Executive Summary

Q1 2025 delivered solid top-line and profit growth year over year: net sales rose 22% to $72.0M, Adjusted EBITDA increased 49% to $18.1M, and Adjusted EPS was $0.03, with GAAP diluted EPS of $0.36 .
Versus S&P Global consensus, PRM modestly missed revenue ($72.0M vs $75.0M*) but beat EPS ($0.03 vs $0.01*). Coverage was thin (1–2 estimates), but headline was a small revenue miss and EPS beat (likely mix/opex control) .
Values with asterisks (*) retrieved from S&P Global.
Fire Safety was the bright spot (net sales +48% YoY to $37.2M; segment Adj. EBITDA swung to $10.1M from a small loss) as early-season wildfire activity (notably California) and execution offset weaker suppressants comps . Specialty Products grew sales 3% to $34.9M but Adj. EBITDA fell to $8.0M due to extended downtime at a third-party P2S5 tolling facility; management does not expect full recovery of lost 2025 volume, with normalization targeted for 2026 .
Capital deployment accelerated: $10M closed on first IMS add-on product lines; 0.9M shares repurchased (~$8.2M at $9.19 average); cash ended at ~$200M and net leverage ~1.7x, preserving significant flexibility . Management reiterated long-term assumptions and emphasized a disciplined capital allocation/M&A pipeline .

What Went Well and What Went Wrong

What Went Well

Fire Safety outperformance: Segment revenue +48% YoY to $37.2M and Adjusted EBITDA improved to $10.1M (from a ~$0.2M loss), driven by elevated early-season wildfire activity (esp. California) and strong execution .
International and NA wildfire support: Management highlighted elevated early-season activity in North America and more typical activity in Australia; “First quarter adjusted EBITDA reached $18.1 million, reflecting solid execution ... and fire activity in both North America and international markets.” .
Capital allocation against high-IRR opportunities: $10M invested in IMS product-line acquisitions with expectations to deploy “significant capital annually” at IRRs above threshold; $8M in buybacks when equity traded “meaningfully below intrinsic value” .

What Went Wrong

Specialty Products operational disruption: Third-party U.S. P2S5 plant outage reduced base business sales by ~$6.5M in Q1; segment Adj. EBITDA fell to $8.0M from $12.4M YoY; management does not expect full recovery in 2025 but a rebound to normalized levels in 2026 .
Tough YoY comp in suppressants: Q1 2024 benefitted from late-2023 fluorine-free mil-spec product launch, creating a difficult comparison for suppressants in Q1 2025 .
Trade policy/tariffs as minor headwind: Direct exposure estimated at 2–3% of annual EBITDA; management is pulling mitigation levers but may not fully offset .

Financial Results

Consolidated Performance vs Prior Quarters

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$288.4	$86.2	$72.0
GAAP Diluted EPS	$(0.61)	$0.90	$0.36
Adjusted EPS	$0.75	$0.13	$0.03
Adjusted EBITDA ($M)	$170.4	$32.9	$18.1
Adjusted EBITDA Margin %	59.1% (calc from $170.4/$288.4)	38.1% (calc from $32.9/$86.2)	25.1% (calc from $18.1/$72.0)

Notes: EBITDA margins are calculated from cited revenue/EBITDA.

Segment Breakdown

Segment	Metric	Q3 2024	Q4 2024	Q1 2025
Fire Safety	Net Sales ($M)	$251.8	$60.7	$37.2
	Adjusted EBITDA ($M)	$157.5	$27.2	$10.1
Specialty Products	Net Sales ($M)	$36.6	$25.5	$34.9
	Adjusted EBITDA ($M)	$12.9	$5.6	$8.0

Q1 2025 YoY growth: Fire Safety net sales +48% and Specialty Products +3% .

Q1 2025 Actual vs S&P Global Consensus

Metric	Actual	Consensus	Surprise
Revenue ($M)	$72.0	$75.0*	$(3.0)
Primary/Adjusted EPS ($)	$0.03	$0.01*	+$0.02

Coverage: Revenue (1 estimate*), EPS (2 estimates*) for Q1 2025. Values with asterisks (*) retrieved from S&P Global.

KPIs and Balance Sheet

KPI	Q1 2025
Free Cash Flow ($M)	$18.9 (CFO definition: CFO less capex)
Cash and Cash Equivalents ($M)	$200.1
Net Debt / LTM Adjusted EBITDA (x)	~1.7x
Share Repurchases	0.9M shares for ~$8.2M at $9.19 avg

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Interest Expense	FY	~$40M annual long-term assumption	Unchanged; Q1 interest $9.6M	Maintained
Tax-deductible D&A and other tax deductions	2025	$20–$25M	Consistent with long-term assumptions	Maintained
Cash Taxes	Multi-year	Approx. 20–25% of Adjusted EBITDA after tax-deductible D&A and interest (timing varies)	Unchanged view; Q1 $0.5M paid (timing)	Maintained
Capital Expenditures	Annual	$15–$20M target (raised in Q4)	On track; Q1 $4.8M	Maintained
Working Capital	Long-term	~10–20% of change in revenue (LT assumption)	Seasonal, managed well in Q1 (AR down)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Operating model and decentralization	Emphasis on value-driver pillars; record Adj. EBITDA and capital allocation discipline	“Operate in a highly decentralized manner”; empowered GMs; focus on three value drivers	Consistent, reiterated
IMS platform and M&A	Acquired IMS for ~$33M; M&A to raise leverage toward target	First add-on product lines ($10M) closed; expect significant annual capital deployment into add-ons	Scaling IMS via bolt-ons
Fire season backdrop and capacity	2024 near-normal severity; capacity constraints in aerial firefighting; investments in bases	Elevated early activity (CA); “gold standard” positioning; readiness emphasized	Near-term tailwind; structural capacity build
Fluorine-free suppressants transition	Market leadership; high win rates (airports)	Tough Q1 comp from late-2023 launch; demand steady; no slowdown in conversions observed	Intact LT adoption; near-term comp headwind
Trade policy/tariffs	Limited sensitivity noted	2–3% of annual EBITDA direct exposure; mitigation underway	Manageable headwind
Tax/Redomiciliation	Re-domicile to Delaware; improved tax profile; 20–25% cash tax framework	Assumptions unchanged; timing effects in Q1 taxes	Structural tailwind maintained

Management Commentary

Strategy and operating model: “Our strategy is built on three operational pillars… drive profitable new business, achieve continual productivity improvements, and provide increasing value to customers… We operate our businesses in a highly decentralized manner.” — CEO Haitham Khouri .
Fire Safety competitive position: “Perimeter is the gold standard of retardant programs… we invest very heavily in R&D… equipment and our people… it will just be harder and harder for folks to unseat us over time.” — CEO .
Specialty Products disruption: “Extensive downtime at our manufacturing provider caused Specialty Products to miss out on those sales in Q1… these missed sales will not be fully recovered in 2025 and will reduce this year’s adjusted EBITDA… rebound to normalized levels in 2026.” — CFO Kyle Sable .
Capital allocation: “We allocated nearly $23 million of capital in the quarter… invest in our business organically… invested $10 million in Q1… repurchased 900,000 shares for approximately $8 million.” — CFO .
Balance sheet strength: “Single series of fixed-rate notes at 5%… maturing in 4Q 2029… levered 1.7x net debt to LTM adjusted EBITDA… around $200 million in cash and an undrawn $100 million revolver.” — CFO .

Q&A Highlights

Tariffs/trade policy impact: Direct exposure estimated at 2–3% of annual Adjusted EBITDA; largely cost-side; mitigation actions underway; uncertain if fully offsettable .
Suppressants cadence: Q1 was the toughest comp; expectations improve into Q2–Q3 as the year builds .
Competitive dynamics (retardants): Less likely that alternative non-ammonium phosphate chemistries are qualified near term; PRM focuses on R&D and service differentiation .
Macro sensitivity: Retardants and most suppressants have very little economic sensitivity; P2S5 tied to OECD ICE miles driven with modest cyclical variability .
Guidance stance: Long-term assumptions unchanged; minor Q1 working-capital tailwind called “noise” at the full-year level .

Estimates Context

Q1 2025 vs S&P Global: Revenue missed ($72.0M vs $75.0M*) while EPS beat ($0.03 vs $0.01*). Coverage narrow (1–2 estimates), so consensus signal is limited .
Implications: Expect sell-side to trim 2025 Specialty Products estimates to reflect non-recoverable volumes from Q1 outage, partially offset by Fire Safety momentum and IMS bolt-ons, with long-term model unchanged per management .
Values with asterisks (*) retrieved from S&P Global.

Key Takeaways for Investors

Fire Safety momentum and early-season activity supported a clean EPS beat versus limited consensus; Specialty Products outage is the key 2025 headwind, with normalization targeted in 2026 .
Structural position in retardants remains strong; management sees lower likelihood of alternative chemistries and continues to invest in R&D/equipment/service — a moat enhancer .
Capital allocation flywheel is active: $10M IMS add-ons, opportunistic buybacks, ~1.7x net leverage, ~$200M cash — ample capacity for further bolt-ons at target IRRs .
Long-term assumptions (interest, taxes, capex, WC) were maintained; Q1 tax/working-capital benefits were timing-related and not a change to the full-year framework .
Trading setup: Near term, watch U.S. wildfire severity and international activity, plus updates on P2S5 plant stability; medium term, monitor IMS pipeline execution and incremental bolt-ons as catalysts .
Risk checks: Tariff headwind (2–3% EBITDA) appears manageable; suppressants faces cadence/comp effects; third-party manufacturing reliability is the focal execution risk in Specialty Products .

Additional Context: Other Q1 2025 Press Releases

Product innovation: Launched SOLBERG SPARTAN 1% fluorine-free Class A/B foam, marketed as “one foam for 99% of fires,” emphasizing firefighter safety, water savings and broad equipment compatibility .
Customer engagement: Introduced Industrial Foam School with initial sessions in May and October 2025 to support fluorine-free adoption and training across industrial/municipal stakeholders .

Perimeter Solutions, Inc. (PRM)·Q1 2025 Earnings Summary