Qnity Electronics (Q) Q3 2026 earnings summary

Executive summary

• Q3 marked the 10th consecutive quarter of profitable organic growth; net sales were $1.556B, up 22% YoY, with growth across both segments.

• AI-driven shrink and stack trends, advanced-node scaling, packaging and thermal solutions supported demand; FY26 guidance was raised following strong results and momentum.

Financial highlights

• Q3 adjusted operating EBITDA was $503M, up 36% YoY; adjusted EBITDA margin was 32.3% vs. 29.0% pro forma.

• Adjusted EPS was $1.46, up 55% YoY; adjusted gross margin was 47.8%, up 270 bps.

• GAAP net income was $196M vs. $223M; diluted GAAP EPS was $0.87 vs. $1.01.

• Adjusted free cash flow was $320M in Q3 and $607M YTD; cash and equivalents were $1.124B at September 30, 2026.

• Q3 gross profit was $743M vs. $575M; GAAP gross margin was 47.8% vs. 45.1%.

Outlook and guidance

• FY26 guidance: net sales $5.77B–$5.83B, adjusted operating EBITDA $1.785B–$1.805B, adjusted EPS $4.95–$5.05 and adjusted free cash flow $800M–$900M.

• Guidance midpoint increases from Q2 were $200M for sales, $95M for adjusted EBITDA, $0.50 for adjusted EPS and $200M for adjusted free cash flow.

• At guidance midpoints, FY26 sales growth is 22%, adjusted EBITDA growth exceeds 28% and adjusted EPS growth is ~50%; Q4 sales growth is expected at ~26% YoY.

• FY26 MSI wafer starts are expected to grow high single digits to low double digits; semiconductor and Interconnect Solutions growth are expected at ~15% and ~30%, respectively, at midpoints.

• 2027 MSI growth is assumed in the high-single-digit to low-double-digit range; management expects capacity to support demand through 2028 and beyond.