Solstice Advanced Materials Inc. Q1 FY2026 earnings call

• David Sewell noted that Solstice Advanced Materials delivered strong top and bottom line results in the first quarter, with robust demand across key businesses like nuclear, electronic materials, and refrigerants. The company continues to invest in growth areas aligned with strategic pillars. • Q1 was a strong cash quarter, generating nearly $200 million in operating cash flow. Solstice reaffirmed its full year 2026 guidance. • Highlighted growth investments in advanced computing, including a $200 million investment in the Spokane, Washington facility to double sputtering target capacity. • Tina Pierce discussed key drivers of net sales and adjusted EBITDA performance, including organic net sales growth, volume growth, pricing, and foreign currency translation. She also detailed the results in each segment in more detail

Refrigerants and Applied Solutions: Net sales $711 million, up 12% year-over-year (9% organic net sales growth and 3% increase due to foreign currency translation). Adjusted EBITDA was $242 million, down 3% year-over-year with an adjusted EBITDA margin of 34.1%, down 522 basis points year-over-year. Refrigerants net sales increased 19% year-over-year to $389 million. Nuclear net sales were $107 million, up 27% year-over-year. Building solutions and intermediate net sales were $167 million, down 8% year-over-year. Healthcare packaging net sales were $47 million, up 9% year-over-year. Electronic and Specialty Materials: Net sales were $281 million, up 7% year-over-year (5% organic net sales growth and 3% increase due to foreign currency translation). Adjusted EBITDA was $58 million, up 10% year-over-year with an adjusted EBITDA margin of 20.8%, up 52 basis points year-over-year. Electronic materials net sales increased 21% year-over-year to $109 million. Safety and defense solutions net sales were flat year-over-year at $50 million. Research and performance chemicals net sales remained steady year-over-year at $121 million

• For the full year 2026, Solstice reaffirms its guidance: net sales between $3.9 billion and $4.1 billion, adjusted EBITDA between $975 million and $1.025 billion, adjusted diluted earnings per share between $2.45 and $2.75, and capital expenditures between $400 million to $425 million. • For the second quarter of 2026, Solstice expects net sales between $1.06 billion and $1.1 billion with an approximately 25% to 26% adjusted EBITDA margin. The outlook reflects continued momentum in refrigerants, nuclear, and electronic materials, growth in safety and defense solutions, modest margin expansion, and a $10 million planned downtime-related expense

Q: Kevin McCarthy inquired about the nuclear business, asking about volume and price contributions, loan repayment, and long-term expansion.

A: In nuclear, there was a combination of price and volume growth. De-bottlenecking efforts are going well, with plans to significantly expand production capabilities through engaging an engineering firm for studies, customer discussions, and regulator interactions. The loan repayment of about $30 million will occur in the second half of the year.

Q: John McNulty asked about refrigerant growth in the data center industry and next generation opportunities.

A: There is double-digit growth in refrigerants for data centers. Solstice is co-innovating with customers on chip and data center infrastructure, working on single-phase and two-phase direct-to-chip, and exploring immersion cooling and other solutions.

Q: John Roberts asked about electronics growth and capacity constraints.

A: Solstice is selling all it can make in the Spokane facility and is accelerating expansion with a modular design. The growth in electronics is significant due to leading-edge nodes and copper manganese adoption.

Q: Hassan Ahmed asked about healthcare packaging destocking and legacy costs.

A: The destocking in healthcare packaging is mostly behind us. TSAs are going well, and the $30 million in legacy costs are on track.

Q: Josh Spector asked about refrigerants and non-controlling interest.

A: Refrigerants growth was mostly HFO-driven. The non-controlling interest was atypically high at $20 million this quarter but is expected to be around $10 million per quarter going forward.

Q: Arun Viswanathan asked about guidance conservatism and growth projects.

A: Guidance is conservative due to geopolitical factors. Growth projects like ballistic fibers and electronic materials are expected to have double-digit returns, with timing of benefits varying but projects expected to meet return on investment targets