Executive Summary

Q4 delivered strong year-over-year growth with net sales up 45% to $86.2M and Adjusted EBITDA up 193% to $32.9M, led by Fire Safety (sales +72%) and ongoing suppressants traction; GAAP EPS was $0.90 vs adjusted EPS $0.13, reflecting large non-GAAP adjustments and a substantial tax benefit .
FY24 inflected: Adjusted EBITDA nearly tripled to $280.3M, free cash flow reached $172.9M, and inventory declined by $29.3M as working capital turned into a cash source; net leverage ended at 1.7x with $198.5M cash and an undrawn $100M revolver .
Capital allocation/tax: Management raised annual CapEx guide to $15–$20M (from $10–$15M), affirmed ~ $40M annual interest expense, and outlined a structurally improved cash tax profile (cash taxes ≈ 20–25% of adjusted EBITDA after tax-deductible D&A and interest) post re-domiciliation .
M&A optionality: Closed the IMS PCB acquisition for ~$32.8M to expand Specialty Products; management reiterated a willingness to increase leverage toward IPO-era/ ~3.5x levels over time via value-accretive M&A, while remaining patient and returns-focused .
Estimates context: S&P Global consensus for Q4 revenue/EPS was unavailable at time of retrieval; results should prompt upward revisions to Fire Safety profitability run-rate and highlight lower structural cash taxes; near-term trading catalysts include elevated FCF conversion, raised CapEx for high-IRR projects, and active M&A pipeline . S&P Global consensus unavailable at time of retrieval.

What Went Well and What Went Wrong

What Went Well

Fire Safety strength and normalization: Q4 Fire Safety sales +72% to $60.7M and Adjusted EBITDA +289% to $27.2M, driven by retardant demand and execution of value-driver initiatives; suppressants continued to benefit from fluorine-free conversions . “Our suppressants products experienced strong growth in 2024 as we continue to benefit from the transition to fluorine-free foam” — CFO .
FCF and balance sheet: FY24 free cash flow of $172.9M and cash of ~$198.5M, with net leverage at 1.7x and an undrawn $100M revolver, enabling active capital allocation and M&A flexibility . “We are exceptionally proud that our team delivered on both elements in 2024 and remain focused on those 2 aims for 2025.” — CFO .
High-IRR reinvestment and raised CapEx: CapEx framework lifted to $15–$20M to fund productivity and profitable new business (e.g., airbase upgrades, mixing systems) with attractive returns; Q4 CapEx ~$6.5M aligns with the higher run-rate . “Our CapEx pipeline is filled with value-creating opportunities, largely in Fire Safety.” — CFO (Q&A) .

What Went Wrong

GAAP volatility from non-GAAP items: Q4 GAAP EPS $0.90 was significantly impacted by a large income tax benefit ($94.2M) and a negative founders advisory fees line (-$54.8M), masking underlying earnings power vs adjusted EPS $0.13 .
Tax cash timing noise: Cash taxes rose (Q4 cash taxes $43.1M; FY $74.6M), and deferred tax movements tied to re-domiciliation created noise; management emphasized timing and structural tax improvements ahead .
Limited visibility on explicit revenue/EPS guidance: While structural frameworks improved (tax, CapEx), management did not issue numeric 2025 revenue/EPS guidance; estimates benchmarking was constrained by unavailable consensus at time of retrieval.

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Net Sales ($M)	$127.276	$288.417	$86.231
GAAP Diluted EPS	$0.14	$(0.61)	$0.90
Adjusted Diluted EPS	$0.25	$0.75	$0.13
Gross Profit ($M)	$73.267	$181.222	$41.895
Gross Margin %	57.6% (calc from )	62.8% (calc from )	48.6% (calc from )
Adjusted EBITDA ($M)	$64.908	$170.376	$32.874
Adjusted EBITDA Margin %	51.0% (calc from )	59.1% (calc from )	38.1% (calc from )
Consensus Revenue ($M)	—	—	N/A (S&P Global consensus unavailable at time of retrieval)
Consensus EPS	—	—	N/A (S&P Global consensus unavailable at time of retrieval)

Segment breakdown

Segment	Q2 2024 Sales ($M)	Q2 2024 Adj. EBITDA ($M)	Q3 2024 Sales ($M)	Q3 2024 Adj. EBITDA ($M)	Q4 2024 Sales ($M)	Q4 2024 Adj. EBITDA ($M)
Fire Safety	$98.5	$55.6	$251.8	$157.5	$60.7	$27.244
Specialty Products	$28.7	$9.3	$36.6	$12.9	$25.5	$5.630
Total	$127.3	$64.9	$288.4	$170.4	$86.2	$32.874

Selected KPIs and balance sheet (FY/Q4 context)

Free Cash Flow FY2024: $172.9M
Cash & Equivalents (12/31/24): $198.456M
Net Debt/Adj. EBITDA: 1.7x (LTM)
Q4 CapEx: ~$6.5M
Inventory change FY2024: -$29.3M
Liquidity: $198.5M cash, $100M undrawn revolver

Notes: Margins are calculated from cited financial statements. S&P Global consensus was unavailable at time of retrieval.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capital Expenditures	Annual	$10–$15M per year	$15–$20M per year; Q4’24 CapEx ≈ $6.5M	Raised
Cash Taxes Framework	Multi-year	~26% tax rate (pre re-domicile context)	Cash taxes ≈ 20–25% of adjusted EBITDA after tax-deductible D&A and interest (framework, variability by period)	Updated framework
Interest Expense	Annual	~ $40M	~ $40M; Q4 interest ~$9.2M	Maintained
Tax-deductible D&A	2025	~$10M annually (prior LT assumption)	$20–$25M in 2025 (driven by CapEx and greater tax amortization)	Raised
Working Capital Assumption	LT	Invest ~10–20% of Δ revenue	Invest ~10% of annual revenue increase over time (seasonality applies)	Reframed
Capital Structure/Leverage	LT	N/A	Management comfortable with higher leverage (around IPO era/ ~3.5x) via M&A over time	Management commentary

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
Aerial firefighting capacity & preparedness	Airbase upgrades (Albuquerque, mixing systems) to lift throughput/productivity	Capacity constraints at peaks; MAFS activation; secular capacity additions	Rapid LA wildfire response; six bases opened; MRBs deployed; distributed manufacturing footprint; more VLAT/multi-pit capability investments	Strengthening capacity and responsiveness
Suppressants fluorine-free adoption	99% win rate at FAA 139 airports; pricing to value	Market leadership maintained	“Strong growth” in 2024; leadership reiterated	Positive adoption tailwind
Capital allocation & M&A	Redomicile planning; CapEx $10–$15M; disciplined M&A	Re-domicile targeted for Nov; >$200M cash; seek high-IRR M&A	IMS ~$32.8M acquired; leverage to increase via M&A over time; raised CapEx to $15–$20M	Escalating deployment optionality
Taxes / Re-domiciliation	Initiated move to Delaware to streamline and improve tax profile	Re-domiciliation expected to close in Nov	Improved cash tax framework; Q4 cash taxes timing noted	Structural improvement
Macro/tariffs/policy	—	—	Minimal impact expected from tariffs/policy; EV policy shift a rounding error for SP	Neutral
Leverage target	—	—	Comfortable increasing to ~3.5x through M&A, patient on timing	Upward bias via M&A

Management Commentary

Strategy and value drivers: “We plan to attain [our goal] by… profitable new business, continual productivity improvements, and pricing our products and services to the value they provide.” — CEO .
Normalization and earnings power: “Consolidated adjusted EBITDA approximately doubled… from $141M in 2021 to $280M in 2024.” — CEO .
Wildfire response capability: “Our job is to support our customers by loading 100% of air tankers with 100% reliability 100% of the time.” — CEO .
CapEx rationale: “We are moving our CapEx assumption up to $15–$20M annually… projects help fulfill our customers’ missions and come with extremely attractive IRRs.” — CFO ; reinforced in Q&A .
Cash tax framework: “We anticipate our cash expenditures on income taxes will approximate 20% to 25% of adjusted EBITDA after deducting tax-deductible D&A and interest expense.” — CFO .

Q&A Highlights

CapEx mix and returns: Incremental CapEx is predominantly in Fire Safety to expand capacity/service; pipeline filled with high-IRR projects .
LA wildfires impact: Near-term P&L impact modest; longer term likely drives increased national investment in aerial firefighting capacity, benefiting industry and PRM .
Tariffs/policy risk: Supply chain has redundancies; negligible expected impact from tariffs or new policies; SP demand not meaningfully affected by near-term EV policy shifts .
Leverage/M&A: Management comfortable with higher leverage (~3.5x) primarily through M&A when assets fit the value-driver playbook; patient on timing, broad aperture beyond PCBs .

Estimates Context

S&P Global consensus for Q4 2024 revenue and EPS was unavailable at time of retrieval; therefore, “vs estimates” comparisons cannot be presented. Any sell-side revisions may center on: (i) higher sustained Fire Safety profitability under normalized seasons, (ii) structurally lower cash taxes post re-domiciliation, and (iii) a higher CapEx run-rate deployed into high-IRR projects . S&P Global consensus unavailable at time of retrieval.

Key Takeaways for Investors

Underlying earnings power has reset higher: FY24 Adjusted EBITDA rose to $280.3M with broad-based contribution and strong cost/productivity execution .
Cash generation supports optionality: $172.9M FY24 FCF, 1.7x leverage, and ample liquidity enable disciplined M&A and elevated reinvestment .
Fire Safety tailwinds are structural: Normalized seasons, increased aerial capacity, and PRM’s service footprint support durable growth; suppressants’ fluorine-free conversion remains a multi-year driver .
GAAP vs non-GAAP: Large tax and founders advisory fee items created GAAP volatility; adjusted metrics better reflect operations (Q4 adj EPS $0.13 vs GAAP $0.90) .
CapEx raised for high-IRR growth/productivity: Annual guide lifted to $15–$20M with tangible initiatives (airbase upgrades, mixing systems) expected to compound returns .
Tax profile improving post re-domiciliation: Cash tax framework of ~20–25% of adjusted EBITDA (after deductions) implies higher multi-year FCF conversion .
Active M&A posture: Expect leverage to migrate higher via acquisitions consistent with PRM’s value-driver strategy; IMS marks the first step .

Sources: Q4 2024 8-K earnings press release and exhibits ; Q4 2024 earnings call transcript ; Q3 2024 8-K ; Q3 2024 call ; Q2 2024 8-K ; Q2 2024 call .

Perimeter Solutions, Inc. (PRM)·Q4 2024 Earnings Summary