Executive Summary

Q3 2025: Net sales grew 7% YoY to $969M, led by Refrigerants (+22%); however, mix shift in stationary refrigerants, transitory costs, and spin-related expenses compressed margins and produced a net loss attributable to Solstice of $35M .
Adjusted Standalone EBITDA (non‑GAAP) declined 5% to $235M with margin down 290 bps YoY to 24.3% as unfavorable product mix and expected one‑time costs outweighed pricing, volume, and FX benefits .
Full‑year 2025 outlook reaffirmed: net sales $3.75–$3.85B, ~25% Adjusted Standalone EBITDA margin, and capex $365–$415M; liquidity remains robust at ~$1.5B with net leverage ~1.5x post spin .
Segment trends: RAS strength (Refrigerants +22%) offset by Healthcare Packaging (-14%); ESM posted modest sales growth (+2%) but lower margins from transitory costs; Alternative Energy Services backlog rose $0.2B QoQ to $2.2B (12% increase) .

What Went Well and What Went Wrong

What Went Well

Broad-based top-line growth: Consolidated sales +7% YoY to $969M, with segment gains in RAS (+9%) and ESM (+2%) .
Refrigerants outperformance: Refrigerants sub-business +22% YoY on favorable pricing and volume (stationary and automotive) .
Backlog momentum in Alternative Energy Services: Backlog up $0.2B to $2.2B as of Sept 30, reflecting favorable domestic dynamics in nuclear fuel services .
CEO commentary: “We continue to see robust demand, especially in Refrigerants, Electronic Materials, and Safety & Defense Solutions…” and “were pleased to see the order backlog for Alternative Energy Services accelerate…” .

What Went Wrong

Margin compression: Adjusted Standalone EBITDA margin fell 290 bps YoY to 24.3% due to unfavorable stationary refrigerants mix and anticipated transitory costs .
Higher corporate costs: Corporate expenses increased to $54M vs $33M YoY as the company transitions to standalone operations, including personnel costs .
Tax headwinds: Income tax expense rose to $182M (+$133M YoY) driven by frictional taxes related to the Honeywell separation, contributing to net loss .
ESM margin pressure: ESM Adjusted EBITDA -15% YoY; margin down 319 bps due to anticipated transitory cost items despite Electronic Materials and Safety & Defense growth .

Financial Results

Consolidated Results (YoY comparison)

Metric	Q3 2024	Q3 2025
Net Sales ($M)	$907	$969
Net (Loss) Income attributable to Solstice ($M)	$152	$(35)
Adjusted Standalone EBITDA ($M)	$246	$235
Adjusted Standalone EBITDA Margin (%)	27.1%	24.3%

Note: Per-share EPS was not presented in combined statements of operations accompanying the earnings 8‑K; profitability is shown on an absolute basis .

Segment and Sub-Segment Performance

Segment / Sub-Segment	Q3 2024 ($M)	Q3 2025 ($M)	YoY
RAS Segment Net Sales	630	687	+9%
RAS Segment Adjusted EBITDA	250	243	(3)%
RAS Segment EBITDA Margin (%)	39.7%	35.4%	(431) bps
• Refrigerants	328	400	+22%
• Building Solutions & Intermediates	181	175	(3)%
• Alternative Energy Services	64	63	(2)%
• Healthcare Packaging	57	49	(14)%
ESM Segment Net Sales	277	282	+2%
ESM Segment Adjusted EBITDA	55	47	(15)%
ESM Segment EBITDA Margin (%)	19.9%	16.7%	(319) bps
• Research & Performance Chemicals	128	126	(2)%
• Electronic Materials	99	103	+4%
• Safety & Defense Solutions	50	53	+6%

Additional KPIs and Balance Sheet Highlights

KPI	Q3 2024	Q3 2025
Organic Sales Growth (%)	—	5%
FX impact (%)	—	2%
Cash Conversion (Adj Standalone EBITDA-capex ÷ Adj Standalone EBITDA)	71.5%	53.2%
Capex (YTD, $M)	201	248
LTM Adjusted Standalone EBITDA ($M)	1,003	1,003
Total Debt Post-Spin ($M)	—	2,000
Cash & Equivalents Post-Spin ($M)	—	~450
Net Leverage (x)	—	~1.5x
Liquidity ($B)	—	~1.5 (incl. $1.0B revolver availability)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($B)	FY 2025	$3.75 – $3.85 (Investor Day)	$3.75 – $3.85	Maintained
Adjusted Standalone EBITDA Margin (%)	FY 2025	~25% (Investor Day)	~25%	Maintained
Capital Expenditures ($M)	FY 2025	$365 – $415 (Investor Day)	$365 – $415	Maintained

Note: Company provides outlook primarily on a non‑GAAP basis and does not reconcile EBITDA guidance due to difficulty forecasting certain items .

Earnings Call Themes & Trends

A transcript for Q3 2025 was not available at time of analysis; the company held a call and webcast the morning of Nov 6, 2025 . The narrative below reflects disclosed materials:

Topic	Previous Mentions (Q-2, Q-1)	Current Period (Q3 2025)	Trend
Refrigerants transition/mix	Not disclosed as standalone quarters pre-spin	Mix in stationary refrigerants pressured margins despite strong demand and pricing	Transition headwind vs demand tailwind
Alternative Energy Services	Not disclosed pre-spin	Backlog +$0.2B to $2.2B; favorable domestic dynamics	Improving backlog
Standalone cost ramp	Not disclosed pre-spin	Corporate expenses rose to $54M on standalone build-out	Transitional cost headwind
Taxes (spin friction)	Not disclosed pre-spin	Tax expense +$133M YoY from separation frictional taxes	Temporary headwind
ESM cost items	Not disclosed pre-spin	“Anticipated transitory cost items” reduced margins	Temporary headwind

Management Commentary

Strategy and demand: “We continue to see robust demand, especially in Refrigerants, Electronic Materials, and Safety & Defense Solutions… [and] were pleased to see the order backlog for Alternative Energy Services accelerate…” — David Sewell, President & CEO .
Full-year outlook and execution: “Driven by strong demand and bolstered by our operational excellence, we are on track to deliver on our full-year commitments.” — David Sewell .
Margin puts/takes: Decline driven by stationary refrigerants product mix and anticipated transitory cost items, partially offset by volume, pricing, and favorable FX .

Q&A Highlights

A Q&A transcript was not available in the document set at the time of review; Solstice hosted a call and webcast on Nov 6, 2025 . We will update this section upon transcript availability.

Estimates Context

Wall Street (S&P Global) consensus for Q3 2025 revenue, EPS and EBITDA was unavailable for SOLS in our data pull; therefore, we cannot assess beat/miss this quarter. Values retrieved from S&P Global.*

Key Takeaways for Investors

Growth with mix/margin trade-off: Strong Refrigerants-led top-line growth (+7% YoY) but mix shift in stationary refrigerants and transitory costs compressed margins; watch for normalization of these items into 2026 .
Reaffirmed guide de-risks near term: Maintaining FY25 sales/margin/capex guide suggests confidence in demand durability and execution despite spin-related noise .
Nuclear conversion optionality: AES backlog increased to $2.2B (12% QoQ), offering multi-year visibility and potential counter-cyclical ballast .
Standalone cost/tax headwinds are temporary: Elevated corporate costs and frictional taxes should moderate as the standalone operating model stabilizes .
Balance sheet capacity: ~1.5x net leverage and ~$1.5B liquidity underpin capex program and strategic flexibility post-spin .
Segment mix watch items: Healthcare Packaging volumes (-14%) and ESM transitory costs warrant monitoring for stabilization and margin recovery .
Catalysts: Execution on stationary refrigerant transition (pricing/mix), AES backlog conversion, ESM cost normalization, and any updates to 2025–2026 margin trajectory .

Sources:

Solstice Advanced Materials Q3 2025 Form 8‑K and EX‑99.1 earnings release: consolidated results, segments, guidance, liquidity, non‑GAAP reconciliations .
Press release mirroring the 8‑K disclosures (Nov 6, 2025) .

S&P Global disclaimer: Consensus estimates were not available in our S&P Global data retrieval for SOLS Q3 2025; thus, beat/miss assessment could not be performed.

Solstice Advanced Materials Inc. (SOLS)·Q3 2025 Earnings Summary