Executive Summary

Q1 2025 delivered resilient top-line and a clean beat vs consensus: revenue $0.789B (-2.7% YoY; +1.9% organic) and adjusted EPS $0.54, beating S&P Global consensus of ~$0.769B revenue and ~$$0.495 EPS; adjusted EBITDA was $114M, at the high end of guidance, with margin 14.5% . Values with * are from S&P Global; see disclaimer below.
Guidance maintained: FY25 adjusted EBITDA $600–$625M, adjusted EPS $3.90–$4.20, operating cash flow $300–$325M; Q2 adjusted EBITDA guided to $150–$160M .
Segment mix: Engineering Adhesives (EA) margin expanded to 18.7% (+180 bps YoY) on pricing, restructuring, and ND Industries; HHC organic revenue +4% but margin compressed on raw materials; BAS revenue +2% with stable margin .
Balance sheet/cash: net debt rose to $2.07B (3.5x TTM adjusted EBITDA) largely due to acquisitions; cash from operations was -$52.9M as working capital built with revenue growth; buybacks of 678K shares executed opportunistically .
Near-term stock catalysts: price realization and raw material moderation, continued EA margin uplift, roofing/data-center exposure in BAS, and opportunistic buybacks; management reiterated a path toward >20% EBITDA margin via footprint streamlining and portfolio optimization .

What Went Well and What Went Wrong

What Went Well
- Beat vs consensus: Adjusted EPS $0.54 vs ~$0.495*; revenue $0.789B vs ~$0.769B*; EBITDA delivered at high end of the range . Values with * are from S&P Global; see disclaimer below.
- EA margin expansion: EA adjusted EBITDA margin rose to 18.7% (+180 bps YoY) on favorable pricing/raws, restructuring, and ND Industries acquisition contribution .
- BAS strategic positioning: strength in roofing/data centers; new eco spray adhesive (PG‑1 EF ECO2) supports labor-constrained installs and ESG specs; “we are in the right spaces…delivering innovation” .
What Went Wrong
- HHC margin compression: adjusted EBITDA margin fell to 12.7% from 17.1% YoY as raw material inflation (notably hydrogenated hydrocarbon resins) outweighed price/volume; pricing realization lagged in prior quarter .
- Working capital and cash flow: cash from operations was -$52.9M vs +$47.4M last year on higher working capital needs associated with growth; full-year cash flow expected to be 2H-weighted .
- Leverage drift: net debt rose to $2.07B (3.5x) vs 3.1x at FY24; management slowed M&A pipeline timing and prioritized buybacks amid market volatility .

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($USD Billions)	$0.810	$0.923	$0.789
Adjusted EPS (diluted) ($USD)	$0.67	$0.92	$0.54
Gross Margin (%)	29.5%	28.7%	28.8%
Adjusted Gross Margin (%)	30.1%	29.6%	29.6%
Adjusted EBITDA Margin (%)	15.2%	16.1%	14.5%

Q1 2025 vs S&P Global Consensus

Metric	Consensus	Actual
Revenue ($USD Billions)	$0.769*	$0.789
Adjusted EPS (diluted) ($USD)	$0.495*	$0.54

Values with * are from S&P Global.

Segment Performance (Q1 2025 vs Q1 2024)

Segment	Net Revenue Q1 2024 ($MM)	Net Revenue Q1 2025 ($MM)	Adj. EBITDA Margin Q1 2024 (%)	Adj. EBITDA Margin Q1 2025 (%)
Hygiene, Health & Consumable (HHC)	$368.1	$368.2	17.1%	12.7%
Engineering Adhesives (EA)	$226.1	$236.8	16.9%	18.7%
Building Adhesive Solutions (BAS)	$179.7	$183.7	11.9%	11.9%
Corporate Unallocated	$36.6	$0.0	1.5%	NMP
Total	$810.4	$788.7	15.2%	14.5%

Key KPIs

KPI	Q4 2024	Q1 2025
Net Debt ($MM)	$1,841	$2,074
Net Debt / TTM Adj. EBITDA (x)	3.1x	3.5x
Net Working Capital ($MM)	$534	$543
NWC / Annualized Revenue (%)	14.5%	17.2%
Cash from Operations ($MM)	n/a	-$52.9
Share Repurchases (shares)	n/a	678,000

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenue growth (reported)	FY 2025	Down 2% to 4%	Down 2% to 4%	Maintained
Net Revenue growth (ex-Flooring)	FY 2025	Up 1% to 2%	Up 1% to 2%	Maintained
Organic Revenue growth	FY 2025	Flat to +2%	Flat to +2%	Maintained
Adjusted EBITDA ($MM)	FY 2025	$600–$625	$600–$625	Maintained
Adjusted EPS (diluted) ($USD)	FY 2025	$3.90–$4.20	$3.90–$4.20	Maintained
Operating Cash Flow ($MM)	FY 2025	$300–$325	$300–$325	Maintained
Adjusted EBITDA ($MM)	Q2 2025	—	$150–$160	New quarterly guide

Note: Subsequent to Q1, FUL raised FY25 adjusted EBITDA to $615–$630M and adjusted EPS to $4.10–$4.30 in its Q2 release (context only) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 & Q4 2024)	Current Period (Q1 2025)	Trend
Pricing vs raw materials	Q4: raw materials turned headwind; pricing delays in HHC pressured margins	Q1: raw costs still higher YoY; expect favorable net price/raw dynamic in rest of year; targeting ~$55M price/raw benefit	Improving through 2025
Supply chain/footprint	Announced manufacturing/logistics consolidation, $75M pre-tax savings by 2030 (minimal 2025 benefit)	Emphasis on “produce in region” (97% regional sourcing/production), natural hedge vs tariffs and FX	Structural uplift; execution ongoing
HHC business	Q4: broad deceleration; margin down 600 bps vs prior-year peak; pricing realization delayed	Q1: organic revenue +4%; margin 12.7% as raw materials weighed; confident in pricing traction and margin normalization to 15–17% in last three quarters	Revenue stabilizing; margin repair expected
EA segment (incl. solar)	Q4: solar weak; EA slightly down but margin ~19.7%	Q1: excluding solar, growth positive; EBITDA +16%, margin 18.7% on pricing, restructuring, ND Industries	Margin up; solar top-line drag persists
BAS/roofing & data centers	Q4: roofing +30% YoY; data centers supportive	Q1: continued strength; launch of PG‑1 EF ECO2 spray adhesive enabling low-VOC installs, aligned to data center build	Structural growth exposure
Tariffs/macro/pre-buying	—	Limited evidence of pre-buying; cautious customers; durable goods soft in U.S.	Cautious demand
Regional trends	Q4: Americas slight down; EIMEA -0.8%; APAC flat ex-solar +6%	Q1: Americas -1% organic; EIMEA +4% (HHC strength); APAC +7% led by China	EIMEA/APAC improving
Regulatory themes	—	PFAS-free alternatives gaining traction, esp. electronics; FUL positioned to lead transitions	Opportunity building

Management Commentary

“I’m encouraged by our first quarter financial performance and positive organic sales growth…we remain focused on pricing discipline, market share gains, and effectively managing our cost structure…drive our business toward our greater than 20% EBITDA margin target.” — Celeste Mastin, CEO .
“EBITDA of $114 million, which was at the high end of our guidance range…Foreign exchange negatively impacted adjusted EBITDA by approximately $5 million year-on-year.” — John Corkrean, CFO .
“Our strategy to produce in the same region where we sell…acts as a natural hedge against currency fluctuations…reduces our exposure to tariffs. On average, 97% of what we sell in a region is produced in the same region.” — Celeste Mastin .
“We expect to continue to repurchase shares throughout the year on an opportunistic basis…we have temporarily slowed the timing of M&A transactions (given leverage 3.5x).” — John Corkrean .
“In the solar space, it remains very competitive…repositioning away from cheaper Chinese panels…margins will appreciate significantly.” — Celeste Mastin .

Q&A Highlights

Tariffs/pre-buying: Management saw no meaningful pre-buying; customers remain cautious; durable goods weak in U.S. .
HHC pricing/margin trajectory: Pricing expected up 1–2% FY; last three quarters HHC EBITDA margin targeted 15–17% as pricing executes and raw cost headwinds subside .
Working capital/cash: CFO reaffirmed FY operating cash flow $300–$325M (2H-weighted), with working capital as the main swing factor and sequential profit improvement expected .
Solar headwind quantified: FY solar revenue expected down ~20% YoY; ~$20M EBITDA drag at ~35% flow-through .
China trends: HHC/EA performing well; EA up high-teens ex-solar in China; consumer electronics relatively soft; taking share in EVs and electronics .

Estimates Context

Q1 2025 beat vs S&P Global consensus on both revenue and adjusted EPS: revenue $0.789B vs ~$0.769B*, adjusted EPS $0.54 vs ~$0.495* . Values with * are from S&P Global.
EBITDA consensus comparability: company reports adjusted EBITDA of $114M; consensus methodologies may differ from company’s adjusted basis; management judged performance at the high end of guidance . Values retrieved from S&P Global.

Key Takeaways for Investors

Q1 set a constructive tone: revenue and EPS beat, EBITDA at the high end of guidance, despite raw material inflation and FX headwinds .
HHC margin repair is the key swing factor: pricing actions are in flight and expected to normalize margins to 15–17% over the next three quarters; monitor price realization and raw trends .
EA is a bright spot: margin expansion and acquisition synergies should continue to support profitability even as solar remains a top-line headwind .
BAS levered to data centers/roofing: innovation (PG‑1 EF ECO2) and spec wins in priority end-markets underpin stable growth/margins .
Balance sheet watch: leverage at 3.5x TTM adjusted EBITDA (post M&A) necessitates disciplined capital allocation; buybacks may continue opportunistically while M&A pacing slows .
FY guide intact post-Q1 (later raised in Q2): near-term catalysts include Q2 EBITDA delivery ($150–$160M) and continued margin expansion on price/raw actions .
Tactical implication: favor setups into prints where pricing traction and raw moderation can drive sequential EBITDA margin improvement; sensitivity to durable goods demand and FX remains .

S&P Global disclaimer: Values marked with * are retrieved from S&P Global.

FULLER H B CO (FUL)·Q1 2025 Earnings Summary