Solstice Advanced Materials (SOLS) Q1 2026 earnings summary

Executive summary

• Delivered strong top and bottom line results in Q1 2026, with net sales reaching $991 million, up 10% year-over-year, driven by robust demand in nuclear, electronic materials, and refrigerants.

• First full standalone quarter as an independent company, demonstrating disciplined execution, agility, and financial flexibility with a conservative leverage position.

• Continued investment in growth areas aligned with strategic pillars, including advanced computing, nuclear, and semiconductor-related capacity.

• Generated $199 million in operating cash flow and $124 million in free cash flow, supporting growth investments and shareholder returns via a quarterly dividend.

• Focused on disciplined working capital management and reaffirmed full-year 2026 guidance.

Financial highlights

• Q1 2026 net sales were $991 million, up 10% year-over-year, with organic sales growth of 8%.

• Adjusted EBITDA was $249 million, margin 25.1%, impacted by HFO transition and higher R&D.

• GAAP net income attributable was $85 million, down 37% year-over-year due to higher SG&A, R&D, and interest expense.

• Adjusted diluted EPS was $0.63 for Q1; diluted EPS was $0.53.

• Capital expenditures rose 32% to $82 million, supporting long-term growth initiatives.

Outlook and guidance

• Reaffirmed full-year 2026 guidance: net sales $3.9–$4.1 billion, adjusted EBITDA $975 million–$1.025 billion, adjusted diluted EPS $2.45–$2.75, CapEx $400–$425 million.

• Q2 2026 guidance: net sales $1.06–$1.1 billion, adjusted EBITDA margin 25–26%, with modest margin expansion expected.

• Guidance reflects continued momentum in refrigerants, nuclear, electronic materials, and growth in Safety and Defense Solutions.

• Margin expansion anticipated as commercial actions offset cost inflation, assuming a stable macro environment.