Q2 FY2026
Filed Aug 6, 2026Revenue rose 19% to $868 million, while Tronox reported a $171 million net loss attributable to Tronox and guided Q3 2026 Adjusted EBITDA to $95-$115 million.
Revenue, TiO2 and zircon volumes, sequential pricing, free cash flow and Q3 Adjusted EBITDA guidance improved, but the company remained loss-making, Adjusted EBITDA declined year over year, margin contracted, and net leverage was 11.4x.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $868 million | 14% | 19% |
| TiO2 revenueother | $700 million | 14% | 19% |
| Zircon revenueother | $97 million | 9% | 43% |
| Other products revenueother | $71 million | 29% | (7)% |
| Loss from operationsGAAP | $21 million | n/m | n/m |
| Net loss attributable to TronoxGAAP | $171 million | n/m | n/m |
| GAAP diluted loss per shareGAAP | $1.07 | n/m | n/m |
| Adjusted net loss attributable to Tronoxnon-GAAP | $82 million | – | – |
| Adjusted diluted loss per sharenon-GAAP | $0.51 | n/m | n/m |
| Non-recurring adjustmentsnon-GAAP | $89 million | – | – |
| Tax valuation allowanceGAAP | $103 million | – | – |
| Adjusted EBITDAnon-GAAP | $73 million | 18% | (22)% |
| Adjusted EBITDA marginnon-GAAP | 8.4% | 20 bps | (430) bps |
| Selling, general and administrative expensesGAAP | $72 million | – | – |
| Net interest expenseGAAP | $56 million | – | – |
| Depreciation, depletion and amortization expenseGAAP | $76 million | – | – |
| Capital expendituresother | $45 million | – | – |
| Free cash flowother | $60 million | n/m | n/m |
| Total debtother | $3.2 billion | – | – |
| Net debtother | $3.0 billion | – | – |
| Net leverage ratioother | 11.4x | – | – |
| Available liquidityother | $527 million | – | – |
| Cash and cash equivalentsGAAP | $194 million | – | – |
| Availability under revolving credit agreementsother | $333 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| TiO2Year-over-year sales growth was driven by an 18% increase in sales volumes and a 1% favorable exchange rate impact, while average selling prices including mix remained flat. Sequential sales growth was driven by a 9% increase in sales volumes and a 5% increase in average selling prices including mix. | $700 million | 14% | 19% |
| ZirconYear-over-year growth was driven by a 61% increase in sales volumes, partially offset by a 18% decrease in average selling prices including mix. Sequential growth reflected a 4% increase in sales volumes and a 5% increase in average selling prices including mix. | $97 million | 9% | 43% |
| Other productsThe year-over-year decline was driven by lower sales volumes. Sequential growth was primarily due to higher sales volumes of pig iron. | $71 million | 29% | (7)% |
Q3 2026 and full year 2026 outlook
- NoteTiO2 volumes are expected to moderate sequentially in the mid-single-digit percentage range compared to the second quarter.
- NoteZircon volumes are expected to moderate slightly following a very strong first half, primarily due to inventory availability.
- NoteTiO2 pricing is expected to increase sequentially in the mid-single-digit percentage range.
- NoteZircon pricing is expected to increase sequentially in the mid- to high single-digit percentage range.
- NoteAdjusted EBITDA for the third quarter of 2026 is expected to be in the range of $95-$115 million.
- NoteMargins are expected to improve sequentially.
- NoteFree cash flow is expected to be relatively neutral in the third quarter.
- NoteMeaningful positive free cash flow generation is expected for the full year 2026.
What drove it
- TiO2 volumes were at the highest level since the second quarter of 2022.
- Pricing for both TiO2 and zircon increased 5% sequentially as previously announced increases were implemented.
- Adjusted EBITDA declined year over year because of unfavorable exchange rate movements, lower average selling prices including mix, higher production costs, freight and other costs, partly offset by higher sales volumes.
- Sequential Adjusted EBITDA growth reflected higher TiO2 and zircon selling prices including mix and higher sales volumes, partly offset by higher production costs, unfavorable exchange rate impacts, and higher freight and other costs.
- The cost improvement program remains on track to deliver at the higher end of the $125-$175 million annual run-rate savings target by the end of 2026.
- Two planned outages increased costs during the quarter, partly offset by the sale of more lower-cost inventory.
- Tronox plans the restart of a furnace and is advancing plans to bring production back online at its West Mine at Namakwa to support inventory levels, including zircon.
Concerns
- Net loss attributable to Tronox was $171 million, including a $103 million tax valuation allowance.
- Adjusted EBITDA margin was 8.4%, down (430) bps year over year.
- Net leverage ratio was 11.4x on a trailing twelve-month basis.
- Elevated input costs are expected from continued volatility in the Middle East.
- Geopolitical developments in the Middle East continue to create uncertainty across portions of the industry.
- Zircon volumes are expected to moderate slightly in the third quarter primarily due to inventory availability.
What to watch
- Whether announced TiO2 and zircon pricing actions deliver the expected sequential margin improvement in Q3 2026.
- The extent of the expected mid-single-digit percentage TiO2 volume moderation and slight zircon volume moderation in Q3 2026.
- Realization of the cost improvement program's higher end of the $125-$175 million annual run-rate savings target by the end of 2026.
- The effect of elevated input costs and Middle East volatility on margins and the company's ability to recover costs through pricing and commercial and operating initiatives.
- Free cash flow progression after the company expects Q3 free cash flow to be relatively neutral and meaningful positive free cash flow for full year 2026.
- Execution of the Namakwa furnace restart and West Mine production plans to support inventory and zircon availability.
Balance sheet and cash flow
- Generated free cash flow of $60 million.
- Capital expenditures were $45 million.
- Total debt was $3.2 billion and net debt was $3.0 billion.
- Net leverage ratio was 11.4x on a trailing twelve-month basis.
- Available liquidity totaled $527 million, including $194 million in cash and cash equivalents and $333 million available under revolving credit agreements.
- Total inventory was reduced approximately $120 million from first quarter levels to its lowest value since June 2024.
- The next significant debt maturity is not until 2029.
- The company replaced an expired short-term revolving credit facility with a new long-term financing arrangement. It has no financial covenants on its term loans or bonds.
Analysis
Tronox delivered stronger sales momentum in the second quarter. Revenue increased 19% year over year and 14% sequentially to $868 million. TiO2 revenue increased 19% year over year, supported by an 18% volume increase, while zircon revenue increased 43% on a 61% volume increase. Sequentially, both TiO2 and zircon benefited from 5% increases in average selling prices including mix, alongside higher volumes. Other products remained a drag year over year, with revenue declining 7% on lower sales volumes, although sequential revenue rose 29% primarily on pig iron volumes.
Profitability remained weak despite the sales recovery. Tronox reported a loss from operations of $21 million and a net loss attributable to Tronox of $171 million, including a $103 million tax valuation allowance. Adjusted EBITDA was $73 million, down 22% from $93 million in the prior-year quarter, and Adjusted EBITDA margin declined to 8.4% from 12.7%. The company cited unfavorable exchange rate movements, lower average selling prices including mix, higher production costs, freight and other costs as the principal year-over-year EBITDA pressures, partly offset by higher sales volumes.
The sequential earnings trajectory improved. Adjusted EBITDA increased 18% from $62 million in the first quarter, and margin improved 20 bps from 8.2%, as higher TiO2 and zircon pricing and higher volumes more than partly offset higher production costs, unfavorable exchange rates, freight and other costs. Completed planned outages raised second-quarter costs, but the company said the sale of more lower-cost inventory provided a partial offset. Management also maintained that its cost improvement program is on track for the higher end of its $125-$175 million annual run-rate savings target by the end of 2026.
Cash flow and working capital were the clearest balance-sheet positives. Tronox generated $60 million of free cash flow after capital expenditures of $45 million and reduced total inventory approximately $120 million from first-quarter levels. Liquidity totaled $527 million, but total debt of $3.2 billion, net debt of $3.0 billion and net leverage of 11.4x remain central constraints. The company expects Q3 free cash flow to be relatively neutral, while retaining its outlook for meaningful positive free cash flow for full year 2026.
The Q3 outlook calls for pricing-led earnings improvement. TiO2 volumes are expected to decline in the mid-single-digit percentage range sequentially and zircon volumes are expected to moderate slightly, but both TiO2 and zircon pricing are expected to rise sequentially. Tronox expects Adjusted EBITDA of $95-$115 million and sequential margin improvement, supported by pricing actions and higher operating rates after extended outages. Elevated input costs related to Middle East volatility are expected to partly offset those benefits.
Management, verbatim
The strong commercial momentum we experienced during the first quarter continued into the second quarter. TiO 2 volumes came in at the high end of our guidance and at the highest level since the second quarter of 2022.
John Romano, Chief Executive Officer
Operationally, we continued to realize benefits from our cost improvement program, which remains on track to deliver at the higher end of the $125-$175 million annual run-rate savings target by the end of 2026.
John Romano, Chief Executive Officer
Cash generation remains a key priority for our business and we delivered $60 million of positive free cash flow in the second quarter.
John Romano, Chief Executive Officer
Not in the filing
stated, not guessed- Gross profit and gross margin
- Operating cash flow
- Tax rate
- Share repurchases
- Dividends
- Diluted weighted-average shares
- Prior-year and prior-quarter adjusted net loss attributable to Tronox
- Prior-year and prior-quarter selling, general and administrative expenses
- Prior-year and prior-quarter net interest expense
- Prior-year and prior-quarter depreciation, depletion and amortization expense
- Prior-year and prior-quarter capital expenditures
- Prior-year and prior-quarter cash, debt, liquidity and net leverage
- Quantitative Q3 2026 revenue guidance
- Quantitative Q3 2026 gross-margin guidance
- Quantitative Q3 2026 operating-expense guidance
- Quantitative Q3 2026 tax-rate guidance
- Previous-release outlook for comparison
AlphaAI 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.