Executive Summary

Q1 2025 was operationally resilient but mixed versus expectations: revenue fell 6% YoY to $442.9M as volumes (-3%), FX (-3%) and price/mix (-1%) pressured results, partially offset by acquisitions (+1%); adjusted EBITDA of $69.0M declined 17% YoY, though improved sequentially with gross margin up 120 bps to 36.4% .
Versus S&P Global consensus, KWR modestly beat non-GAAP EPS ($1.58 vs $1.57*) but missed on revenue ($442.9M vs $454.8M*) and EBITDA (company adj. EBITDA $69.0M vs S&P EBITDA consensus $68.4M*, noting methodology differences) .
Management pivoted its 2025 outlook from 4Q’s “growth” message to “revenue and earnings in line with 2024,” citing continued soft end-markets and tariff uncertainty; Q2 is expected to be modestly better seasonally with Dipsol contribution and flat core SG&A .
Strategic M&A continues: CSI (Feb), Natech (Apr) and Dipsol (Apr; ~$155M, ~10.5x TTM EBITDA, below 9x post-synergies) expand advanced solutions and Asian footprint; Dipsol did ~$82M sales and ~$15M EBITDA in 2024 and should add a few points of 2025 growth .

What Went Well and What Went Wrong

What Went Well
- Sequential improvement: adjusted EBITDA rose ~$4M QoQ and gross margin improved 120 bps to 36.4%, driven by mix and cost actions .
- Share gains and Asia/Pacific growth: volumes in Asia/Pacific grew YoY; pipeline and new business wins tracked high-end of 2–4% target .
- Balance sheet and liquidity intact: net debt ~$551M, leverage 1.9x TTM adj. EBITDA; no major maturities until 2027; cost of debt on credit facility ~5.2% in Q1 .
What Went Wrong
- Macro and tariffs weighed on demand: Americas and EMEA volumes fell on soft industrial activity and tariff-related uncertainty; FX was a 3% headwind; price/mix -1% .
- Profitability pressure vs prior year: adjusted EBITDA -17% YoY; non-GAAP EPS down to $1.58 from $2.09 on lower sales and lower segment margins .
- Cash generation seasonally weak: operating cash flow was a $3.1M use on lower operating performance, incentive payments, restructuring cash outflows and working capital .

Management quotes:

“First quarter results improved compared to the prior quarter… driven by a combination of share gains, improved margins and our cost and optimization actions” .
“We now expect [end-market softness] will persist at least into the second half of the year… we expect revenue and earnings will be in-line with 2024” .
“We aim to… return to growth; reduce complexity; and effectively deploy capital… including acquisitions of Dipsol… and Natech” .

Financial Results

Headline Performance vs Prior Periods and Estimates

Metric	Q1 2025 Actual	YoY Change	Seq vs Q4’24	S&P Global Consensus	Beat/Miss
Revenue ($M)	$442.9	-5.7%	~flat	$454.8*	Miss
Adjusted EBITDA ($M)	$69.0	-17.1%	+$4M QoQ	$68.4*	Mixed (methodology)
Gross Margin (%)	36.4%	-2.2 pts (vs 38.7%)	+1.2 pts QoQ	N/A	—
GAAP Diluted EPS ($)	$0.73	—	—	N/A	—
Non-GAAP Diluted EPS ($)	$1.58	-24.6%	—	$1.57*	Beat

Note: S&P Global consensus marked with asterisks; see Estimates Context for sourcing and methodology.

P&L Trend (last 3 quarters)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$462.3	$444.1	$442.9
Gross Margin (%)	37.3%	35.2%	36.4%
Adjusted EBITDA ($M)	$78.6	$64.8	$69.0
Adjusted EBITDA Margin (%)	17.0%	14.6%	15.6%
GAAP Net Income ($M)	$32.3	$14.2	$12.9
GAAP Diluted EPS ($)	$1.81	$0.81	$0.73
Non-GAAP EPS ($)	$1.89	$1.33	$1.58

Segment Breakdown – Q1 2025 vs Q1 2024

Segment	Net Sales Q1’24 ($M)	Net Sales Q1’25 ($M)	Segment Op. Earnings Q1’24 ($M)	Segment Op. Earnings Q1’25 ($M)
Americas	$229.8	$213.7	$66.8	$58.5
EMEA	$138.4	$129.3	$29.6	$23.4
Asia/Pacific	$101.6	$99.9	$30.4	$25.9
Total	$469.8	$442.9	$126.7	$107.8

Sales variance drivers (Q1’25 vs Q1’24): Volumes -3%, Price/Mix -1%, FX -3%, Acquisitions +1% .

KPIs and Balance Sheet

KPI	Q1 2025
Volume change YoY	-3%
FX impact	-3%
Price/Mix	-1%
Acquisitions contribution	+1%
Operating Cash Flow	-$3.1M
Capital Expenditures	~$12.3M
Gross Debt	$737.0M
Cash & Equivalents	$186.2M
Net Debt	~$550.8M
Net Leverage (TTM adj. EBITDA)	~1.9x
Cost of debt on credit facility	~5.2% (Q1’25)

Non-GAAP adjustments driving EPS bridge (per share): Restructuring $0.62, Acquisition-related $0.14, Loss on acquisition hedges $0.08, Discrete tax items $0.08, Currency hyperinflation $0.03, Gain on sale of property (-$0.09), Other $0.03 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue & Earnings	FY 2025	Deliver growth in 2025 (revenue, adj. EBITDA, earnings)	In-line with 2024 levels	Lowered
Q2 EBITDA	Q2 2025	N/A	Modestly higher vs Q1 on seasonality, share gains, Dipsol; core SG&A ~Q1	New detail
Effective Tax Rate	FY 2025	N/A	~29% (excl. non-core)	New detail
Capex	FY 2025	N/A (unchanged from prior commentary)	2.5%–3.5% of sales	Maintained
Dividend	Ongoing	$0.485 per share declared for 4/30/25	Continue quarterly dividend	Maintained

Management reiterated tariff uncertainty, but expects to mitigate most direct cost impacts via “local-for-local” supply chain; demand impact remains the bigger unknown .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24)	Previous Mentions (Q4’24)	Current Period (Q1’25)	Trend
Macro/tariffs	Soft end-markets; Americas/EMEA weakness; Asia/Pacific improvement	Cost program; expect growth in 2025	Demand softer than anticipated; tariffs adding uncertainty; outlook now “in-line with 2024”	Deteriorated vs prior guide
Gross margin	~37.3%	35.2%	36.4% (+120 bps QoQ)	Sequentially improving
Cost actions	—	Announced $20M run-rate 2025	~$15M in-year 2025 benefit; progressing	Executing
Volumes/Share gains	Slight volume decline YoY	Soft end-markets	Asia/Pacific volumes up; net wins at high end of 2–4% target	Continued share gains
M&A/Portfolio	—	Sutai, IKV completed in 2024	CSI (Feb), Natech (Apr), Dipsol (Apr) expand advanced solutions	Accretive to growth/margins
Pricing/Raw materials	—	—	Targeted price actions where raws rising; mix a factor	Active management
Technology (FLUID INTELLIGENCE)	—	—	R&D reprioritized; automation/efficiency platform gaining traction	Building

Management Commentary

Strategic focus: “Top priorities… returning to growth; reducing complexity; effectively deploying capital,” including reorganizing product leadership, cross-selling, and channel investments (inside sales/e-commerce) to simplify customer experience .
Tariffs: “We can largely mitigate [direct] impacts” via local production and sourcing; demand impact harder to assess .
M&A fit and returns: Dipsol “~10.5x TTM adj. EBITDA and below 9x post-synergy” with solid growth, margins and cultural fit; expected to add “a few percentage points” to 2025 growth .
Margin ambition: “Targeting high-teens (18–19%) EBITDA margins; ultimately 20%+” over time, via pricing, cost actions, manufacturing footprint optimization, and global procurement .

Q&A Highlights

Tariffs and demand: Management expects to mitigate cost-side impacts but highlighted heightened demand uncertainty, especially in Americas/EMEA; Q2 showing normal seasonal pickup so far .
Q2 color: EBITDA to be modestly higher QoQ with seasonal volume uplift, share gains, and Dipsol contribution; core SG&A roughly flat with Q1 .
Dipsol contribution: ~3/4-year in 2025; 2024 size ~$80M sales, ~$15M EBITDA; strategic fit broadens Asian/auto exposure .
Complexity reduction & channels: Aligning strategy/product management to segments; brand architecture and inside sales/e-commerce to better serve long-tail customers and free field sales for larger targets .
Pricing/actions: Targeted pricing where raws increase; footprint optimization (plant closure in Q1) and procurement changes to lower cost base; long-term EBITDA margin target reiterated .

Estimates Context

S&P Global consensus vs actuals (Q1 2025):
- Revenue: $454.8M* vs actual $442.9M (miss) .
- Primary EPS: $1.57* vs actual non-GAAP $1.58 (beat).
- EBITDA: $68.4M* vs company adjusted EBITDA $69.0M and S&P “actual” EBITDA $62.4M*; methodologies may differ from company’s adjusted EBITDA presentation .
Estimate counts: EPS (6), Revenue (5).
Values marked with an asterisk () retrieved from S&P Global (Capital IQ).

Key Takeaways for Investors

Outlook reset: Management shifted from prior expectation of 2025 growth to “flat vs 2024,” reflecting softer demand and tariff uncertainty—an important narrative change likely to drive estimate revisions and near-term sentiment .
Sequential stabilization: Q1 margins and EBITDA improved QoQ; Q2 expected modestly better seasonally with M&A contribution—supports a floor under earnings in the near term .
Mix/FX headwinds persist: FX (-3%) and price/mix (-1%) pressured revenue; selective pricing and portfolio actions should help but watch Asia/Pacific profitability and targeted pricing roll-through .
M&A as a growth lever: Dipsol/CSI/Natech broaden advanced solutions and Asia exposure, adding a few points to 2025 growth and supporting longer-term margin ambition .
Balance sheet capacity: Leverage at ~1.9x with no near-term maturities provides flexibility for ongoing capex (2.5–3.5% of sales) and shareholder returns (dividend maintained) .
Watch catalysts: Tariff developments, second-quarter seasonal pickup durability, Asia/Pacific pricing actions, and progress toward high-teens EBITDA margins .

Additional Document Citations and Data Sources:

Q1 2025 8-K press release and supplemental tables .
Q1 2025 earnings call transcript (prepared remarks and Q&A) .
Q4 2024 8-K (prior quarter) .
Q3 2024 8-K (two quarters back) .
Other Q1 2025 period press releases: Dividend declaration ; Dipsol acquisition announcement .

S&P Global (Capital IQ) consensus figures are marked with an asterisk (*). Values retrieved from S&P Global.

QUAKER CHEMICAL CORP (KWR)·Q1 2025 Earnings Summary