Element Solutions (ESI) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 results with net sales of $978M, up 56% year-over-year and 15% organically, led by strong organic growth in electronics and specialties, and significant contributions from Micromax and EFC acquisitions.

• Adjusted EBITDA increased 35% to $184M, with margin up to 27.8%, and adjusted EPS rose 27% to $0.47.

• Net income rose 63% to $77M, with net income margin improving to 7.9%.

• Announced merger agreement with Solstice Advanced Materials, targeting over $180M in cost synergies and expanded electronics portfolio, pending regulatory and shareholder approval, expected to close in H1 2027.

• Investments in capacity, innovation, and new technologies like Cuprion are accelerating to meet high-growth market demand.

Financial highlights

• Q2 2026 net sales: $978M (+56% reported, +15% organic); adjusted EBITDA: $184M (+35%); adjusted EPS: $0.47 (+27%); net income: $77M (+63%).

• Adjusted EBITDA margin improved 120 bps to 27.8%; electronics adjusted EBITDA margin exceeded 31%.

• Free cash flow for Q2 2026 was $74M; capex at $28M; full-year capex expected at ~$100M.

• Net debt at quarter-end was $1.94B; pro forma net leverage ratio 2.9x, targeting ~2.5x by year-end.

• Paid $20M in cash dividends in Q2 2026; $39.8M in H1 2026.

Outlook and guidance

• Full-year 2026 adjusted EBITDA guidance raised to $690M–$710M, with ~20% adjusted EPS growth expected.

• Q3 2026 adjusted EBITDA expected at ~$180M, with sequential demand similar to H1 and some risk from raw material and logistics inflation.

• CapEx to remain below 3% of sales, focused on high-return projects.

• Management expects sufficient liquidity for the next twelve months, with ongoing focus on operational execution and capital allocation.

• Net leverage ratio expected to decline to ~2.5x by year-end.