Solstice Advanced Materials Inc. (SOLS): Results of Operations and Financial Condition
Solstice Advanced Materials Inc. (SOLS) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Solstice Advanced Materials Reports Second Quarter 2026 Results • Net Sales of $1,148 million up 11% YoY reflecting double-digit growth in Nuclear, Electronic Materials, Refrigerants, and Healthcare Packaging • Net Income attributable to Solstice Advanced Materials o
How this was made
The 30-second read
Why it matters
The key tradable items are the raised full-year 2026 guidance ranges and the disclosed drivers of Q2 margin changes, plus the announced acquisition of Element Solutions expected to close in 1H 2027.
Market read
Guidance uplift and deal news can drive near-term repricing of earnings expectations and M&A optionality, while margin compression highlights execution sensitivity.
What to watch
The margin headwind is attributed to plant turnaround timing and prior-year incentive credits; traders should verify whether 2H margin guidance (mid-30% for RAS) is credible versus execution risk.
Solstice Advanced Materials Reports Second Quarter 2026 Results
Net Sales increased 11%, Net Income attributable to Solstice Advanced Materials increased 23%, and the Company raised its Full-Year 2026 outlook, while Adjusted EBITDA increased 2% and Adjusted EBITDA Margin decreased 218 basis points.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net SalesGAAP | $1,148 million | – | 11% |
| Organic Net Salesnon-GAAP | 11% increase | – | 11% |
| Net Income attributable to Solstice Advanced MaterialsGAAP | $119 million | – | 23% |
| Diluted EPSGAAP | $0.75 | – | 23% |
| Adjusted diluted EPSnon-GAAP | $0.88 | – | N/A |
| Adjusted EBITDAnon-GAAP | $290 million | – | 2% |
| Adjusted EBITDA Marginnon-GAAP | 25.3% | – | (218) bps |
| Corporate ExpensesGAAP | $54 million | – | – |
| Standalone cost adjustmentsnon-GAAP | $0 million | – | – |
| Income Tax ExpenseGAAP | $42 million | – | decrease of $59 million |
| Effective tax rateGAAP | 24% | – | – |
| Operating Cash Flow for the six months ended June 30, 2026GAAP | $461 million | – | – |
| Capital Expenditures for the six months ended June 30, 2026other | $186 million | – | 35% increase |
| Free Cash Flow for the six months ended June 30, 2026non-GAAP | $248 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Refrigerants & Applied SolutionsNet Sales in Refrigerants increased 13% in the second quarter of 2026 compared to the second quarter of 2025, reflecting strong volume and pricing across the business’ product offerings. | $850 million | – | 12% |
| RefrigerantsStrong volume and pricing across the business’ product offerings. | $473 million | – | 13% |
| Building Solutions & IntermediatesNot provided. | $180 million | – | (1)% |
| NuclearReflecting both favorable pricing and increased volumes. | $125 million | – | 27% |
| Healthcare PackagingCustomer demand patterns recovered following destocking in the second half of 2025. | $73 million | – | 24% |
| Electronic & Specialty MaterialsGrowth was primarily driven by a 15% increase in Electronic Materials reflecting increased volume on robust customer demand across the semiconductor market. | $298 million | – | 8% |
| Research & Performance ChemicalsDemand for fine chemicals. | $135 million | – | 3% |
| Electronic MaterialsIncreased volume on robust customer demand across the semiconductor market. | $119 million | – | 15% |
| Safety & Defense SolutionsStronger order patterns. | $43 million | – | 7% |
Raised 2026 Guidance and 3Q 2026 Guidance outlook
- RevenueFull-Year 2026 Net Sales: $4,125 - $4,185 million; 3Q 2026 Net Sales: $990 - $1,030
- NoteFull-Year 2026 Adjusted EBITDA: $1,035 - $1,055 million
- NoteFull-Year 2026 Adjusted Diluted EPS: $2.75 - $2.95
- NoteFull-Year 2026 Capital Expenditures: $420 - $440
- NoteThe Company continues to expect this segment to generate mid-30% Adjusted EBITDA Margins in the second half of 2026.
Capital returns
- The Board of Directors declared a quarterly dividend of $0.075 per share of common stock outstanding.
- Dividend payable on September 10, 2026, to shareowners of record as of August 27, 2026.
What drove it
- Organic Net Sales increased by 11% driven by both volume growth and favorable pricing.
- Refrigerants & Applied Solutions growth reflected Refrigerants, Nuclear, and Healthcare Packaging sales gains.
- Electronic Materials growth reflected increased volume on robust customer demand across the semiconductor market.
- Safety & Defense Solutions sales increased on stronger order patterns.
- Research & Performance Chemicals sales grew on demand for fine chemicals.
- Net Income attributable to Solstice Advanced Materials benefited from higher Net Sales and lower income taxes.
- Electronic & Specialty Materials Adjusted EBITDA increased primarily due to volume growth in Electronic Materials.
Concerns
- Adjusted EBITDA Margin decreased 218 basis points to 25.3%.
- Refrigerants & Applied Solutions Segment Adjusted EBITDA decreased 6% and Segment Adjusted EBITDA Margin decreased 648 basis points.
- Margin performance was affected by timing of current year plant turnaround activity and production incentive credits in the prior year.
- Corporate Expenses increased to $54 million due to incremental ongoing costs necessary to operate as an independent public company.
- Net Income growth was partially offset by higher standalone company operating costs and net interest expense.
- Building Solutions & Intermediates Net Sales decreased (1)%.
What to watch
- Execution toward the Raised 2026 Guidance for Net Sales of $4,125 - $4,185 million.
- Third-quarter Net Sales guidance of $990 - $1,030.
- Whether Refrigerants & Applied Solutions generates mid-30% Adjusted EBITDA Margins in the second half of 2026.
- Capital Expenditures under the Raised 2026 Guidance of $420 - $440.
- Progress on the Element Solutions acquisition, which is expected to close in the first half of 2027 subject to stated conditions.
Balance sheet and cash flow
- Operating Cash Flow for the six months ended June 30, 2026 was $461 million.
- Capital Expenditures for the six months ended June 30, 2026 were $186 million, a 35% increase compared to the prior-year period.
- Free Cash Flow for the six months ended June 30, 2026 was $248 million.
- Total Long-Term Debt was $2.0 billion as of June 30, 2026.
- Cash and Cash Equivalents were approximately $750 million as of June 30, 2026.
- Net Leverage ratio was approximately 1.3x based on a trailing twelve-month Adjusted EBITDA.
- Total liquidity was approximately $1.75 billion, including Cash and Cash Equivalents and $1.0 billion of availability through the Company’s revolving credit facility.
- Solstice entered into a definitive agreement to acquire Element Solutions in a cash-and-stock transaction on July 6, 2026. The transaction is expected to close in the first half of 2027, subject to shareholder and regulatory approvals and other customary closing conditions.
Analysis
Second-quarter demand was broad-based. Net Sales increased 11% to $1,148 million, and Organic Net Sales increased by 11%, driven by both volume growth and favorable pricing. Refrigerants & Applied Solutions increased 12%, with Refrigerants up 13%, Nuclear up 27%, and Healthcare Packaging up 24%. Electronic & Specialty Materials increased 8%, led by a 15% increase in Electronic Materials on increased volume and robust customer demand across the semiconductor market.
Profit growth was more muted than sales growth at the EBITDA level. Adjusted EBITDA increased 2% to $290 million, while Adjusted EBITDA Margin declined 218 basis points to 25.3%. The Company attributed the margin impact to timing of plant turnaround activity and production incentive credits in the prior year, partially offset by volume growth and favorable pricing. Refrigerants & Applied Solutions was the principal margin pressure point, with Segment Adjusted EBITDA down 6% and margin down 648 basis points, although the Company continues to expect mid-30% Adjusted EBITDA Margins for that segment in the second half of 2026.
GAAP earnings increased faster than sales and Adjusted EBITDA. Net Income attributable to Solstice Advanced Materials rose 23% to $119 million and Diluted EPS rose 23% to $0.75. Higher Net Sales and lower income taxes were the primary contributors, partially offset by higher standalone company operating costs and net interest expense. Corporate Expenses increased to $54 million from $46 million because of incremental costs associated with operating as an independent public company. Income Tax Expense was $42 million, while the effective tax rate was 24% compared with 51% in the prior-year quarter.
Cash generation for the six months ended June 30, 2026 was $461 million of Operating Cash Flow and $248 million of Free Cash Flow. Capital Expenditures were $186 million, a 35% increase driven by planned investments intended to support long-term growth. At June 30, 2026, the Company reported $2.0 billion of Total Long-Term Debt, approximately $750 million of Cash and Cash Equivalents, approximately 1.3x Net Leverage, and approximately $1.75 billion of total liquidity. The Board also declared a quarterly dividend of $0.075 per share.
Management raised full-year outlook for Net Sales to $4,125 - $4,185 million, Adjusted EBITDA to $1,035 - $1,055 million, Adjusted Diluted EPS to $2.75 - $2.95, and Capital Expenditures to $420 - $440. The release also provides 3Q 2026 Net Sales guidance of $990 - $1,030. The announced Element Solutions cash-and-stock acquisition adds a major execution item, with closing expected in the first half of 2027 subject to stated approvals and customary conditions.
Management, verbatim
Solstice delivered strong second-quarter results with double-digit growth across four of our seven reported businesses.
David Sewell, President and Chief Executive Officer
We are executing well on our organic growth strategy while positioning for the future: our agreement to acquire Element Solutions accelerates our strategy to build a scaled advanced materials platform aligned with the most powerful trends in our markets, including AI, data centers, nuclear energy, and semiconductor manufacturing.”
David Sewell, President and Chief Executive Officer
Our strong first-half performance gives us confidence to raise our full-year outlook, even against an uncertain macroeconomic backdrop.
David Sewell, President and Chief Executive Officer
Not in the filing
stated, not guessed- Gross profit and gross margin for the second quarter of 2026.
- GAAP operating income and operating margin for the second quarter of 2026.
- GAAP net cash provided by operating activities for the second quarter of 2026 alone.
- Free Cash Flow for the second quarter of 2026 alone.
- Prior-year amounts for six-month Operating Cash Flow, Capital Expenditures, and Free Cash Flow.
- GAAP reconciliation for forward-looking Adjusted EBITDA and Adjusted Diluted EPS.
- Third-quarter 2026 guidance for Adjusted EBITDA, Adjusted Diluted EPS, Capital Expenditures, gross margin, operating expenses, and tax rate.
- Share repurchases or repurchase authorization.
- Quarter-over-quarter comparisons for reported metrics.
- Prior-year revenue amounts and margins for individual reported businesses other than the percentage changes provided.
- A numerical prior-year amount for Income Tax Expense.
- A numerical prior-quarter amount for all reported metrics.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC Form 8-K (Item 2.02) with an earnings release covering Solstice’s Q2 2026 financial results, balance sheet metrics, a dividend declaration, and a pending acquisition agreement.
Ticker impact
Solstice reported Q2 2026 results and raised full-year 2026 guidance for net sales, adjusted EBITDA, and adjusted EPS.
Likely positive bias for SOLS as traders reprice FY 2026 expectations; follow-through depends on whether margin headwinds (turnarounds, incentives) normalize in 2H.
The filing discloses both the quarterly performance and explicit upward FY ranges, which are direct inputs to valuation and positioning. It also provides the stated drivers of margin changes, reducing ambiguity about whether the compression is temporary.
Market effects
Strength in nuclear, electronic materials, and refrigerants read-across to demand expectations for specialty materials tied to data centers, semiconductors, and nuclear energy.
Limited direct regional read-through; guidance and acquisition are company-specific.
Acquisition of Element Solutions may reshape competitive positioning in advanced materials globally, but near-term impact is mostly through SOLS guidance and deal optionality.
Counterpoint
Q2 adjusted EBITDA margin fell 218 bps, suggesting that volume and pricing gains may not fully translate into earnings quality near term.
Key entities
- companySolstice Advanced Materials Inc.
Nasdaq-listed specialty materials company reporting Q2 2026 results and raising FY 2026 guidance.
- companyElement Solutions
Target of Solstice’s announced cash-and-stock acquisition agreement, expected to close in 1H 2027.
