Qnity Electronics (Q) Q2 2026 earnings summary

Executive summary

• Achieved ninth consecutive quarter of strong, profitable organic growth, with Q2 2026 net sales reaching $1.43 billion, up 22% year-over-year, driven by innovation in semiconductor materials, advanced packaging, and robust AI-driven demand.

• Adjusted Operating EBITDA rose to $450 million in Q2 2026, up 24% year-over-year, while adjusted EPS increased 53% to $1.19; GAAP net income declined to $136 million due to higher SG&A, transformation charges, and tax rate.

• Raised full-year 2026 guidance across all key metrics, reflecting ongoing demand tailwinds, strong execution, and robust performance in both Semiconductor Technologies and Interconnect Solutions.

• Launched a multi-year transformation plan in February 2026 to enhance productivity and optimize market presence, incurring significant charges for IT independence and organizational redesign.

• Authorized a $500 million share repurchase program, with $50 million repurchased in the first half of 2026.

Financial highlights

• Q2 2026 net sales reached $1.43 billion, up 22% year-over-year and 9% sequentially; adjusted operating EBITDA was $431 million (24% growth), with a margin of 30.2%.

• Adjusted EPS for Q2 2026 was $1.19, up 53% year-over-year; GAAP EPS was $0.59, down 34% year-over-year.

• Adjusted free cash flow for Q2 2026 was $259 million; operating cash flow for the first six months was $376 million.

• Gross profit for Q2 2026 was $666 million, with a gross margin of approximately 47%.

• Cash and cash equivalents stood at $961 million as of June 30, 2026; long-term debt was $3.997 billion.

Outlook and guidance

• Full-year 2026 net sales guidance raised to $5.55–$5.65 billion; adjusted operating EBITDA to $1.675–$1.725 billion; adjusted EPS to $4.40–$4.60; adjusted free cash flow to $600–$700 million.

• Sequential net sales growth expected in low single digits for Semiconductor Technologies and mid-single digits for Interconnect Solutions in Q3.

• At midpoint, expects 18% net sales growth, over 20% adjusted EBITDA growth, and 35% adjusted EPS growth for the year.

• Management expects continued strong demand in AI, advanced packaging, and high bandwidth memory markets.

• The transformation plan is expected to drive operational efficiencies and cost savings over the next two years.