Qnity Electronics (Q) Q1 2026 earnings summary

Executive summary

• Achieved eighth consecutive quarter of strong, profitable organic growth, with Q1 2026 net sales reaching $1.3 billion, up 18% year-over-year, driven by AI, high-performance computing, and advanced connectivity end markets.

• Adjusted earnings rose 33% year-over-year to $226 million, while GAAP net income declined 19% to $162 million due to higher interest and transformation costs.

• Strategic focus on innovation, advanced materials, and integration for 3D chip architectures, with new collaborations and capacity expansions, including partnerships with NVIDIA and inclusion in Apple's American Manufacturing Program.

• Completed spin-off from DuPont in November 2025, now operating as an independent public company.

• Launched a multi-year transformation plan in February 2026 to enhance productivity and innovation, incurring $28 million in related charges.

Financial highlights

• Q1 2026 net sales reached $1.3 billion, up 18% year-over-year; adjusted operating EBITDA rose 22% to $411 million, with margin at 31.3%.

• Adjusted EPS was $1.08, up 33% year-over-year; GAAP EPS was $0.72, down 22%.

• Adjusted free cash flow for Q1 2026 was $28 million, down from $103 million in Q1 2025.

• Gross profit for Q1 2026 was $618 million, up from $531 million in Q1 2025.

• Net income for Q1 2026 was $162 million, down from $199 million in Q1 2025, primarily due to higher interest expense and transformation charges.

Outlook and guidance

• Full-year 2026 net sales guidance raised to $5.225–$5.375 billion; adjusted operating EBITDA guidance increased to $1.535–$1.625 billion.

• Adjusted EPS guidance set at $3.80–$4.14; adjusted free cash flow guidance raised to $500–$600 million.

• Anticipates double-digit net sales and EBITDA growth year-over-year, with strong demand trends in AI, HPC, and advanced connectivity.

• Majority of transformation plan cash outflows anticipated over the next two years.

• Sufficient liquidity and financial flexibility expected to meet obligations, supported by operating cash flow and access to capital markets.