Executive Summary

Q3 2025 delivered resilient profitability amid softer top-line: total net sales were $362.1M (-4% YoY) with net sales from continuing operations flat at $333.1M; Total Adjusted EBITDA rose 14% to $121.2M and margin expanded to 33.5% .
EPS beat but revenue missed vs consensus: Primary EPS of $1.52 vs $1.39 estimate (beat), revenue $333.1M vs $360.4M estimate (miss). Prior quarters showed EPS beats and mixed revenue performance. Values retrieved from S&P Global* (actual revenue); GetEstimates*.
Guidance narrowed: FY25 total net sales to $1.25–$1.35B (from $1.25–$1.40B) and total Adjusted EBITDA to $390–$405M (from $390–$415M) reflecting APT demand and competitive pressures; free cash flow and leverage outlook improved (target ~2.6x by year-end from 2.7x at Q3) .
Strategic catalysts: announced sale of North Charleston CTO refinery and most Industrial Specialties for $110M cash (closing by early 2026; now reported as discontinued ops); investor portfolio update scheduled for Dec 8; continued progress on EV battery materials (CHASM CNT license) .

What Went Well and What Went Wrong

What Went Well

Performance Materials grew sales 3% to $155.0M with >50% segment EBITDA margin (51.5%), underscoring resilience amid auto volatility; CEO noted “best-in-class EBITDA margins of 33%” and “resilience…in a dynamic tariff environment” .
Road Technologies achieved record North America pavement sales, lifting Performance Chemicals continuing ops sales +~5% to $139.9M and segment EBITDA +2% to $24.8M .
Strong cash generation: operating cash flow $129.7M and free cash flow $117.8M; $25M buybacks and net leverage improved to 2.7x; management raised free cash flow outlook and expects ~2.6x leverage by year-end .

What Went Wrong

APT sales fell to $38.2M (from $48.8M), pressured by indirect tariff impacts, weak industrial demand, and competition in China; though margin improved to 25.9%, management cut FY APT revenue/margin expectations .
Price pressure in road markings compressed Performance Chemicals margin to 17.7% (-40 bps) despite record pavement volume; management cited pricing decisions to maintain volumes .
Top-line softness drove total net sales down 4% YoY; continuing ops were flat, but discontinued ops fell to $29.0M net sales, reflecting divestiture classification and repositioning impact .

Financial Results

Quarterly Performance and Cash Generation

Metric	Q1 2025	Q2 2025	Q3 2025
Net Sales ($USD Millions)	$284.0	$365.1	$333.1 (continuing ops) / $362.1 total
Diluted Adjusted EPS ($)	$0.99*	$1.39	$1.52
Adjusted EBITDA Margin (%)	32.1%	30.1%	33.5% (total)
Operating Cash Flow ($USD Millions)	—	$79.0	$129.7
Free Cash Flow ($USD Millions)	$15.0	$66.8	$117.8

Values retrieved from S&P Global* for Q1 Diluted Adjusted EPS.

Consensus vs Actuals (S&P Global)

Metric	Q1 2025 Estimate	Q1 2025 Actual	Q2 2025 Estimate	Q2 2025 Actual	Q3 2025 Estimate	Q3 2025 Actual
Primary EPS Consensus Mean ($)	0.74*	0.99*	1.16*	1.39	1.39*	1.52
Revenue Consensus Mean ($USD Millions)	285.47*	284.0	378.70*	365.1	360.43*	333.1

Values retrieved from S&P Global*.

Segment Breakdown (Quarterly)

Segment	Q3 2024 Net Sales ($M)	Q3 2025 Net Sales ($M)	YoY	Q3 2024 Segment EBITDA ($M)	Q3 2025 Segment EBITDA ($M)	Margin Q3 2025
Performance Materials	$151.1	$155.0	+3%	$80.6	$79.9	51.5%
Performance Chemicals (cont. ops)	$133.9	$139.9	+~5%	$24.3	$24.8	17.7%
Advanced Polymer Technologies	$48.8	$38.2	-22%	$9.8	$9.9	25.9%

KPIs

KPI	Q3 2025	Q3 2024 / Prior Reference
Net Leverage (Net Debt / LTM Total Adjusted EBITDA)	2.7x	3.0x (Q2 2025)
Net Debt ($M)	$1,096.5	—
Share Repurchases	$25M in Q3; $328M authorization remaining	$353.4M authorization remaining (Q2)
Total Adjusted EBITDA ($M)	$121.2	$106.4 (Q3 2024)
Operating Cash Flow ($M)	$129.7	$46.5 (Q3 2024)
Free Cash Flow ($M)	$117.8	$28.5 (Q3 2024)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Net Sales	FY 2025	$1.25–$1.40B	$1.25–$1.35B	Lowered top end
Total Adjusted EBITDA	FY 2025	$390–$415M	$390–$405M	Narrowed range (lowered top end)
Free Cash Flow / Leverage	FY 2025	FCF $230–$260M; <2.8x leverage by YE	Expect ~2.6x leverage by YE; raised FCF outlook (qualitative)	Improved leverage target

Note: Company presents forward guidance on a total basis inclusive of continuing and discontinued ops and uses non-GAAP measures with reconciliations in release .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Auto production & PM resilience	Q1: Annual pricing, ability to pivot to filtration; North America forecast -9–10% prompted wider guidance . Q2: PM maintained >50% margins; North America outlook improved but still down YoY .	PM sales +3%; margins >50%; management expects Q4 “a bit softer” and full-year PM revenue “flat to slightly down” with >50% margin .	Stable margins; cautious near-term volumes
Tariffs & indirect impacts	Q1: Direct impacts minimal; mitigation underway (pricing, localization) .	APT demand depressed by indirect tariff impacts; PM resilience in a “dynamic tariff environment” .	Ongoing headwind for APT
Road Technologies & pavement	Q2: Wet weather delayed paving; margin improvement; consumed high-cost CTO .	Record North America pavement sales; slight margin compression due to road markings pricing .	Strong demand; price competitive
Portfolio actions (Divestiture)	Q2: Advanced sale stages; guidance raised low-end EBITDA .	$110M sale announced; discontinued ops classification; majority proceeds likely to reduce debt .	Execution milestone
Leverage & capital allocation	Q1: Target 2–2.5x long-term . Q2: Net leverage at 3.0x; FCF guide raised .	Net leverage 2.7x; targeting ~2.6x YE; $25M buybacks .	Improving
EV/battery initiatives	Q2: Nexeon partnership progress; process purification focus .	CHASM CNT license expands EV battery materials strategy; near-term Nexeon plant startup (not using INGV carbon in first generation) .	Building optionality

Management Commentary

“Our strong quarterly results highlight the resilience of Performance Materials in a dynamic tariff environment, the successful execution of our repositioning actions, and record pavement sales in North America... enabled us to accelerate deleveraging and resume share repurchases.” — David Li, CEO .
“Adjusted earnings improved significantly… driving Adjusted EBITDA margin to 33.5%… free cash flow of $118M enabled us to repurchase $25M of shares… ended the quarter with net leverage of 2.7x.” — Mary Dean Hall, CFO .
“We expect to communicate the results of our portfolio review by the end of the year.” — David Li, CEO .
“We are raising full-year free cash flow guidance and now expect net leverage to be around 2.6x by year-end… adjusting our full-year outlook to narrow the top end of our sales and EBITDA range.” — David Li, CEO .
“We will likely use the majority of the proceeds [from the sale] towards further debt reduction.” — David Li, CEO .

Q&A Highlights

PM outlook and supply chain: Management acknowledged tariff and supply chain noise (aluminum plant fire, chips) but said guidance reflects impacts; PM remains durable with leadership position; full-year PM revenue flat-to-down slightly with >50% margins .
Working capital and leverage: Balance sheet disclosure isolates discontinued ops; YE net leverage targeted at ~2.6x; majority of $110M divestiture proceeds earmarked for debt reduction .
APT recovery and competition: Continued indirect tariff headwinds and China competition; FY APT revenue down mid-teens with margin 15–20% (impacted by Q2 outage) .
Nexeon and EV materials: Nexeon plant expected to start in coming months; first generation not using INGV activated carbon; CHASM license accelerates CNT manufacturing ambitions .
Discontinued ops sizing: Discontinued ops viewed as mid-single-digit EBITDA business; full-year estimates imply ~$130M sales at ~6% EBITDA margin including indirect costs .

Estimates Context

Q3 2025: EPS $1.52 beat vs $1.39 consensus; revenue $333.1M missed vs $360.4M consensus. Values retrieved from S&P Global*; actuals corroborated by company filings .
Q2 2025: EPS $1.39 beat vs $1.16 consensus; revenue $365.1M missed vs $378.7M consensus. Values retrieved from S&P Global*; actuals from company .
Q1 2025: EPS $0.99 beat vs $0.74 consensus; revenue $284.0M slightly below $285.5M consensus. Values retrieved from S&P Global*; actual revenue from company .
Implications: Street may lower APT revenue trajectory and trim consolidated revenue forecasts; margin durability and FCF outperformance could support upward revisions to EBITDA and leverage targets. Values retrieved from S&P Global*; management guidance narrowed on top-line but reaffirmed profitability focus .

Key Takeaways for Investors

Profitability and FCF are the near-term anchors: total Adjusted EBITDA margin expanded to 33.5% and FCF hit $117.8M, enabling deleveraging to 2.7x and buybacks; YE leverage targeted ~2.6x .
Segment mix is constructive: PM maintains >50% margins; Road Technologies strength offsets APT softness; watch road markings pricing pressure .
Guidance prudently narrowed: FY25 sales and EBITDA top ends cut, primarily due to APT markets; margin profile intact and cash generation improving .
Strategic portfolio execution is a catalyst: $110M divestiture (closing early 2026) simplifies portfolio, reduces CTO volatility, and supports debt paydown; Dec 8 strategic update could reset medium-term narrative .
Revenue risk vs estimate remains: Q3 revenue miss vs consensus underscores caution on APT and macro demand; traders should weigh margin/FCF strength vs top-line volatility ; GetEstimates*.
Emerging EV materials optionality: CHASM CNT license and Nexeon partnership broaden battery materials exposure; near-term financial impact modest but strategic optionality positive .
Near-term trading: Expect stock sensitivity to Dec 8 portfolio update, any tariff developments, and Q4 PM/road trends; margin and FCF beats are potential positive catalysts vs top-line risk .

Note on non-GAAP: Company emphasizes Total Adjusted EBITDA, diluted adjusted EPS, and total net sales (including discontinued ops) with reconciliations provided in the appendix of the press release **[1653477_0001653477-25-000124_ex99109302025.htm:3]** **[1653477_e219704bca5d4623ac9c4208f05142c9_12]** **[1653477_e219704bca5d4623ac9c4208f05142c9_16]**.

Ingevity Corp (NGVT)·Q3 2025 Earnings Summary