Solstice Advanced Materials (SOLS) Q1 2026 earnings summary

Executive summary

• Net sales reached $991 million in Q1 2026, up 10% year-over-year, driven by strong growth in Nuclear, Electronic Materials, and Refrigerants.

• Net income attributable to shareholders was $85 million, down 37% year-over-year, primarily due to higher operating costs, R&D investments, and increased interest expense post-spin-off.

• Adjusted EBITDA was $249 million, with a margin of 25.1%, impacted by refrigerant mix shift, HFO transition, and higher R&D spend.

• Operating cash flow was $199 million and free cash flow was $124 million, supporting growth investments and shareholder returns.

• The company completed its spin-off from Honeywell in October 2025 and now operates independently, reaffirming 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 (25.1% margin), flat year-over-year, with margin decline due to product mix and higher costs.

• Net income attributable to shareholders was $85 million; adjusted diluted EPS was $0.63; basic and diluted EPS were $0.53.

• Free cash flow was $124 million, with capital expenditures rising 32% to $82 million.

• Total liquidity was approximately $1.6 billion, including $642 million in cash and $1.0 billion in revolving credit availability.

Outlook and guidance

• Reaffirmed full-year 2026 guidance: net sales $3.9–$4.1 billion, adjusted EBITDA $975–$1,025 million, 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, and electronic materials, and growth in Safety and Defense Solutions.

• Company expects sufficient liquidity for at least the next 12 months, supported by cash, operating flows, and available credit.

• Quarterly dividends are expected to continue, subject to board approval.