Executive Summary

Q2 2025 was weak and missed Street expectations: revenue $731M vs S&P Global consensus $784M (MISS), and adjusted diluted EPS -$0.28 vs -$0.12 (MISS). Management cited softer-than-expected coatings season, 2% sequential/11% YoY lower TiO2 volumes, heightened competition (notably in EMEA), and higher production/freight costs . Consensus values marked with * from S&P Global.
Guidance cut materially: FY25 revenue lowered to $3.0–$3.1B (from $3.0–$3.4B), Adjusted EBITDA to $410–$460M (from $525–$625M), FCF now a use of $100–$170M (from >$50M), and capex reduced further to < $330M .
Balance sheet focus: dividend reduced 60% to $0.05 for Q3 to preserve liquidity; liquidity $397M; net debt $2.9B; net leverage 6.1x TTM; inventory financing facility added $50M liquidity .
Setup into 2H: management expects slight sequential improvement in H2 driven by targeted India share gains post duties, “other products” strategic sales in Q4, and cost reduction benefits; however, pricing headwinds (EMEA) and slower demand limit near-term upside .

What Went Well and What Went Wrong

What Went Well
- India momentum post anti-dumping duties and Australia-India FTA positioning; expected targeted share gains in H2 .
- Cost program running ahead of plan; confidence in $125–$175M run-rate savings by end-2026; expect ~$10M to hit late Q3/Q4 .
- Further capex cuts (<$330M) and dividend reduction to bolster flexibility; next significant debt maturity 2029; no term loan/bond covenants .
- Quote: “We are executing on our disciplined strategy…[and] remain confident in our ability to deliver $125–$175 million in sustainable, run-rate savings by the end of 2026.” — CEO John D. Romano .
What Went Wrong
- Demand softness and competitive pressure: TiO2 volumes -11% YoY/-2% QoQ; EMEA saw price competition and volume decline; coatings season muted in North America .
- EBITDA compressed: Adjusted EBITDA $93M (-42% YoY, -17% QoQ) on higher production and freight costs; non-repeating Q1 insurance proceeds created a tougher sequential comp .
- Zircon under pressure: -20% YoY revenue on lower volumes/prices; China demand remains weak .

Financial Results

Overall comparison (oldest → newest)

Metric	Q2 2024	Q4 2024	Q1 2025	Q2 2025
Revenue ($M)	$820	$676	$738	$731
GAAP Diluted EPS	$0.10	-$0.19	-$0.70	-$0.53
Adjusted Diluted EPS	$0.07	$0.03	-$0.15	-$0.28
Adjusted EBITDA ($M)	$161	$129	$112	$93
Adjusted EBITDA Margin (%)	19.6%	19.1%	15.2%	12.7%
Free Cash Flow ($M)	$84	-$35	-$142	-$55

Actual vs S&P Global consensus (Q2 2025)

Metric	Consensus*	Actual	Surprise
Revenue ($M)	784.4*	731	MISS
Adjusted Diluted EPS	-0.12*	-0.28	MISS

Values with * retrieved from S&P Global.

Product mix (segment/category revenue)

Category ($M)	Q2 2024	Q4 2024	Q1 2025	Q2 2025
TiO2	$653	$533	$584	$587
Zircon	$85	$75	$69	$68
Other products	$82	$68	$85	$76

KPI drivers

KPI	YoY Δ	QoQ Δ	Notes
TiO2 volume/price/FX	Vol: -11%; Price/Mix: 0%; FX: +1%	Vol: -2%; Price/Mix: +1%; FX: +2%	EMEA competition; muted coatings season; India strength
Zircon volume/price	Vol: -10%; Price/Mix: -10%	Vol: +1%; Price/Mix: -2%	China weakness pressure
Liquidity	—	—	Liquidity $397M; Cash $132M; RCF availability $265M
Leverage	—	—	Net leverage 6.1x TTM; Net debt $2.9B; Total debt $3.1B

Guidance Changes

Metric	Period	Previous Guidance (Q1 2025)	Current Guidance (Q2 2025)	Change
Revenue	FY 2025	$3.0–$3.4B	$3.0–$3.1B	Lowered
Adjusted EBITDA	FY 2025	$525–$625M	$410–$460M	Lowered
Free Cash Flow	FY 2025	>$50M	Use of $100–$170M	Lowered
Capital Expenditures	FY 2025	< $365M	< $330M	Lowered
Dividend per share	Q3 2025	$0.125 declared in Q1 (paid in Q2)	$0.05 declared for Q3	Lowered (60%)
Net cash interest	FY 2025	—	≈$150M	New detail
Net cash taxes	FY 2025	—	< $10M	New detail
Working capital	FY 2025	“Source in all scenarios” (Q1 commentary)	Use of $70–$90M	Lowered

Rationale: weaker pigment/zircon volumes and pricing vs prior assumptions; partial offsets from “other products” strategic sales in H2 and cost improvements .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
Demand/Coatings season	Q4: mixed; APAC/LatAm better; Europe lagging	North America coatings season muted; volumes -2% QoQ/-11% YoY	Negative
Pricing/Competition	Q1: initiated EU price increases; some traction	EMEA saw competitive price cuts; guide assumes 2–3% price decline in Q3	Negative
India/Brazil duties	Q1: anticipated India and Brazil duties to drive H2	India momentum post-May duties; Brazil delayed final duties until late Q3	Mixed to Positive (India), timing risk (Brazil)
Cost program	Q4: launched $125–$175M run-rate savings	Running ahead of plan; ~$10M P&L in late Q3/Q4; more in 2026	Positive
Capex/Capital allocation	Q1: cut to < $365M; target positive FCF	Capex further cut < $330M; dividend cut 60% to $0.05	Defensive
Mining projects	Q1: Fairbreeze July; East OFS Nov; 2025 headwind $50–$60M	On track; lower-cost feedstock expected to benefit late Q4 and 2026	Positive (timing)
Other products (incl. rare earths)	Q4: opportunistic sales didn’t repeat	Expect profitable “other products” sales in Q4; rare earth-related element included	Positive in Q4
Liquidity/Leverage	Q1: net leverage 5.2x; liquidity $443M	Net leverage 6.1x; liquidity $397M; $50M inventory facility	Slightly Negative

Management Commentary

Strategy: “We are…selectively adjusting operating rates to preserve cash and deploying targeted commercial initiatives to ensure we maintain and grow our market share in key markets.” — CEO John D. Romano .
On guidance drivers: “We’re not projecting…any significant bump in volume…some erosion in price…we have pulled back some on production…balancing production…with sales.” .
On capital allocation: “We further reduced capital expenditures…Our Board…declared a dividend of $0.05 per share…a reduction of 60% to provide enhanced balance sheet flexibility.” .
On costs: “We are well ahead of our sustainable cost improvement program, and we expect to exit the year with nearly double the cost savings than previously targeted.” .

Q&A Highlights

Guidance bridge: H2 uplift relies on “other products” sales (very profitable, historically executed in Q4), slight cost benefits, and targeted volume gains (India); Q3 roughly flat vs Q2, bigger step in Q4 from other products .
Pricing dynamics: EMEA competitiveness offset earlier price increases; management embeds 2–3% price downside in Q3; North America price stable; India favorable due to duties/FTA .
Capex and projects: Capex reduced to $330M; strategic mining spend (~$135M) preserved; high-return discretionary projects deferred; normalized capex targeted $250–$300M post projects (from Q1 call) .
Working capital and production: Matching production to sales; evaluating mining/smelters for potential throttling; expect working capital and FCF to be sources in H2 as inventories are reduced .
Liquidity tools: New $50M inventory financing facility; recorded in other liabilities (not debt); short-term, renewable .

Estimates Context

Q2 2025 results missed consensus: revenue $731M vs $784.4M* and adjusted diluted EPS -$0.28 vs -$0.12* (7 estimates) . Values with * retrieved from S&P Global.
Implications: Street models likely to revise FY25 lower given EBITDA/FCF guidance cuts, lingering demand/pricing headwinds, and higher leverage (6.1x). However, H2 “other products” contribution and cost actions introduce potential Q4 upside swing vs Q3 run-rate .

Key Takeaways for Investors

Near-term caution: The cut to FY25 revenue/EBITDA/FCF and the Q2 miss reflect softer demand, EMEA price pressure, and cost headwinds; expect Q3 roughly in line with Q2, with Q4 aided by “other products” sales .
Liquidity-first posture: 60% dividend reduction and deeper capex cuts signal focus on flexibility with leverage at 6.1x; next maturity 2029, no financial covenants .
Structural cost work is the medium-term lever: Savings running ahead of plan; incremental ~$10M expected in late Q3/Q4, more in 2026 as mining projects reduce feedstock costs .
India is the key growth vector: Anti-dumping duties plus Australia-India FTA underpin targeted share gains; Brazil duty timing is a watch item into late Q3 .
Watch “other products” in Q4: Management highlighted profitable strategic sales (including a rare earths element) as the swing factor to reach the high end of H2 EBITDA .
Pricing risk persists in EMEA: Competitive activity tempered earlier increases; management embeds 2–3% price downside in Q3 assumptions .
Execution bar: To the low end of FY EBITDA guide, H2 needs modest improvement vs Q2 run-rate and delivery of “other products” plus cost benefits; miss on pricing/volumes would pressure the outlook further .

Appendix: Additional Data

Volume/price drivers detail (Q2 2025 vs YoY and QoQ)

Product	YoY Volume	YoY Price/Mix	YoY FX	QoQ Volume	QoQ Price/Mix	QoQ FX
TiO2	-11%	0%	+1%	-2%	+1%	+2%
Zircon	-10%	-10%	—	+1%	-2%	—

Balance sheet and cash flow snapshot (Q2 2025)

Total debt: $3.1B; Net debt: $2.9B; Net leverage: 6.1x TTM Adjusted EBITDA; Liquidity: $397M; Cash: $132M; RCF availability: $265M .
Free cash flow: -$55M in Q2; Capex: $83M in Q2; TTM Adjusted EBITDA: $477M .

Notes:

All company-reported figures and management commentary are cited to SEC filings/press releases and the earnings call transcript as indicated.
Consensus values marked with * retrieved from S&P Global.

Tronox Holdings plc (TROX)·Q2 2025 Earnings Summary