, but other industrial end markets remained soft. Offshore Solutions organic sales declined 13%, reflecting project delays and an equipment failure at a large customer that temporarily shut down the customer's facility. Dorman said the impact was a few million dollars of revenue in the quarter and that the site has returned online. He said the company expects sales to resume most likely in the fourth quarter, with a full recovery expected by the first quarter of 2027. The company also said it won business for what it described as its first, and the industry's first, deep-offshore carbon-capture installation. Management characterized the account as a small current contributor in a nascent market. Adjusted free cash flow was $135 million in the third quarter, rising materially both sequentially and from the prior year. Element Solutions spent $30 million on capital expenditures in the quarter, bringing year-to-date investment to $83 million. The company now expects approximately $110 million in full-year capital expenditures, or less than 3% of expected full-year sales. The investments include manufacturing capacity for engineered preforms, thermal-interface materials and Kuprion ActiveCopper products, as well as local Electronics laboratory operations in India and Southeast Asia. The company broke ground on a new EFC facility in Texas late in the third quarter. Gliklich said Element Solutions achieved two customer qualification milestones for ActiveCopper during the quarter. The company currently produces the product in Fremont, California, is developing a second site in Connecticut and is planning a third site. He said the business could contribute material EBITDA by 2028. Net leverage stood at 2.7 times on a pro forma basis at quarter-end, including full contributions from Micromax and EFC. Element Solutions returned almost $60 million to shareholders during the quarter through dividends and the repurchase of about 1.1 million shares. Gliklich said the company's capital-allocation approach remains unchanged, with continued emphasis on organic investment, bolt-on acquisitions and opportunistic share repurchases. Gliklich also addressed the mutual termination of the proposed Solstice transaction at the end of August. He said management received investor feedback favoring the company's standalone plan, which had been outlined at its May investor day, over alternatives that could introduce complexity and execution risk. "We're doubling down on the culture of entrepreneurship, operational excellence, and prudent capital allocation," Gliklich said. The company is decentralizing its Electronics organization into more autonomous business units aligned with customers. Matt Liebowitz has been named chief operating officer and will oversee Electronics and Specialties business units. Dorman will become president in addition to remaining chief financial officer, with oversight of business functions. Rick Fricke will become an adviser to the company and its Electronics businesses. For the fourth quarter, the company's outlook assumes continued AI-driven electronics investment, normal seasonal patterns and sequential improvement at EFC. Management said the full-year guidance implies adjusted EPS growth of more than 20% in 2026, based on current exchange rates and stable metals prices. Element Solutions Inc (NYSE: ESI) is a specialty chemicals company that develops and produces materials used in electronics manufacturing and a range of industrial applications. Its products are designed to support processes such as printed circuit board fabrication, semiconductor packaging, electronic assembly, metal finishing, and surface treatment. Through its electronics-focused businesses, including MacDermid Alpha Solutions, the company supplies solder materials, electronic assembly chemicals, circuit board materials, and semiconductor packaging solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "What Element Solutions (ESI) Said on Its Q3 Earnings Call" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Mutually terminated the Solstice transaction after shareholder feedback emphasized a preference for the company's standalone trajectory and execution of the May investor day plan. - Achieved record quarterly results driven by robust organic growth in Electronics, particularly within the AI infrastructure supply chain and high-performance data center hardware. - Electronics segment performance has accelerated to the point where it is on pace to deliver adjusted EBITDA equal to the entire company's prior year total. - Strategic positioning in high-value niches like thermal management and advanced packaging is driving double-digit organic sales growth and meaningful margin expansion. - China operations remained a significant growth engine, expanding 30% in the quarter despite broader global macroeconomic uncertainty. - Management is decentralizing the Electronics segment into autonomous business units to improve customer responsiveness and accelerate development cycle times. - Specialties segment faced headwinds from materials inflation and a specific equipment failure at a large offshore customer, though underlying market conditions remain favorable. - Raised full-year adjusted EBITDA guidance to approximately $720 million, assuming continued AI-driven investment and normal seasonal patterns in Q4. - Accelerating capital expenditures to approximately $110 million to build capacity for high-growth product lines, including thermal interface materials and local labs in India and Southeast Asia. - Kuprion ActiveCopper technology is expected to contribute material EBITDA by 2028 following two successful customer qualifications for high-volume manufacturing. - Guidance implies 2026 adjusted EPS growth exceeding 20% year-over-year, supported by stable metal prices and current exchange rates. - Management expects to maintain a net leverage ratio below 3x while remaining opportunistic regarding share repurchases and high-quality bolt-on M&A. - Announced a leadership reorganization: Carey Dorman promoted to President (retaining CFO role) and Matt Liebowitz named COO to oversee the new autonomous business unit structure. - Reported a $140 million revenue contribution from the Micromax acquisition, though roughly two-thirds of this figure is tied to pass-through metal pricing. - Identified a 'lumpy' demand profile in the EFC Gases business due to the timing of satellite launches and semiconductor manufacturing cycles. - Noted that while Southeast Asia investments were originally for geopolitical de-risking, they have transitioned into essential capacity for surging customer demand. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management confirmed that underlying incremental margins reached the mid-40% to 50% range when excluding one-time incentive compensation accruals. - Sustainability is driven by a shift toward higher-value product lines where fewer competitors can meet specific technical requirements. - The shift to autonomous business units is intended to transform the organization from a 'tanker' to a fleet of 'speedboats' to match the accelerating pace of customer innovation. - Management emphasized that this change pushes decision rights deeper into the organization without sacrificing the unified MacDermid Alpha brand. - Management is actively providing solutions for plating on glass and through-glass vias, positioning ActiveCopper as a leading candidate for this emerging technology. - While gaining R&D traction, glass cores are expected to become a material volume driver in the three-to-five-year medium-term horizon rather than the immediate term. - The framework remains unchanged: prioritizing high-quality bolt-on M&A that enhances portfolio quality and opportunistic share repurchases when valuation is attractive. - Management noted the balance sheet is healthier than expected, allowing them to be 'on the offensive' for both M&A and returns to shareholders.

Image source: The Motley Fool. Thu, Oct. 22, 2026 - Chief Executive Officer - Ben Gliklich - Chief Financial Officer - Carey Dorman - Vice President, Strategy and Integration - Varun Gokarn Varun Gokarn: Good morning, and thank you for participating in our third quarter 2026 earnings conference call. Joining me today are our CEO, Ben Gliklich, and CFO, Carey Dorman. In accordance with Regulation FD, we are webcasting this conference call. A replay will be made available in the Investors section of the company's website. During today's call, we will make certain forward-looking statements that reflect our current views about the company's future performance and financial results. These statements are based on assumptions and expectations of future events, which are subject to risks and uncertainties. Please refer to the earnings release, supplemental slides, and most recent SEC filings on our website for a discussion of material risk factors that could cause actual results to differ from our expectations and predictions. Today's materials also include financial information that has not been prepared in accordance with US GAAP. Please refer to the earnings release and supplemental slides for definitions and reconciliations of these non-GAAP measures to comparable GAAP financial measures. It is now my pleasure to introduce our CEO, Ben Gliklich. Ben Gliklich: Thank you, Varun, and good morning, everyone. Thanks for joining. Element Solutions delivered yet another record quarter as we continue to benefit from favorable positions in our end markets, strong execution against our commercial and operational initiatives, and the results of thoughtful, disciplined capital allocation. Before discussing the quarter's performance, let me recap our decision to mutually terminate the proposed transaction with Solstice at the end of August. Our North Star at Element Solutions has always been serving our customers and shareholder value creation. Following the announcement of this proposed transaction, we had constructive discussions with our investors and gained valuable insights into how they'd like us to pursue that North Star. Feedback is a gift, and we were fortunate to receive it. We work for our shareholders, and we value their input. While we stand behind the strategic and financial merits of the Solstice transaction, it became clear that our shareholders valued the standalone trajectory that we articulated in our May investor day. They wanted our team to deliver on our plan. They discounted alternatives, which introduced complexity and execution risk. The feedback we received was a vote of confidence from our shareholders, confidence in management, appreciation for the unique culture we've deliberately developed, and enthusiasm for the portfolio of businesses we've built, attributes that together outweigh the benefits of enhanced scale or synergy capture. Going forward, we're doubling down on the culture of entrepreneurship, operational excellence, and prudent capital allocation that has brought us our historical success. We're committed to continue investing behind our businesses, both organically and through bolt-on M&A. Our Electronics segment this year is on pace to deliver the same amount of adjusted EBITDA that our entire company generated last year. We are increasingly a critical enabler in the electronics ecosystem and becoming even more so as we introduce and acquire new capabilities. To keep up with the rapid pace in our markets, we must evolve, and we're working to accelerate our development cycle time, deepen our technical engagements with key customers, and capitalize on the many opportunities afforded by the breadth of our portfolio. Our confidence in an independent path forward is reinforced by yet another consecutive record quarter and corresponding significant increase in our full-year guidance announced today. Our third quarter results were outstanding. Organic growth remained robust in Electronics, and the Specialties business navigated challenges related to materials inflation and uneven demand dynamics. Our results were again enhanced by strong contributions from recent acquisitions, which position us well in attractive new market adjacencies that are seeing robust growth. Activity accelerated across our supply chain in support of the ongoing AI infrastructure built out. Technical requirements in data center hardware and other high-performance electronics continue to increase, which has driven our offering of critical enabling solutions across thermal management, power density, and advanced packaging applications, to name a few. We're seeing volume growth in the highest value categories across our end markets, from leading-edge semi and high-end circuit board fabs to device assemblers, and a strong pull for innovation to enable greater levels of device performance and manufacturing yield. This dynamic has led to four straight quarters of double-digit organic sales growth and meaningful ex metal margin expansion in our Electronics business. Our profitable growth has allowed us to increase investment in people, technology, and plants, which we expect will reinforce ESI's role in critical emerging applications. Our customers are investing heavily to build capacity ahead of surging demand. We, in turn, have built and continue to build additional manufacturing capacity for several high-growth product lines, including incremental production capability for engineered preform and critical thermal interface products, as well as local laboratory footprints for Electronics in India and Southeast Asia. Where investment in Southeast Asia was intended to de-risk geopolitical concerns two years ago, it's now become much needed additional capacity for our customers. Meanwhile, our business in China remains very strong, growing 30% in the quarter. We've also made substantial investments and financial commitments to scale manufacturing of our Kuprion ActiveCopper products, focused on solving several emerging customer pain points around thermal management, power delivery, and plating copper on challenging substrates. Our development partners are exceptionally enthusiastic about this offering, and they're progressing towards high-volume manufacturing themselves. Progress evidenced by the two customer qualification milestones we achieved in the third quarter. These qualifications from two leading technology providers to the data center ecosystem support our strong conviction in the market opportunity for ActiveCopper and our ability to establish incumbency with this exciting technology. Beyond these investments in organic growth, we continue to reap the fruits of our inorganic strategy. The integrations of Micromax and EFC are going well, and both businesses contributed meaningful adjusted EBITDA growth in the quarter. Our formula of operational excellence and prudent capital allocation drove a 22% increase in adjusted EPS this quarter. Beyond M&A, when we see compelling value in our own shares, we can act opportunistically, given our substantial existing share repurchase authorization. We did so this quarter, reflecting our confidence in the business from here. Carey will now take you through our third-quarter business results in more detail. Carey? Carey Dorman: Thanks, Ben, and good morning, everyone. On slide three, you can see a summary of our third-quarter financial results. We delivered record quarterly revenue, adjusted EBITDA, and adjusted EPS. Organic net sales grew 13%, and constant currency adjusted EBITDA increased 29% year-over-year. Electronics organic net sales growth of 18% was once again broad-based. Each of the segment's verticals grew organically by double digits, led by our Semiconductor business, which grew 24% in the quarter. Adjusted EBITDA margins, excluding pass-through metals, improved 50 basis points year-over-year to 28.2% this quarter. The year-on-year improvement was primarily driven by product mix within the Electronic segment, where organic growth and higher-value product lines drove solid underlying incremental margins in the upper end of our 30%-40% target range, as well as strong performance from Micromax. Softer margins in the Specialty segment were the result of an equipment failure that shut down a large offshore customer, impacting sales in the Energy Solutions business, as well as price cost timing in Industrial Solutions. We expect these dynamics to abate through year-end and into 2027. Both segments also saw margins impacted by higher allocations, primarily from above-target incentive compensation accruals. On slide four, we have additional detail on organic net sales growth. In Electronics, demand remained particularly strong across Semiconductor packaging, advanced PCB chemistries, engineered assembly materials supporting data centers, and power electronics. Reflecting the strength in our markets, industry forecasts for PCB volume growth in 2026 have increased over the course of the year from around 6% in December to over 10% today. This is an acceleration from 2025, and we continue to outperform the market. Semiconductor Solutions organic net sales grew 24%, with improved order patterns for power electronics products and growing momentum in thermal interface materials for high power consumption applications such as AI GPUs and CPUs. Demand also continues to be strong for advanced packaging solutions from Asian OSATs participating in the market. Revenue growth in this business was magnified this quarter by the year-over-year increase in precious metals prices. Our Assembly Solutions business grew 16% organically. Demand was strong for high-reliability solder paste in Asia, which are benefiting from growth in AI power supply, and for preformed products for data center applications. Engineered preformed products such as TruHeight spacers that control thermal warpage on larger chip assemblies continued to gain traction in leading-edge applications, driving acceleration in our capacity expansion plans for next year. Circuitry Solutions grew 16% organically, benefiting from continued demand for board metallization solutions tied to AI infrastructure and high-performance computing. We supported customers as they add capacity and are seeing traction with technologies that are critical to increasingly complex, high-layer count architectures. Micromax contributed nearly $140 million to reported sales in the quarter, roughly 2/3 of which is related to metals. The business continues to perform well ahead of plan and is growing revenue and adjusted EBITDA significantly. We remain very pleased with these results, as well as the response from customers and the progress of the integration. Now turning to our specialty segment, Industrial Solutions grew 3% organically in the quarter, due primarily to price increases tied to raw material cost inflation. Global volumes were roughly flat, with some modest pickup in automotive in both Asia and Europe, while other industrial end markets remained soft. This business has been restructuring aspects of its go-to-market and supply chain strategy over the last year, and we remain focused on strong operational execution and high-quality offerings that meet the evolving needs of customers. Our Offshore Solutions business declined 13% organically, primarily impacted by certain project delays and the aforementioned equipment failure at a large customer. We expect this situation will improve in the coming months as that customer site has already come back online. Overall, market conditions and pricing dynamics remain favorable for this business. Looking forward, we are also excited to announce that we won business on our first, and the industry's first, deep offshore carbon capture installation. This account is a small contributor today and a truly nascent market but may have a bright future. Finally, EFC Gases and Advanced Materials contributed $23 million to revenue this quarter, a 45% sequential improvement from last quarter and a 19% increase year-on-year. Demand within EFC's core semi-manufacturing, satellite, and electrical infrastructure applications is strong, albeit lumpier than many of our other businesses, and the team executed nicely this quarter with new business wins at healthy margins that are above segment averages. We continue to see EFC growing wallet share with existing semiconductor and space customers and winning new qualifications in both. We broke ground on a new facility for this business in Texas late in Q3, which demonstrates our expectation of future growth. Slide five addresses cash flow and the balance sheet. Adjusted free cash flow for the quarter was $135 million, a material sequential and year-over-year increase. This result reflects disciplined inventory management despite increased volumes and continued metals price volatility. Our cash flow generation is typically more second-half weighted, and we expect a similar seasonality this year. Q4 cash flows should also be strong but are unlikely to match Q3 as we ramp certain capital projects and build stock for several capacity expansions and footprint optimization efforts. We invested $30 million into CapEx this quarter, bringing the year-to-date investment to $83 million. As we discussed, we are accelerating investment in high-value product areas such as Kuprion and thermal interface materials for hyperscalers, while at the same time moving forward on existing plant consolidation projects in our industrial solutions supply chain. We now expect CapEx for the year of roughly $110 million, which still constitutes less than 3% of expected full-year sales. These projects are tied to major customer technology roadmaps and come with attractive paybacks that should support long-term earnings growth. Turning to the balance sheet, our net leverage ratio at the end of the quarter was 2.7x on a pro forma basis, including full contributions from Micromax and EFC. We allocated almost $60 million of capital to shareholder returns in the quarter, between our dividend and our opportunistic repurchase of roughly 1.1 million shares. As we entered 2026, we committed to leverage below 3x by year-end, and we are already there, despite ramping CapEx and buybacks. We have capacity to continue to deploy capital should attractive opportunities become available. With that, I will turn the call back to Ben. Ben? Ben Gliklich: Thank you, Carey. Q3 was a great quarter. Our team didn't lose focus despite the noise around the terminated Solstice transaction. We maintained our high standards for execution and performance throughout. We emerged better positioned strategically and with greater clarity and conviction in our path forward. Each of our businesses has identified opportunities and built strategies to deliver substantial profit growth through investments in people and capabilities over a multi-year timeframe. We pride ourselves on customer centricity, and on this front, we're seeing the benefits of persistent investments in technical service capabilities, technology roadmap exchanges, and a focus on customer pain points, where we can improve product performance or customer productivity and yields. Underlying demand in the high-end electronics market remains strong, and the incumbent positions we've established in the fastest-growing, highest-value niches of these markets should continue to serve us well. As a result, we're raising our adjusted EBITDA guidance to approximately $720 million for the full year. Our implied fourth quarter results assume a continuation of AI-driven electronics investment, normal seasonality, and continued sequential acceleration in EFC performance. Our guidance translates to 2026 adjusted EPS growth of north of 20% on a full-year basis, based on current exchange rates and stable metal prices. We have a wealth of opportunities in front of us, and we want to move faster with increased focus and urgency. To accomplish this, we must keep pushing decision rights deeper into the organization to improve customer responsiveness and direct our investment to the right commercial resources. In that context, we're evolving our organizational structure in the electronic segment to further decentralize by forming more autonomous business units aligned with our customers, all of which will still operate under the strong MacDermid Alpha brand. This morning, to support this evolution, we're announcing an organizational change. Our Electronics business units, in addition to our Specialties businesses, will now report into Matt Liebowitz, who is assuming the role of Chief Operating Officer of Element Solutions. Matt's been a key part of the team at Element Solutions for over a decade and will be a terrific partner to our business unit leaders. He has deep business knowledge and relationships, having helped build our portfolio in his role as Head of Strategy and Corporate Development over the years, and is the right person to serve in this critical role as a thought partner and coach to our general managers. Rick Fricke will become an advisor to ESI and our Electronics businesses going forward, and we'll continue to benefit from his expertise, experience, and network. Carey Dorman, who has also been my partner here for over a decade, will become President of Element Solutions, in addition to his role as CFO, with oversight of all of our business functions. Matt, Carey, and I collectively will work with our business unit and functional leaders to ensure that they are working towards the right long-term objectives, that they have the resources they need to win, and that they are held accountable to their goals. Our business units will have even greater autonomy. Our ethos has always been to empower our people to have a maximum impact, and this is one step further in that direction. This autonomy will make us more nimble, and that is essential to keep up with the accelerating rate of change in our markets. In Electronics, we will continue to maintain our strong, unified brand and the ability to offer the breadth of our portfolio to our largest strategic accounts. Element's success to date has been driven by repositioning our company and its resources, primarily our people, regularly to get ahead of the future needs of our markets. Today's organizational change is another example of this. On the topic of people, I am particularly proud of our team this quarter, who navigated a noisy 90 days to deliver our best quarter ever. For now, let me conclude once again by thanking all of our stakeholders for their continued support of Element Solutions, and especially our team, who continue to deliver exceptionally for our customers and shareholders. With that, operator, please open the line for questions. Operator: Thank you. We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. 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 Mike Harrison with Seaport Research Partners. Mike, your line is open. Please go ahead. Mike Harrison: Hi, good morning. Congrats on the nice quarter. Ben Gliklich: Thanks, Mike. Good morning. Mike Harrison: The first question I have is on the Circuitry Solutions business. It really is looking like that business may be showing some acceleration. I was hoping you could give us a little more color on how you see the content opportunity expanding as you get into more multilayer circuit boards, compared to your standard PCB applications. I am just wondering, are there any factors that you see in the market right now that could slow down some of the growth that you're seeing in that advanced circuit board opportunity? Ben Gliklich: Yeah, sure thing. It's a good observation. Our circuitry business is performing exceptionally well. That market overall is substantially outperforming expectations on a volume basis. Entering the year, as Carey said in the prepared remarks, expectations for circuit board volumes were about 6% growth in 2026, and the latest forecast has them bumping up against 10%. Overall, that market is growing, or accelerating, and that's despite the fact that the consumer electronics market is quite soft at the moment. All that growth and then some is coming from the data center market, and those boards are the highest end boards that are being produced today. Multi-layer, very complex. We've got great capabilities to serve that market. Our outperformance in Circuitry Solutions is substantial, more than 500 basis points relative to the expected market growth on a year-to-date basis, and that is driven by our penetration of that technology based on really solid work by the team over the past several years. We expect that to continue. Mike Harrison: All right. It looks like your incremental margin this quarter was pretty strong. I think if we stripped out maybe some of the higher incentive comp. Just wondering if you can help us understand how sustainable the strength in incremental margin could be, and maybe talk about some of the drivers that you see still playing out from a margin standpoint. Carey Dorman: Yeah, Mike, I think it is a great call-out. When you take out the incremental incentive comp accruals, which had an impact of more than 100 basis points across the business year-over-year, we saw really healthy incrementals in the mid-40s% for the whole business or the 50% for the Electronics business. There are a number of things that are playing into that, and I think most importantly is where the growth is coming from. We are continuing to see growth, particularly in Electronics, in the higher end parts of our business as we are meeting specific customer needs, and fewer and fewer of our ecosystem competitors can meet those needs. That is sustainable from our perspective. On the Specialty side of the business, we are working hard in an environment where volumes are relatively muted to make the business better. Even on that business, when you take out this comp accrual and some of the one-time or sort of transitory impacts from raw material inflation, we are seeing underlying margin expansion there, too. So, we guided at the Investor Day at 30%-40% incrementals. We are seeing better than that now, but I think in that high end of that range is something that we expect to see continue into next year. Mike Harrison: All right. Thanks very much. Ben Gliklich: Thanks, Mike. Operator: Your next question comes from the line of John McNulty with BMO Capital Markets. John, your line is open. Please go ahead. John McNulty: Yeah, good morning. Thanks for taking my questions, and congratulations to Carey and Matt on what looks like a nice solid step for them. I guess my first question is to that. I guess what precipitated the change? You had an Investor Day early this year. Obviously, nothing had changed at that point. Is it the pace of the growth is just that much more robust where you feel you need to kind of make these kind of changes? Is it just a follow-up to the Solstice kind of change or shift? I guess, help us to think about what's driving that and the timing for it right now. Ben Gliklich: Yeah. The evolution in our Electronics business has been one of standing up best practices, which required a really strong central pillar of the business, adding new capabilities, and we brought in a great set of leaders on a functional basis to help us build those capabilities and standard processes. We are a dynamic organization. Our Electronics business has more than doubled over the past several years. We have those best practices ingrained in the business, and the autonomy that we are driving into the discrete business units will allow for them to move faster, which is what our customers are asking for from us and from the supply chain. This structural change will turn the analogy of the tanker to the speedboat. I do not think we ever were a tanker, but we are breaking into smaller, faster, more nimble speedboats on a business unit perspective, more customer-aligned, without sacrificing those best practices, without sacrificing the strength of our brand. This is a logical step as the business has scaled and in response to customer feedback across the supply chain, to partner with them and move faster. John McNulty: Got it. Okay. No, that is a helpful color. Then maybe just speaking to the cash flow and balance sheet, really solid 3Q results or numbers, and I understand maybe the cadence that we will not see quite as much in 4Q, but the balance sheet is kind of back to even below your year-end target. When you think about cash uses going forward, I know in the past you have kind of liked to add on bolt-ons, roughly two per year kind of seems to be the cadence. At the same time, your valuation has come in under a reasonable amount of pressure, over the last whatever, three to six months. I guess, how do you think about the prioritization of cash use now, given the cleaner balance sheet, and should we assume it is kind of business as usual, or do we maybe shift away a little bit temporarily from the M&A side and maybe a little bit more into the buybacks, I guess? Can you help us to think about that? Ben Gliklich: Yeah, look, we've always been opportunistic around capital allocation, whether that's buying our own shares or outbound M&A. We're in a really strong position from a portfolio perspective that there's nothing we need to own. But we've got a great footprint and brand where the things we add, if they're quality enhancing, we only add quality-enhancing businesses, are better inside of our business than outside. Our framework for capital allocation is unchanged today. You saw we were on the front foot buying shares in the third quarter. Our balance sheet is healthier than we expected it to be at this point in the year, given the earnings trajectory, and so we're on the offensive. John McNulty: Great. Thanks very much for the color. Operator: Your next question comes from the line of Josh Spector with UBS. Josh, your line is open. Please go ahead. Josh Spector: Yeah. Hey, good morning, guys. I wanted to ask on Kuprion, just it seemed like some of your incremental CapEx is targeted there. Can you talk about what you're accelerating and just remind us kind of the milestones and timelines on some of your expansions in the next couple of years, please? Ben Gliklich: Yeah, absolutely. Kuprion's a great story, as evidenced by the two qualification milestones achieved in the third quarter. Those are two customers, really high-tech, leading-edge customers, who have qualified ActiveCopper for their high-volume manufacturing. That's the precursor to the revenue ramp that we expect next year. Our first site is producing in Fremont, California. Our second site is underway in Connecticut, and the plans for the third site are also underway. The supply chain is not quite caught up to where we see demand going, but we will be in a position, call it late 2027, early 2028, and we'll have multiple sites supplying multiple customers who are very eager to integrate ActiveCopper into their manufacturing processes. It is on track with what we had committed to, maybe even ahead when you think about the medium-term horizon. This business has tremendous potential, and is going to be contributing material EBITDA when we get into 2028, for sure. Josh Spector: Thanks for that, Ben. If I could just ask quickly just on EFC, I think you noted some sequential acceleration, and growth was pretty strong there in the quarter. What's driving that? Ben Gliklich: It's a lumpier business than some of our others, just given you get big orders tied to certain satellite launches. The core businesses around semiconductor and electrical infrastructure are also growing really nicely. The cadence of earnings is something we're still wrapping our hands around. But the growth in this business that we expected is delivering, and the outlook is probably better, frankly, based on the pipeline we've seen. We're adding capacity there as well. That's a contributor to CapEx in 2026 and into 2027 in response to really strong customer pull. Josh Spector: Okay, thank you. Operator: Your next question comes from the line of John Roberts with Mizuho. John, your line is open. Please go ahead. John Roberts: Thanks, and congratulations on the promotions. More work, same pay. During the quarter, or well, actually, the temperatures of these latest chips are starting to warp some of the plastic circuit boards. During the quarter, Corning was discussing glass cores potentially replacing some of the plastic. I think one of your competitors announced some product lines for plating circuitry on glass. Could you talk a little bit about that opportunity and how ESI is positioned? Ben Gliklich: Yeah, it's a good call-out. The pace of innovation in the supply chain is accelerating, and folks are working with new materials, and we're at the table providing solutions to enable those new materials. So, our circuitry portfolio has very solid solutions for plating on glass through glass vias. ActiveCopper is also one of the leading candidates to solve that problem for the supply chain. It's a big opportunity for us. We're very well-positioned across the Wafer-Level Packaging and Circuitry businesses. John Roberts: Do you have a sense of when first introduction might be? Ben Gliklich: Look, the idea of glass cores has been in the ether for several years. It's been pushed out a few times. It does seem to be gaining traction based on our R&D projects and applications development projects. I'm not counting on it becoming a material volume driver in the near term, but over a medium-term horizon, call it three to five years out, I think it could be quite substantial. John Roberts: Thank you. Operator: Your next question comes from the line of Chris Parkinson with Wolfe Research. Chris, please go ahead. Chris Parkinson: Great. Thank you so much. Ben, can you just offer some insights in terms of the year-end 2026 and into 2027 trajectories for the volume side of Micromax as well as Semi? Obviously, it seems like things have generally been trending better than expected throughout the year. I would love to get your insights on how you're thinking about the volume side of that versus the price of the product mix, and especially in Micromax, and just how you're delineating all those details in terms of how you think about growth for the next six to nine months. Thanks. Ben Gliklich: Yeah. So, thanks for the question. The first comment is really no diminution or erosion in demand. Clearly, there's some volatility in the capital markets and headlines, but from a commercial market industry perspective, we've seen no diminution over the past several months, and Q4 is off to a solid start. By and large, with the exception of metal price volatility in all of our businesses, the growth has come from volume primarily, and with the exception also of Micromax, where we're seeing an uplift in higher value volume and a little bit of a diminution in, I'll call it lower value volume that skews towards automotive applications. So, it's a volume story on the electronic side and everything but Micromax. That's what we would continue to expect through Q4. Really nothing material changing in terms of the demand drivers for these businesses. Chris Parkinson: Got it. Just circling back just for detail on John's question, when you think about the M&A side of it, are you primarily assessing it? In your commentary, you basically said your teams haven't necessarily missed a beat. When you're looking at that, are you looking at adding kind of another tangential pillar, or is it something, are all the assets that you're ongoingly assessing, primarily augmenting something that is something for Assembly or Circuitry or anything like that? I would love to hear your perspective on strategy within that a little bit in further detail. Thank you. Ben Gliklich: Yeah. So, the M&A criteria is unchanged. We want to back our businesses. Point of emphasis in Electronics, buying businesses that are better inside of our company than outside, meaning there's some synergy, and make our company better. Meaning they enhance the overall quality of the portfolio, they enhance our value proposition to our customers, they create opportunities for our people, and they enhance shareholder value. So, we're looking at Electronics assets primarily. Those could be consolidating markets, and those could be adding new capabilities that broaden our offering to our customers. Only high-quality businesses that really fit within what we do today. But there aren't an enormous number of such assets. We're a great buyer of them, and we're in a good position to prosecute those transactions. Of course, those opportunities don't come around every day. Chris Parkinson: Thank you. Operator: Your next question comes from the line of Matt DeYoe with Bank of America. Matt, your line is open. Please go ahead. Fabian Jimenez: Good morning. This is Fabian Jimenez on for Matt. Level setting on 4Q, the $720 million EBITDA guide includes around $7 million of January Micromax contribution from before the close of the deal. Does your Q4 guide imply roughly $176 million versus the $183 million we are seeing consensus is reflecting? Also, with your customers still adding capacity, is this a step down in Micromax giving back on silver-driven pricing or just conservatism? Carey Dorman: Okay. Just to be clear, that $175 million, $176 million is a reasonable number to back into, and in the slides as well. We typically see sequential softness seasonally from Q3 to Q4. The last two years was around $10 million-$15 million. This guide sequentially implies that same $15 million. There is nothing that we are seeing in terms of underlying demand. It is really just operating days in some of the businesses that tend to shut down as we get to the holiday season, and a little bit of conservatism. I think there is nothing structural from a demand perspective or assumptions around pricing in any of the businesses. Fabian Jimenez: Thank you. Operator: Your next question comes from the line of Pete Osterland with Truist Securities. Pete, your line is open. Please go ahead. Pete Osterland: Hey, good morning. Thanks for taking the questions. First, I just wanted to ask about your outlook for Electronics momentum to continue into 2027. I guess could you just give some more color on the visibility you have into next year. Is it supported by customer commitments or order patterns, new product ramps, and also just how broad is the strength you're expecting outside of the AI infrastructure market? Ben Gliklich: Thanks for the question, Pete. We like to say that the world doesn't change from December 31st to January 1st, right? The trends that we see through Q4 should continue through Q1. As we said earlier, we really see no evidence of an erosion or a diminution in demand over the past several weeks. The business is unit-driven, and the demand driver for those units is more tangible or longer-term today as we've seen this transition to B2B demand from B2C demand than it's been in the past. Our customer order forecasts have only accelerated over the course of the year. Outlook for the industry from market research has only accelerated over the year. It is more AI-driven than consumer-driven. Some of the weakness in consumer is driven by the strength in AI, bear in mind. But as we sit here today, the outlook, the capital plans, remain robust into 2027. Pete Osterland: Okay, great. Then just as a follow-up, wanted to ask on the Specialties segment. Just wanted to break down the organic growth you saw in Industrial for the quarter. I guess first, how much would pricing have had to go up to fully offset the cost inflation you saw in the quarter? Then maybe if you could comment on what volume growth was in the quarter and what you are expecting near term for demand in that business. Carey Dorman: Sure. So first, on the price-cost dynamic there, we took pricing that drove about 3% or 3%-4% of revenue growth. Volumes across the business were overall flat. I will talk about the mix of that in a second. That offset almost all of the price inflation we saw, maybe $1 million or $2 million of wiggle between cost and price that we should continue to pick up. So you just saw the percent impact on margin there as opposed to really profit dollars. When you think about volumes, it is a tale of two business, sort of two end markets and a regional mix. So automotive generally was slightly positive volumetrically, and you see that in the end market as well, where our general Industrial construction markets were down more materially. Then again, we saw some strength in the Asian business and some weakness in the European business. Those are trends that are sort of following the broader macros, and we expect that more of the same, frankly, into Q4. Pete Osterland: Great. Thanks very much. Operator: Your next question is from the line of John Tanwanteng with CJS Securities. John, your line is open. Please go ahead. John Tanwanteng: Hi, good morning and congrats on the nice quarter and outlook, and it's good to be working with you guys a little longer. Ben Gliklich: Thanks, John. John Tanwanteng: I was wondering if you could talk a little bit more about how you expect your performance to track against the data center end markets through the year-end and into next year. I think earlier you mentioned you've been outperforming the volume growth in Circuitry by 500 basis points or more. Does that spread remain consistent as you go forward, or does it expand with new products and share gain, or does it contract, in your opinion, for any reason? Ben Gliklich: Our guidance, or rather our long-term expectation, is for our business to outperform end markets by a point or two. We're outperforming that today. I'd like to think it's sustainable, but for the sake of conservatism and not knowing where the sources of growth will be over the long term, I still think that 2% outperformance is a reasonable baseline for us to shoot for, to commit to rather. But insofar as the primary driver of growth in the near term is the data center market, given our position within these really high-end circuit boards, our outperformance should continue to outpace that target. John Tanwanteng: Okay, great. Thank you. Then, Carey, if you could disclose how much your energy customer that had the outage in the quarter, how much did that impact the business, and how does it impact the guidance this year, and when do you expect the full recovery? Carey Dorman: Yeah. So it's a few million dollar impact in the quarter. As we mentioned, again, in our prepared remarks, that customer is already back online and working through product that they had of ours. So, we expect to resume selling to that customer either most likely in Q4. So, you should see the full recovery of that by Q1 of next year. John Tanwanteng: Got it. That few million was EBITDA or revenue impact? Carey Dorman: That is a revenue impact. John Tanwanteng: Understood. Thank you, guys. Ben Gliklich: Thanks, John. Operator: Your next question is from the line of Aleksey Yefremov with Barclays. Aleksey, your line is open. Please go ahead. Aleksey Yefremov: Thanks. Good morning, everyone. I apologize for long-winded questions. It's a bit more big picture maybe for you, Ben. Your growth has clearly inflected this year, but it seems like there's also a lot of investment on the part of your customers into advanced packaging and other PCB capacity, et cetera. How should we think about where you are in that growth cycle? Are we still very early and the major inflection is still ahead? Are we in the middle of it? What do you think? Ben Gliklich: Yeah, it's a good question. The pace of innovation is accelerating. We're benefiting from a ramp in customer capacity, which we expect to continue. Leading-edge technologies are still representing a rather small percentage of overall volume, and that's where the investment is going, and we should participate disproportionately in those leading-edge applications. The law of large numbers also begins to apply, and so our growth rate, if it maintains at levels that we've seen this year, is adding far more dollars, simply put. I think in order to sustain this level of growth, we'll need to see the capacity investments that we are seeing persist for several years. The roadmaps from our customers are supporting that. If anything, they're supporting incremental investment relative to what they invested today. We're incredibly optimistic. The outlook for this business has only gotten better since our May investor day. Aleksey Yefremov: Thanks, Ben, and if I may follow up, I'm not sure if you already talked about your Advanced Packaging growth rate, if you could just give us some pointers there, and also, how did your HDI server board business grow this quarter? Ben Gliklich: Yeah. Advanced packaging sales sit in both our Circuitry business and our Semi business, and sales into those applications certainly exceeded the overall growth rate for those businesses in the quarter. The HDI market, that is what I was talking about, these really high-end circuit boards that are serving data center applications. Again, if you think about the consumer electronics market being down year-over-year and our Circuitry business being up 16%, you can extrapolate that we are seeing north of 20% growth in those applications. Aleksey Yefremov: Thanks a lot, Ben. Ben Gliklich: Sure thing. Operator: Your next question is from the line of Laurence Alexander with Jefferies. Laurence, your line is open. Please go ahead. Laurence Alexander: So good morning. I just wanted to flesh out one of the comments you made earlier about the pipeline you are seeing in terms of investments from your customers and visibility. When you look out to 2028, do you see any factors that would make 2028 a more difficult year than 2027? It sounds like you will actually have a net acceleration as an initial bias based on both your investments and what your customers are giving you in terms of their project timelines. Can you just give your initial thoughts on that? Ben Gliklich: Yeah. It is a fair observation based on the order patterns, or rather, the industry forecasts for capital and fab capacity, right? If that capital is invested, the business should continue to accelerate into 2028. For us, that is enhanced by Kuprion, which should be a much, much bigger business by then. On the other hand, we are unit-driven, and as we saw this year, order forecasts change. This year, they changed for the better. There is reason to believe that can continue, but we have seen that change in the past. So, I am not prepared today to talk to 2028 demand. I am comfortable outlining strength exiting 2026 and well into 2027. That outlook is much more firm and very solid. Laurence Alexander: Thank you. Operator: This concludes our question-and-answer period. At this time, I will now turn the call back to CEO Ben Gliklich for closing remarks. Ben Gliklich: Excellent. Thank you, and thanks to everybody for joining. We look forward to seeing you on the road in the days and weeks to come. So long. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Element Solutions, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Element Solutions wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Element Solutions (ESI) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

- Net sales of $995 million, representing 52% growth on a reported basis and 13% organic growth from the third quarter of 2025 - Reported net income of $66 million, compared to $39 million in the same period last year - Adjusted EBITDA of $191 million, representing 29% constant currency growth - Third quarter 2026 Cash flows from operating activities of $159 million and free cash flow of $135 million - Increasing 2026 Adjusted EBITDA guidance to approximately $720 million MIAMI, October 21, 2026--(BUSINESS WIRE)--Element Solutions Inc (NYSE:ESI) ("Element Solutions" or the "Company"), a global and diversified specialty chemicals technology company, today announced its financial results for the three and nine months ended September 30, 2026. Executive Commentary Chief Executive Officer Benjamin Gliklich commented, "Our team continued to execute exceptionally well and delivered another quarter of record results. We are translating the tailwinds in the Electronics market to profitable growth, and seizing the opportunities created by the pace of technological change to gain market share. Demand across AI infrastructure and other high-performance electronics applications drove broad-based double-digit organic growth in each of our Electronics verticals. This growth is the product of several years of focused investment in technology, customer engagement, capacity expansion and operational excellence, which have strengthened our competitive position in the fastest-growing and highest-value areas of the electronics ecosystem. As our customers continue to build capacity and our supply chain continues to bring forward advanced technologies, we are investing alongside them. We are accelerating our own innovation, adding capacity in high-growth product lines and deepening strategic supply chain relationships to continue delivering for our customers and shareholders." Mr. Gliklich continued, "I am particularly proud of this quarter's results considering the risk of distraction from the proposed and subsequently terminated Solstice transaction. Our team did not miss a step. Reinforced by yet another consecutive record quarter, we are moving forward with greater focus, urgency and confidence. Our standalone, independent trajectory has only improved, and, as a result, we are raising our 2026 adjusted EBITDA guidance to approximately $720 million. This should translate to adjusted EPS growth in excess of 20% for the full year, driven by sustained momentum in Electronics and meaningful contributions from our recent acquisitions. Our formula of operational excellence and prudent capital allocation continues to deliver." Third Quarter 2026 Highlights (compared with third quarter 2025) - Net sales on a reported basis for the third quarter of 2026 were $995 million, an increase of 52% over the third quarter of 2025. Organic net sales increased 13%. - Electronics: Net sales increased 68% to $780 million, including 30% from acquisitions. Organic net sales increased 18%. - Specialties: Net sales increased 13% to $216 million, including 12% from acquisitions net of divestitures. Organic net sales increased 1%. - Third quarter of 2026 earnings per share (EPS) performance: - GAAP diluted EPS was $0.27, as compared to $0.16 for the same period last year. - Adjusted EPS was $0.50, as compared to $0.41 for the same period last year. - Reported net income for the third quarter of 2026 was $66 million, as compared to $39 million for the third quarter of 2025, an increase of 67%. - Net income margin increased by 60 basis points to 6.6%. - Adjusted EBITDA for the third quarter of 2026 was $191 million, as compared to $147 million for the third quarter of 2025. On a constant currency basis, adjusted EBITDA increased 29%. - Electronics: Adjusted EBITDA was $148 million, an increase of 46%. On a constant currency basis, adjusted EBITDA increased 45%. The Micromax business had a positive impact of 19% on constant currency adjusted EBITDA growth. - Specialties: Adjusted EBITDA was $43 million, a decrease of 6%. On a constant currency basis, adjusted EBITDA decreased 6%. The EFC Gases & Advanced Materials business had a positive impact of 16% on constant currency adjusted EBITDA growth. - Adjusted EBITDA margin increased by 50 basis points to 28.2%. Updated 2026 Guidance The Company now expects full year 2026 adjusted EBITDA to be approximately $720 million, inclusive of full year contributions from the Micromax and EFC acquisitions and assuming stable exchange rates and metal prices, and an adjusted EPS growth rate of over 20% for the full year. Recent Developments Solstice Transaction - On July 6, 2026, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Solstice. On August 27, 2026, the Company and Solstice entered into a Termination Agreement pursuant to which the parties mutually agreed to terminate the Merger Agreement, which, subject to customary exceptions, mutually released the parties from any claims of liability to one another relating to the contemplated merger transaction. Conference Call Element Solutions will host a webcast/dial-in conference call to discuss its 2026 third quarter financial results at 8:30 a.m. (Eastern Time) on Thursday, October 22, 2026. Participants on the call will include Chief Executive Officer Benjamin H. Gliklich and Chief Financial Officer Carey J. Dorman. To listen to the call by telephone, please dial +1 833-461-5787 and provide the Conference ID: 705 163 823. The call will be simultaneously webcast at www.elementsolutionsinc.com. A replay of the call will be available after completion of the live call at www.elementsolutionsinc.com. About Element Solutions Element Solutions Inc is a leading global specialty chemicals technology company whose businesses supply a broad range of solutions that enhance the performance of products people use every day. Developed in multi-step technological processes, these innovative solutions enable customers' manufacturing processes in multiple high-value industries, including semiconductor fabrication, high-performance computing, automotive systems, consumer electronics, power electronics, communications and data storage infrastructure, aerospace and defense, industrial surface finishing and offshore energy. More information about the Company is available at www.elementsolutionsinc.com. Forward-Looking Statements This release is intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995 as it contains "forward-looking statements" within the meaning of the federal securities laws. These statements will often contain words such as "expect," "anticipate," "project," "will," "should," "believe," "intend," "plan," "assume," "estimate," "predict," "seek," "continue," "outlook," "may," "might," "aim," "can have," "likely," "potential," "target," "hope," "goal," "priority," "guidance" or "confident" and variations of such words and similar expressions. Examples of forward-looking statements include, but are not limited to, statements, beliefs, projections and expectations regarding the Company's investments; customer innovation; expected benefits of recent acquisitions, including their contributions to the Company's full year 2026 adjusted EBITDA; metals prices volatility; foreign exchange rate fluctuations; capital deployment; profitability; market trends, conditions and demand expectations; full year 2026 guidance for adjusted EBITDA; and full year 2026 adjusted EPS growth expectations. These projections and statements are based on management's estimates, assumptions or expectations with respect to future events and financial performance, and are believed to be reasonable, though are inherently uncertain and difficult to predict. Such projections and statements are based on the assessment of information available as of the current date, and the Company does not undertake any obligations to provide any further updates. Actual results could differ materially from those expressed or implied in the forward-looking statements if one or more of the underlying estimates, assumptions or expectations prove to be inaccurate or are unrealized. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, the war in Ukraine, the Iran conflict and other hostilities in the Middle-East as well as actions in response thereto and their impact on market conditions and the global economy; increases in tariffs and/or imposition of new tariffs and other changes in trade policy, in the U.S. and other countries, and other economic factors that may affect cost structure and demand, including the cost and availability of raw materials and precious metals; capital requirements and need for and availability of financing; the impact of government regulations on our ability to conduct operations; the impact of changes to privacy, cybersecurity, environmental, global trade, tax and other governmental regulations; impairments, including those on goodwill and other intangible assets; price volatility and cost environment; inflation and fluctuations in foreign exchange rates; the Company's liquidity, cash flows and capital allocation; funding sources; capital expenditures; outstanding debt and debt leverage ratio; shares repurchases; debt and/or equity issuance or retirement; expected returns to stockholders; and the impact of acquisitions, divestitures, restructurings, refinancings, impairments and other unusual items, including the Company's ability to integrate and obtain the anticipated benefits, results and synergies from these items or other related strategic initiatives. Additional information concerning these and other factors that could cause actual results to vary is, or will be, included in the Company's periodic and other reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. ELEMENT SOLUTIONS INCCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited) | Three Months Ended September 30, | | Nine Months Ended September 30, (dollars in millions, except per share amounts) | | 2026 | | | | 2025 | | | | 2026 | | | | 2025 | Net sales | $ | 995.3 | | | $ | 656.1 | | | $ | 2,813.2 | | | $ | 1,875.0 | Cost of sales | | 652.9 | | | | 379.1 | | | | 1,814.1 | | | | 1,081.1 | Gross profit | | 342.4 | | | | 277.0 | | | | 999.1 | | | | 793.9 | Operating expenses: | | | | | | | Selling, technical, general and administrative | | 205.6 | | | | 158.1 | | | | 597.5 | | | | 471.2 | Research and development | | 22.9 | | | | 18.1 | | | | 62.6 | | | | 50.2 | Total operating expenses | | 228.5 | | | | 176.2 | | | | 660.1 | | | | 521.4 | Operating profit | | 113.9 | | | | 100.8 | | | | 339.0 | | | | 272.5 | Other (expense) income: | | | | | | | Interest expense, net | | (22.8 | ) | | | (13.3 | ) | | | (68.3 | ) | | | (40.5 | ) Foreign exchange gains (losses) | | 6.0 | | | | (11.0 | ) | | | 11.8 | | | | (34.4 | ) Other (expense) income, net | | (3.8 | ) | | | (14.0 | ) | | | 0.6 | | | | (22.6 | ) (Loss) gain on divestitures | | — | | | | (7.0 | ) | | | — | | | | 59.6 | Total other expense | | (20.6 | ) | | | (45.3 | ) | | | (55.9 | ) | | | (37.9 | ) Income before income taxes and non-controlling interests | | 93.3 | | | | 55.5 | | | | 283.1 | | | | 234.6 | Income tax expense | | (27.6 | ) | | | (16.2 | ) | | | (84.1 | ) | | | (49.8 | ) Net income | | 65.7 | | | | 39.3 | | | | 199.0 | | | | 184.8 | Net income attributable to non-controlling interests | | — | | | | — | | | | (0.1 | ) | | | (0.1 | ) Net income attributable to common stockholders | $ | 65.7 | | | $ | 39.3 | | | $ | 198.9 | | | $ | 184.7 | | | | | | | | Earnings per share | | | | | | | Basic | $ | 0.27 | | | $ | 0.16 | | | $ | 0.82 | | | $ | 0.76 | Diluted | $ | 0.27 | | | $ | 0.16 | | | $ | 0.82 | | | $ | 0.76 | | | | | | | | Weighted average common shares outstanding | | | | | | | Basic | | 243.5 | | | | 241.6 | | | | 243.5 | | | | 242.0 | Diluted | | 243.7 | | | | 242.0 | | | | 243.8 | | | | 242.4 | ELEMENT SOLUTIONS INCCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited) | September 30, | | December 31, (dollars in millions) | | 2026 | | | | 2025 | Assets | | | Cash and cash equivalents | $ | 224.9 | | | $ | 626.5 | Accounts receivable, net of allowance for doubtful accounts of $9.4 and $9.4 at September 30, 2026 and December 31, 2025, respectively | | 736.1 | | | | 517.7 | Inventories | | 409.4 | | | | 294.7 | Prepaid expenses | | 45.7 | | | | 28.3 | Other current assets | | 160.4 | | | | 115.3 | Total current assets | | 1,576.5 | | | | 1,582.5 | Property, plant and equipment, net | | 425.8 | | | | 319.6 | Goodwill | | 2,548.7 | | | | 2,241.9 | Intangible assets, net | | 987.3 | | | | 657.2 | Deferred income tax assets | | 162.9 | | | | 175.5 | Other assets | | 160.0 | | | | 124.7 | Total assets | $ | 5,861.2 | | | $ | 5,101.4 | Liabilities and stockholders' equity | | | Accounts payable | $ | 199.2 | | | $ | 165.5 | Current installments of long-term debt and revolving credit facilities | | 27.9 | | | | — | Accrued expenses and other current liabilities | | 339.5 | | | | 264.4 | Total current liabilities | | 566.6 | | | | 429.9 | Debt | | 2,054.2 | | | | 1,625.9 | Pension and post-retirement benefits | | 22.2 | | | | 22.3 | Deferred income tax liabilities | | 104.5 | | | | 93.1 | Other liabilities | | 226.6 | | | | 240.8 | Total liabilities | | 2,974.1 | | | | 2,412.0 | Stockholders' equity | | | Common stock: 400.0 shares authorized (2026: 270.6 shares issued; 2025: 269.6 shares issued) | | 2.7 | | | | 2.7 | Additional paid-in capital | | 4,319.6 | | | | 4,279.2 | Treasury stock (2026: 28.0 shares; 2025: 26.9 shares) | | (431.8 | ) | | | (393.9 | ) Accumulated deficit | | (765.6 | ) | | | (904.6 | ) Accumulated other comprehensive loss | | (252.3 | ) | | | (308.9 | ) Total stockholders' equity | | 2,872.6 | | | | 2,674.5 | Non-controlling interests | | 14.5 | | | | 14.9 | Total equity | | 2,887.1 | | | | 2,689.4 | Total liabilities and stockholders' equity | $ | 5,861.2 | | | $ | 5,101.4 | ELEMENT SOLUTIONS INCCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) | Three Months Ended | | | Nine Months Ended | | | September 30, (dollars in millions) | September 30,2026 | | June 30,2026 | | March 31, 2026 | | | | 2026 | | | | 2025 | Cash flows from operating activities: | | | | | | | | | | Net income | $ | 65.7 | | | $ | 77.3 | | | $ | 56.0 | | | | $ | 199.0 | | | $ | 184.8 | Reconciliation of net income to net cash flows provided by (used in) operating activities: | | | | | | | | | | Depreciation and amortization | | 45.1 | | | | 44.7 | | | | 42.5 | | | | | 132.3 | | | | 114.0 | Deferred income taxes | | (2.1 | ) | | | (1.0 | ) | | | 1.7 | | | | | (1.4 | ) | | | (16.2 | ) Foreign exchange (gains) losses | | (8.3 | ) | | | (9.1 | ) | | | (0.3 | ) | | | | (17.7 | ) | | | 28.6 | Incentive stock compensation | | 18.2 | | | | 12.6 | | | | 8.1 | | | | | 38.9 | | | | 15.8 | Gain on divestitures | | — | | | | — | | | | — | | | | | — | | | | (59.6 | ) EFC contingent consideration | | (5.9 | ) | | | 3.4 | | | | 5.9 | | | | | 3.4 | | | | — | Other, net | | 2.7 | | | | 3.7 | | | | 5.4 | | | | | 11.8 | | | | 9.7 | Changes in assets and liabilities, net of acquisitions and divestitures: | | | | | | | | | | Accounts receivable | | (23.9 | ) | | | (31.6 | ) | | | (81.8 | ) | | | | (137.3 | ) | | | (49.6 | ) Inventories | | 7.9 | | | | 4.6 | | | | (93.2 | ) | | | | (80.7 | ) | | | (35.0 | ) Accounts payable | | 11.5 | | | | 6.9 | | | | 11.3 | | | | | 29.7 | | | | 15.8 | Accrued expenses | | 36.6 | | | | 5.5 | | | | 7.0 | | | | | 49.1 | | | | (16.5 | ) Prepaid expenses and other current assets | | (8.5 | ) | | | (14.3 | ) | | | (11.8 | ) | | | | (34.6 | ) | | | (14.4 | ) Other assets and liabilities | | 20.2 | | | | (3.1 | ) | | | (17.4 | ) | | | | (0.3 | ) | | | 21.3 | Net cash flows provided by (used in) operating activities | | 159.2 | | | | 99.6 | | | | (66.6 | ) | | | | 192.2 | | | | 198.7 | Cash flows from investing activities: | | | | | | | | | | Capital expenditures | | (30.4 | ) | | | (27.9 | ) | | | (25.1 | ) | | | | (83.4 | ) | | | (45.2 | ) Proceeds from disposal of property, plant and equipment | | — | | | | — | | | | — | | | | | — | | | | 0.8 | Proceeds from divestitures (net of cash of $2.5 million) | | — | | | | — | | | | — | | | | | — | | | | 323.8 | Acquisitions, net of cash acquired | | — | | | | (1.6 | ) | | | (864.2 | ) | | | | (865.8 | ) | | | — | Other, net | | 0.1 | | | | 0.1 | | | | — | | | | | 0.2 | | | | 25.5 | Net cash flows (used in) provided by investing activities | | (30.3 | ) | | | (29.4 | ) | | | (889.3 | ) | | | | (949.0 | ) | | | 304.9 | Cash flows from financing activities: | | | | | | | | | | Debt proceeds, net of discount | | — | | | | — | | | | 449.4 | | | | | 449.4 | | | | — | Repayments of borrowings | | (3.2 | ) | | | (3.2 | ) | | | — | | | | | (6.4 | ) | | | (202.6 | ) Changes in lines of credit, net | | (35.0 | ) | | | (35.0 | ) | | | 85.0 | | | | | 15.0 | | | | — | Repurchases of common stock | | (37.7 | ) | | | — | | | | — | | | | | (37.7 | ) | | | (19.4 | ) Dividends | | (19.5 | ) | | | (19.6 | ) | | | (20.2 | ) | | | | (59.3 | ) | | | (58.4 | ) Payment of financing fees | | — | | | | — | | | | (6.1 | ) | | | | (6.1 | ) | | | — | Other, net | | 0.1 | | | | 0.4 | | | | (0.3 | ) | | | | 0.2 | | | | (0.7 | ) Net cash flows (used in) provided by financing activities | | (95.3 | ) | | | (57.4 | ) | | | 507.8 | | | | | 355.1 | | | | (281.1 | ) Effect of exchange rate changes on cash and cash equivalents | | 1.7 | | | | (0.5 | ) | | | (1.1 | ) | | | | 0.1 | | | | 12.4 | Net increase (decrease) in cash and cash equivalents | | 35.3 | | | | 12.3 | | | | (449.2 | ) | | | | (401.6 | ) | | | 234.9 | Cash and cash equivalents at beginning of period | | 189.6 | | | | 177.3 | | | | 626.5 | | | | | 626.5 | | | | 359.4 | Cash and cash equivalents at end of period | $ | 224.9 | | | $ | 189.6 | | | $ | 177.3 | | | | $ | 224.9 | | | $ | 594.3 | ELEMENT SOLUTIONS INCADDITIONAL FINANCIAL INFORMATION(Unaudited) I. SUMMARY RESULTS | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, (dollars in millions) | | 2026 | | | 2025 | | Reported | | Constant Currency | | Organic | | | 2026 | | | 2025 | | Reported | | Constant Currency | | Organic Net Sales Electronics | $ | 779.6 | | $ | 465.2 | | 68 | % | | 68 | % | | 18 | % | | $ | 2,180.1 | | $ | 1,298.9 | | 68 | % | | 66 | % | | 18 | % Specialties | | 215.7 | | | 190.9 | | 13 | % | | 14 | % | | 1 | % | | | 633.1 | | | 576.1 | | 10 | % | | 8 | % | | 2 | % Total | $ | 995.3 | | $ | 656.1 | | 52 | % | | 52 | % | | 13 | % | | $ | 2,813.2 | | $ | 1,875.0 | | 50 | % | | 48 | % | | 13 | % | | | | | | | | | | | | | | | | | | | Net Income | | | | | | | | | | | | | | | | | | | Total | $ | 65.7 | | $ | 39.3 | | 67 | % | | | | | | $ | 199.0 | | $ | 184.8 | | 8 | % | | | | | | | | | | | | | | | | | | | | | | | Adjusted EBITDA Electronics | $ | 148.3 | | $ | 101.5 | | 46 | % | | 45 | % | | | | $ | 408.9 | | $ | 286.9 | | 43 | % | | 40 | % | | Specialties | | 42.7 | | | 45.4 | | (6 | )% | | (6 | )% | | | | | 127.9 | | | 124.4 | | 3 | % | | 0 | % | | Total | $ | 191.0 | | $ | 146.9 | | 30 | % | | 29 | % | | | | $ | 536.8 | | $ | 411.3 | | 31 | % | | 28 | % | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2026 | | | | 2025 | | | Change | | | 2026 | | | | 2025 | | | Change Net Sales ex-Metals | | | | | | Electronics | $ | 779.6 | | | $ | 465.2 | | | 68 | % | | $ | 2,180.1 | | | $ | 1,298.9 | | | 68 | % Pass-through Metals | | 318.5 | | | | 125.0 | | | 155 | % | | | 891.6 | | | | 339.7 | | | 162 | % Electronics ex-Metals | $ | 461.1 | | | $ | 340.2 | | | 36 | % | | $ | 1,288.5 | | | $ | 959.2 | | | 34 | % | | | | | | | | | | | Total Net Sales | $ | 995.3 | | | $ | 656.1 | | | 52 | % | | $ | 2,813.2 | | | $ | 1,875.0 | | | 50 | % Pass-through Metals | | 318.5 | | | | 125.0 | | | 155 | % | | | 891.6 | | | | 339.7 | | | 162 | % Net Sales ex-Metals | $ | 676.8 | | | $ | 531.1 | | | 27 | % | | $ | 1,921.6 | | | $ | 1,535.3 | | | 25 | % | | | | | | | | | | | Net Income Margin | | | | | | Total | | 6.6 | % | | | 6.0 | % | | 60bps | | | 7.1 | % | | | 9.9 | % | | (280)bps | | | | | | | | | | | Adjusted EBITDA Margin | | | | | | Electronics | | 32.2 | % | | | 29.9 | % | | 230bps | | | 31.7 | % | | | 29.9 | % | | 180bps Specialties | | 19.8 | % | | | 23.7 | % | | (390)bps | | | 20.2 | % | | | 21.6 | % | | (140)bps Total | | 28.2 | % | | | 27.7 | % | | 50bps | | | 27.9 | % | | | 26.8 | % | | 110bps II. CAPITAL STRUCTURE (dollars in millions) | | | Maturity | | Interest Rate | | September 30, | | | | | 2026 Instrument | | | | | | | Corporate Revolver | | | 2/2/2031 | | SOFR plus 1.50% | | $ | 15.0 Term Loans | (1 | ) | | 12/18/2030 | | SOFR plus 1.75% | | | 1,279.7 Total First Lien Debt | | | | | | | | 1,294.7 Senior Notes due 2028 | | | 9/1/2028 | | 3.875% | | | 800.0 Total Debt | | | | | | | | 2,094.7 Cash Balance | | | | | | | | 224.9 Net Debt | | | | | | | $ | 1,869.8 Adjusted Shares Outstanding | (2 | ) | | | | | | | 246.1 Market Capitalization | (3 | ) | | | | | | $ | 8,928.5 Total Capitalization | | | | | | | $ | 10,798.3 (1) | | Element Solutions swapped its floating term loan rate to a fixed rate for a portion of its outstanding term loans through the use of interest rate swaps and cross-currency swaps which mature in December 2028 or December 2029, as applicable. At September 30, 2026, approximately 94% of the Company's debt was fixed. (2) | | See "Adjusted Common Shares Outstanding at September 30, 2026 and 2025" following the footnotes under the "Adjusted Earnings Per Share (EPS)" reconciliation table below. (3) | | Based on the closing price of the shares of Element Solutions of $36.28 at September 30, 2026. III. SELECTED FINANCIAL DATA | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, (dollars in millions) | | 2026 | | | 2025 | | | 2026 | | | 2025 Interest expense | $ | 24.5 | | $ | 17.9 | | $ | 72.8 | | $ | 53.9 Interest paid | | 31.1 | | | 24.9 | | | 76.2 | | | 59.1 Income tax expense | | 27.6 | | | 16.2 | | | 84.1 | | | 49.8 Income taxes paid | | 21.9 | | | 16.7 | | | 66.8 | | | 71.5 Capital expenditures | | 30.4 | | | 16.5 | | | 83.4 | | | 45.2 Proceeds from disposal of property, plant and equipment | | — | | | 0.1 | | | — | | | 0.8 Non-GAAP Measures To supplement its financial measures prepared in accordance with GAAP, Element Solutions presents in this release the following non-GAAP financial measures: EBITDA, adjusted EBITDA, adjusted EBITDA growth, adjusted EBITDA margin, adjusted EPS, adjusted common shares outstanding, free cash flow, organic net sales growth, full year 2026 guidance for adjusted EBITDA, and full year 2026 adjusted EPS growth expectations. The Company also evaluates and presents its results of operations on a constant currency basis. Management internally reviews these non-GAAP measures to evaluate performance and liquidity on a comparative period-to-period basis in terms of absolute performance, trends and expected future performance with respect to the Company's business, and believes that these non-GAAP measures provide investors with an additional perspective on trends and underlying operating results on a period-to-period comparable basis. The Company also believes that investors find this information helpful in understanding the ongoing performance of its operations as well as their ability to generate cash separate from items that may have a disproportionate positive or negative impact on its financial results in any particular period or that are considered to be associated with its capital structure. These non-GAAP financial measures, however, have limitations as analytical tools, and should not be considered in isolation from, a substitute for, or superior to, the related financial information that Element Solutions reports in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements, and may not be completely comparable to similarly titled measures of other companies due to potential differences in calculation methods. In addition, these measures are subject to inherent limitations as they reflect the exercise of judgment by management about which items are excluded or included in determining these non-GAAP financial measures. Investors are encouraged to review the definitions and reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures included in this press release, and not to rely on any single financial measure to evaluate the Company's businesses. The Company provides full year 2026 guidance for adjusted EBITDA and full year 2026 adjusted EPS growth expectations on a non-GAAP basis only. Reconciliations of such forward-looking non-GAAP measures to GAAP are excluded in reliance upon the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K due to the inherent difficulty in forecasting and quantifying, without unreasonable efforts, certain amounts that are necessary for such reconciliations, including adjustments that could be made for restructurings, refinancings, impairments, divestitures, integration and acquisition-related expenses, share-based compensation amounts, non-recurring, unusual or unanticipated charges, expenses or gains, adjustments to inventory and other charges reflected in its reconciliations of historic numbers, the amount of which, based on historical experience, could be significant. Constant Currency: The Company discloses net sales and adjusted EBITDA on a constant currency basis by adjusting results to exclude the impact of changes due to the translation of foreign currencies of its international locations into U.S. dollars. Management believes this non-GAAP financial information facilitates period-to-period comparison in the analysis of trends in business performance, thereby providing valuable supplemental information regarding its results of operations, consistent with how the Company internally evaluates its financial results. The impact of foreign currency translation is calculated by converting the Company's current-period local currency financial results into U.S. dollars using the prior period's exchange rates and comparing these adjusted amounts to its prior period reported results. The difference between actual growth rates and constant currency growth rates represents the estimated impact of foreign currency translation. Organic Net Sales Growth: Organic net sales growth is defined as net sales excluding the impact of foreign currency translation, changes due to the pass-through pricing of certain metals and acquisitions and/or divestitures, as applicable. Management believes this non-GAAP financial measure provides investors with a more complete understanding of the underlying net sales trends by providing comparable net sales over differing periods on a consistent basis. The following table reconciles GAAP net sales growth to organic net sales growth for the three and nine months ended September 30, 2026: | | Three Months Ended September 30, 2026 | | Reported Net Sales Growth | | Impact of Currency | | Change in Pass-Through Metals Pricing | | Acquisitions | | Organic Net Sales Growth Electronics | | 68 | % | | 0 | % | | (20 | )% | | (30 | )% | | 18 | % Specialties | | 13 | % | | 1 | % | | — | % | | (12 | )% | | 1 | % Total | | 52 | % | | 0 | % | | (14 | )% | | (25 | )% | | 13 | % | | | | | | | | | | | | Nine Months Ended September 30, 2026 | | Reported Net Sales Growth | | Impact of Currency | | Change in Pass-Through Metals Pricing | | Acquisitions & Divestitures | | Organic Net Sales Growth Electronics | | 68 | % | | (1 | )% | | (23 | )% | | (26 | )% | | 18 | % Specialties | | 10 | % | | (2 | )% | | — | % | | (6 | )% | | 2 | % Total | | 50 | % | | (2 | )% | | (16 | )% | | (19 | )% | | 13 | % NOTE: Totals may not sum due to rounding. For the three months ended September 30, 2026, Electronics' consolidated results were positively impacted by $94.4 million of pass-through metals pricing and $138 million of acquisitions, which includes $93.1 million of net sales from pass-through metals, and Specialties' consolidated results were positively impacted by $23.4 million of acquisitions. For the nine months ended September 30, 2026, Electronics' consolidated results were positively impacted by $303 million of pass-through metals pricing and $331 million of acquisitions, which includes $226 million of net sales from pass-through metals, and Specialties' consolidated results were positively impacted by $33.9 million of acquisitions net of divestitures. Adjusted Earnings Per Share (EPS): Adjusted EPS is a key metric used by management to measure operating performance and trends as management believes the exclusion of certain expenses in calculating adjusted EPS facilitates operating performance comparisons on a period-to-period basis. Adjusted EPS is defined as net income adjusted to reflect adjustments consistent with the Company's definition of adjusted EBITDA. Additionally, the Company eliminates amortization expense associated with intangible assets, incremental depreciation associated with the step-up of fixed assets and incremental cost of sales associated with the step-up of inventories recognized in purchase accounting for acquisitions, as well as the incremental depreciation associated with facility closures. Further, the Company adjusts its effective tax rate to 20%, as described in footnote (10) under the reconciliation table below. This effective tax rate, which reflects the Company's estimated long-term expectations for taxes to be paid on its adjusted non-GAAP earnings, is consistent with how management evaluates the Company's financial performance. The Company also believes that providing a fixed rate facilitates comparisons of business performance from period to period. This non-GAAP effective tax rate is lower than the average of the statutory tax rates applicable to the Company's jurisdictional mix of earnings, primarily because it reflects tax benefits derived from U.S. tax attribute carryforwards, which consist of operating losses and tax credits. The resulting adjusted net income is then divided by the Company's adjusted common shares outstanding. Adjusted common shares outstanding represent the shares outstanding as of the balance sheet date for the quarter-to-date period and an average of each quarter for the year-to-date period, plus the shares issuable upon exercise or vesting of all outstanding equity awards (assuming a performance achievement target level for equity awards with targets considered probable). The following table reconciles GAAP "Net income" to "Adjusted net income" and presents the number of adjusted common shares outstanding used in calculating adjusted EPS for each period presented below: | | | | | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, (dollars in millions, except per share amounts) | | | 2026 | | | | 2025 | | | | 2026 | | | | 2025 | Net income | | $ | 65.7 | | | $ | 39.3 | | | $ | 199.0 | | | $ | 184.8 | Net income attributable to non-controlling interests | | | — | | | | — | | | | (0.1 | ) | | | (0.1 | ) Reversal of amortization expense | (1 | ) | | 30.3 | | | | 28.6 | | | | 87.8 | | | | 84.3 | Adjustment to reverse incremental depreciation expense from acquisitions and facility closures | (1 | ) | | 0.7 | | | | 0.4 | | | | 2.7 | | | | 1.0 | Inventory step-up | (1 | ) | | 0.4 | | | | — | | | | 5.8 | | | | — | Restructuring expense | (2 | ) | | 3.3 | | | | 1.5 | | | | 7.4 | | | | 4.7 | Acquisition, integration and transaction expenses | (3 | ) | | 21.9 | | | | 11.0 | | | | 52.6 | | | | 22.6 | Foreign exchange (gains) losses on intercompany loans | (4 | ) | | (6.1 | ) | | | 11.6 | | | | (13.1 | ) | | | 28.2 | Loss (gain) on divestitures | (5 | ) | | — | | | | 7.0 | | | | — | | | | (59.6 | ) Unrealized losses (gains) on metals derivative contracts | (6 | ) | | 11.8 | | | | 6.4 | | | | (17.9 | ) | | | 13.3 | Debt financing costs | (7 | ) | | — | | | | — | | | | — | | | | 1.8 | Change in fair value of EFC contingent consideration | (8 | ) | | (5.9 | ) | | | — | | | | 3.4 | | | | — | Other, net | (9 | ) | | 4.4 | | | | 2.0 | | | | 14.9 | | | | 11.2 | Tax effect of pre-tax non-GAAP adjustments | (10 | ) | | (12.2 | ) | | | (13.7 | ) | | | (28.7 | ) | | | (21.5 | ) Adjustment to estimated effective tax rate | (10 | ) | | 9.0 | | | | 5.1 | | | | 27.5 | | | | 2.9 | Adjusted net income | | $ | 123.3 | | | $ | 99.2 | | | $ | 341.3 | | | $ | 273.6 | | | | | | | | | Adjusted earnings per share | (11 | ) | $ | 0.50 | | | $ | 0.41 | | | $ | 1.38 | | | $ | 1.12 | | | | | | | | | Adjusted common shares outstanding | (11 | ) | | 246.1 | | | | 244.0 | | | | 246.8 | | | | 244.3 | (1) | | The Company eliminates the amortization expense associated with intangible assets, incremental depreciation associated with the step-up of fixed assets and incremental cost of sales associated with the step-up of inventories recognized in purchase accounting for acquisitions, as well as the incremental depreciation associated with facility closures. The Company believes these adjustments provide insight with respect to the cash flows necessary to maintain and enhance its product portfolio. (2) | | The Company adjusts for costs of restructuring its operations, including those related to its acquired businesses. The Company adjusts these costs because it believes they are not reflective of ongoing operations. (3) | | The Company adjusts for costs associated with acquisition, integration and transaction activity, including costs of obtaining related financing, legal and accounting fees and transfer taxes. The Company adjusts these costs because it believes they are not reflective of ongoing operations. (4) | | The Company adjusts for foreign exchange gains and losses on intercompany loans because it expects the period-to-period movement of the applicable currencies to offset on a long-term basis and because these gains and losses are not fully realized due to their long-term nature. The Company does not exclude foreign exchange gains and losses on short-term intercompany and third-party payables and receivables. (5) | | The Company adjusts for the gain on the sale of its MacDermid Graphics Solutions business and the loss on other immaterial divestiture activity because it believes they are not reflective of ongoing operations. (6) | | The Company adjusts for unrealized gains/losses on metals derivative contracts as it believes it provides a more meaningful comparison of its performance between periods. (7) | | The Company adjusts for costs related to the partial prepayment of its term loans B-3 because it believes these costs are not reflective of ongoing operations. (8) | | The Company adjusts for changes in the fair value of contingent consideration related to the acquisition of EFC Gases & Advanced Materials because it believes they are not reflective of ongoing operations. (9) | | The Company's adjustments primarily consist of highly inflationary accounting losses for its operations in Turkey of $1.4 million and $1.2 million for the three months ended September 30, 2026 and 2025, respectively, $3.5 million and $4.1 million for the nine months ended September 30, 2026 and 2025, respectively, as well as certain professional consulting fees. The Company adjusts for highly inflationary accounting impacts for its operations in Turkey as it believes it provides a more meaningful comparison of its performance between periods. The Company adjusts for certain professional consulting fees because it believes they are not reflective of ongoing operations. (10) | | The Company uses a non-GAAP effective tax rate of 20%. This rate, which reflects the Company's estimated long-term expectations for taxes to be paid on its adjusted non-GAAP earnings, is consistent with how management evaluates the Company's financial performance. The Company also believes that providing a fixed rate facilitates comparisons of business performance from period to period. This non-GAAP effective tax rate is lower than the average of the statutory tax rates applicable to the Company's jurisdictional mix of earnings, primarily because it reflects tax benefits derived from U.S. tax attribute carryforwards, which consist of operating losses and tax credits. These economic benefits are expected to recur through 2028. Without taking into account these benefits derived from its U.S. tax attribute carryforwards and other similar adjustments, the Company's non-GAAP effective tax rate would have been 26.0% which would have resulted in a $0.10 reduction in Adjusted EPS for the nine months ended September 30, 2026. (11) | | The Company defines "Adjusted common shares outstanding" as the number of shares of its common stock outstanding as of the balance sheet date for the quarter-to-date period and an average of each quarter end for the year-to-date period, plus the shares issuable upon exercise or vesting of all outstanding equity awards (assuming a performance achievement target level for equity awards with targets considered probable). The Company adjusts the number of its outstanding common shares for this calculation as it believes it provides a better understanding of its results of operations on a per share basis. See the table below for further information. Adjusted Common Shares Outstanding at September 30, 2026 and 2025 The following table shows the Company's adjusted common shares outstanding at each period presented: | September 30, | | Year-to-Date Average | | September 30, (amounts in millions) | 2026 | | 2025 | | 2026 | | 2025 Basic common shares outstanding | 242.6 | | 242.0 | | 243.3 | | 242.0 Number of shares issuable upon vesting of granted Equity Awards | 3.5 | | 2.0 | | 3.5 | | 2.3 Adjusted common shares outstanding | 246.1 | | 244.0 | | 246.8 | | 244.3 EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin: EBITDA represents earnings before interest, provision for income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA, excluding the impact of additional items included in GAAP earnings which the Company believes are not representative or indicative of its ongoing business or are considered to be associated with its capital structure, as described in the footnotes located under the "Adjusted Earnings Per Share (EPS)" reconciliation table above. Adjusted EBITDA for each segment also includes an allocation of corporate costs, such as compensation expense and professional fees. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net sales excluding the value of certain pass-through metals in the Electronics segment. Adjusted EBITDA margin excludes the impact of certain pass-through metals in the Electronics segment as we believe the fluctuations in these metal prices do not reflect underlying operating results. Management believes adjusted EBITDA and adjusted EBITDA margin provide investors with a more complete understanding of the long-term profitability trends of the Company's business and facilitate comparisons of its profitability to prior and future periods. The following table reconciles GAAP "Net income" to "Adjusted EBITDA" for each of the periods presented: | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, (dollars in millions) | | | 2026 | | | | 2025 | | | 2026 | | | | 2025 | Net income | | $ | 65.7 | | | $ | 39.3 | | $ | 199.0 | | | $ | 184.8 | Add (subtract): | | | | | | | | Income tax expense | | | 27.6 | | | | 16.2 | | | 84.1 | | | | 49.8 | Interest expense, net | | | 22.8 | | | | 13.3 | | | 68.3 | | | | 40.5 | Depreciation expense | | | 14.8 | | | | 10.0 | | | 44.5 | | | | 29.7 | Amortization expense | | | 30.3 | | | | 28.6 | | | 87.8 | | | | 84.3 | EBITDA | | | 161.2 | | | | 107.4 | | | 483.7 | | | | 389.1 | Adjustments to reconcile to Adjusted EBITDA: | | | | | | | | Inventory step-up | (1 | ) | | 0.4 | | | | — | | | 5.8 | | | | — | Restructuring expense | (2 | ) | | 3.3 | | | | 1.5 | | | 7.4 | | | | 4.7 | Acquisition, integration and transaction expenses | (3 | ) | | 21.9 | | | | 11.0 | | | 52.6 | | | | 22.6 | Foreign exchange (gains) losses on intercompany loans | (4 | ) | | (6.1 | ) | | | 11.6 | | | (13.1 | ) | | | 28.2 | Loss (gain) on divestitures | (5 | ) | | — | | | | 7.0 | | | — | | | | (59.6 | ) Unrealized losses (gains) on metals derivative contracts | (6 | ) | | 11.8 | | | | 6.4 | | | (17.9 | ) | | | 13.3 | Debt financing costs | (7 | ) | | — | | | | — | | | — | | | | 1.8 | Change in fair value of EFC contingent consideration | (8 | ) | | (5.9 | ) | | | — | | | 3.4 | | | | — | Other, net | (9 | ) | | 4.4 | | | | 2.0 | | | 14.9 | | | | 11.2 | Adjusted EBITDA | | $ | 191.0 | | | $ | 146.9 | | $ | 536.8 | | | | 411.3 | Micromax Adjusted EBITDA | | | | | | | 7.2 | | | | — | MacDermid Graphics Solutions Adjusted EBITDA | | | | | | | — | | | | 5.3 | Adjusted EBITDA excluding the impact of acquisitions and divestitures (10) | | | | | | $ | 544.0 | | | $ | 406.0 | (10) Assumes that the Micromax Acquisition had closed on January 1, 2026 and the MacDermid Graphics Solutions transaction had closed on January 1, 2025. NOTE: For the remaining footnote descriptions, please refer to the footnotes located under the "Adjusted Earnings Per Share (EPS)" reconciliation table above. Free Cash Flow: Free cash flow for the three and nine months ended September 30, 2026 and 2025 is defined as net cash flows from operating activities less capital expenditures, plus (1) proceeds from the disposal of property, plant and equipment, (2) professional fees, non-recurring expenses and taxes paid in association with acquisitions and divestitures and (3) non-recurring payments associated with a multi-year tax settlement in the first quarter of 2025. Management believes that this non-GAAP metric, which measures the Company's ability to generate cash from its business operations, is an important financial measure for evaluating the Company's liquidity. Free cash flow should be considered as an additional measure of liquidity to, rather than as a substitute for, net cash provided by operating activities. The following table reconciles "Cash flows from operating activities" to "Free cash flow" for the periods presented: | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, (dollars in millions) | | | 2026 | | | | 2025 | | | | 2026 | | | | 2025 | Cash flows from operating activities | | $ | 159.2 | | | $ | 100.1 | | | $ | 192.2 | | | $ | 198.7 | Capital expenditures | | | (30.4 | ) | | | (16.5 | ) | | | (83.4 | ) | | | (45.2 | ) Proceeds from disposal of property, plant and equipment | | | — | | | | 0.1 | | | | — | | | | 0.8 | Adjustments | | | 5.7 | | | | 0.4 | | | | 25.2 | | | | 18.7 | Free cash flow | | $ | 134.5 | | | $ | 84.1 | | | $ | 134.0 | | | $ | 173.0 | View source version on businesswire.com: https://www.businesswire.com/news/home/20261021484929/en/ Contacts Investor Relations Contact: Varun Gokarn Vice President, Strategy and Integration Element Solutions Inc 1-203-952-0369 [email protected] Media Contact: Scott Bisang / Ed Hammond / Tali Epstein Collected Strategies 1-212-379-2072 [email protected]

Element Solutions (ESI) came out with quarterly earnings of $0.5 per share, beating the Zacks Consensus Estimate of $0.48 per share. This compares to earnings of $0.41 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +4.17%. A quarter ago, it was expected that this specialty chemical and printing products would post earnings of $0.43 per share when it actually produced earnings of $0.47, delivering a surprise of +9.3%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Element Solutions, which belongs to the Zacks Chemical - Specialty industry, posted revenues of $995.3 million for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 2.82%. This compares to year-ago revenues of $656.1 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Element Solutions shares have added about 42.7% since the beginning of the year versus the S&P 500's gain of 12.7%. While Element Solutions has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Element Solutions was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.46 on $943.2 million in revenues for the coming quarter and $1.81 on $3.73 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Chemical - Specialty is currently in the bottom 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Flexible Solutions International Inc. (FSI), another stock in the same industry, has yet to report results for the quarter ended September 2026. This company is expected to post quarterly loss of $0.02 per share in its upcoming report, which represents a year-over-year change of +50%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Flexible Solutions International Inc.'s revenues are expected to be $13.91 million, up 31.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Element Solutions Inc. (ESI) : Free Stock Analysis Report Flexible Solutions International Inc. (FSI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Element Solutions (ESI). This company, which is in the Zacks Chemical - Specialty industry, shows potential for another earnings beat. When looking at the last two reports, this specialty chemical and printing products has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 8.60%, on average, in the last two quarters. For the most recent quarter, Element Solutions was expected to post earnings of $0.43 per share, but it reported $0.47 per share instead, representing a surprise of 9.30%. For the previous quarter, the consensus estimate was $0.38 per share, while it actually produced $0.41 per share, a surprise of 7.89%. For Element Solutions, estimates have been trending higher, thanks in part to this earnings surprise history. And when you look at the stock's positive Zacks Earnings ESP (Expected Surprise Prediction), it's a great indicator of a future earnings beat, especially when combined with its solid Zacks Rank. Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Element Solutions currently has an Earnings ESP of +2.08%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on October 21, 2026. With the Earnings ESP metric, it's important to note that a negative value reduces its predictive power; however, a negative Earnings ESP does not indicate an earnings miss. Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate. Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Element Solutions Inc. (ESI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research