Ecovyst (ECVT) Q1 2025 earnings summary

Executive summary

• Q1 2025 sales rose 1.1% year-over-year to $162.2M, driven by higher average selling prices and strong Zeolyst JV performance; net loss was $3.6M versus net income of $1.2M last year; adjusted net income was $1.2M.

• Adjusted EBITDA was $38.9M, down 14.5% from $45.5M in Q1 2024, reflecting higher costs, lower Ecoservices sales volume, and turnaround activity, partially offset by Zeolyst JV gains; adjusted EBITDA margin at 19.5%.

• Cash flow from operations dropped to $10.3M from $36.5M, mainly due to lower Zeolyst JV dividends and unfavorable working capital changes; adjusted free cash flow was $(13.0)M.

• The company amended its term loan and ABL credit agreements, reducing interest rates and extending maturities.

• Announced $35M acquisition of Cornerstone Chemical's sulfuric acid assets, expected to close in Q2 2025, expanding Gulf Coast capacity.

Financial highlights

• GAAP sales: $162.2M (up 1.1% year-over-year); Zeolyst JV sales: $37.7M (up 60.4%).

• Adjusted EBITDA: $38.9M (down 14.5%); Adjusted EBITDA margin: 19.5% (down from 24.7% last year).

• Net loss: $(3.6)M; Adjusted Free Cash Flow: $(13.0)M; EPS of $(0.03) compared to $0.01 last year.

• Net debt was $741.1M as of March 31, 2025; net debt leverage ratio at 3.2x; available liquidity: $201M.

• Gross profit declined 34.7% to $25.6M; gross margin fell to 15.8%.

Outlook and guidance

• Full-year 2025 sales guidance raised to $785M–$845M, mainly due to higher sulfur cost pass-throughs; adjusted EBITDA guidance maintained at $238M–$258M.

• Adjusted Free Cash Flow guidance maintained at $60M–$80M; capital expenditures expected at $80M–$90M.

• Q2 2025 adjusted EBITDA expected at $45M–$55M; Q3 anticipated to be the peak for both segments.

• Management expects existing cash, cash flow, and ABL Facility availability to be sufficient for at least the next twelve months.

• No material 2025 earnings expected from the Cornerstone acquisition; meaningful contribution anticipated in 2026.