Quaker Chemical (KWR) investor relations material

Executive summary

• Net sales for Q2 2026 reached $533 million, up 10% year-over-year, driven by 7% volume growth, favorable currency, and pricing, with all segments contributing and Asia-Pacific leading growth.

• Adjusted EBITDA hit a record $85.2 million (16.0% margin), up 13% year-over-year, marking the fourth consecutive quarter of profitability growth.

• Non-GAAP diluted EPS was $2.19, up 28% year-over-year; GAAP diluted EPS was $1.55, with net income of $26.8 million, reversing a prior-year loss.

• Successfully navigated raw material cost inflation and supply disruptions from geopolitical conflicts, maintaining supply continuity and implementing price increases.

• Launched a new manufacturing facility in China, enhancing local production capabilities and operational flexibility in Asia-Pacific.

Financial highlights

• Gross profit for Q2 2026 was $189.2 million (35.5% margin), up 10% year-over-year, though margin declined slightly due to higher raw material costs.

• Operating income was $40.6 million, compared to a loss of $52.5 million in Q2 2025; operating margin improved to 7.6%.

• Adjusted EBITDA margin improved to 16.0% from 15.6% year-over-year.

• Cash from operations was $29 million in Q2 and $33 million year-to-date, down from last year due to higher working capital needs.

• SG&A expenses rose 11% to $140.5 million, mainly from higher incentive compensation and transformation costs.

Outlook and guidance

• End markets are expected to remain flat to modestly positive in the second half of 2026, with stable demand trends for Q3.

• Gross margin percentage anticipated to remain in Q2 range for Q3, with a target to exceed 36% by year-end as pricing actions take effect.

• Project mid to high single-digit adjusted EBITDA growth for full year 2026, supported by share gains and cost management.

• The 2026 global business transformation program is expected to generate $20–30 million in annualized cost savings by 2028.

• Management expects to maintain sufficient liquidity and remain in compliance with credit facility terms.