Open the filing on EDGARQnity Reports Third Quarter 2026 Results, Raises Full-Year Financial Guidance
- Third quarter Net Sales and Organic Sales of $1.6 billion, up 22% year-over-year
- Gross Margin and Adjusted Gross Margin of 47.8%
- GAAP Net Income of $196 million and Adjusted Operating EBITDA of $503 million
- GAAP EPS of $0.87, down 14% year-over-year
- Adjusted EPS of $1.46, up 55% year-over-year
WILMINGTON, Del., November 4, 2026 - Qnity Electronics, Inc. (“Qnity”) (NYSE: Q) today reported results for the third quarter ended September 30, 2026.
“We delivered our tenth consecutive quarter of profitable growth with strong performance across both segments as Qnity continues to establish itself as the premier solutions provider across the semiconductor value chain,” said Jon Kemp, Qnity’s Chief Executive Officer. “A year of disciplined execution as an independent company shows what sets Qnity apart: a deep portfolio, close alignment with our customers' roadmaps, and a local-for-local model that delivers at scale.”
Kemp added, “Materials innovation is quickly becoming a critical driver of chip performance as the industry shifts toward shrink and stack. Qnity’s end-to-end solutions across the stack enable customers to address the most complex system level challenges: signal reliability, power density, and thermal management. We see tremendous opportunities ahead, and we’re continuing to invest in differentiated technologies where we see visible customer demand to create significant value for our shareholders.”
Financial Results Summary
| In millions, except per share amounts | GAAP Results |
| Q3 2026 | Q3 2025 | |
| Net Sales | $1,556 | $1,276 |
| Semiconductor Technologies | 797 | 693 |
| Interconnect Solutions | 759 | 583 |
| Gross Profit | $743 | $575 |
| Net Income | $196 | $223 |
| Diluted Earnings Per Share | $0.87 | $1.01 |
| Non-GAAP Results |
| Adjusted Gross Profit | $743 | $575 |
| Adjusted Operating EBITDA | $503 | $370 |
| Adjusted Earnings, net of tax | $306 | $197 |
| Adjusted Earnings Per Share | $1.46 | $0.94 |
(1) Organic Sales, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating EBITDA, Adjusted Operating EBITDA Margin, Adjusted Earnings, and Adjusted EPS are non-GAAP measures. See “Non-GAAP Measures” for further discussion, including a definition of significant items. Reconciliations to the most directly comparable GAAP measure, including details of significant items, can be found in the “Non-GAAP Measures” section of this press release.
(2) Q3 2025 is presented on a pro forma basis. The pro forma non-GAAP measures give effect to pro forma adjustments related to interest expense associated with our current indebtedness, agreements executed in connection with the spin-off on November 1, 2025, from DuPont de Nemours, Inc. (“DuPont”) and other standalone costs as if the spin-off had occurred on January 1, 2025. See “Non-GAAP Measures” for further discussion, including a definition of significant items. Reconciliations to the most directly comparable GAAP measure, including details of significant items, can be found in the “Non-GAAP Measures” section of this press release. Refer to the “Non-GAAP Measures” section of this press release for further details on these adjustments.
Guidance for Full Year 2026
Qnity is raising full‑year guidance based on strong third‑quarter performance and continued momentum in the business.
Qnity’s full year 2026 guidance is as follows:
| Net Sales | $5.77B - $5.83B |
| Adjusted Operating EBITDA | $1.785B - $1.805B |
| Adjusted EPS | $4.95 - $5.05 |
| Adjusted Free Cash Flow | $800M - $900M |
We calculate forward-looking Adjusted Operating EBITDA, Adjusted EPS, and Adjusted Free Cash Flow based on internal forecasts that exclude certain information that would be included in the most directly comparable forward-looking GAAP measures. We are not providing a quantitative reconciliation of forward-looking Non-GAAP financial measures to the corresponding GAAP financial measure for these measures due to the unreasonable effort and uncertainty in estimating certain items necessary for such reconciliations, including adjustments that could be made for significant items, interest expense, indirect legacy costs/benefits, transformation, integration, and other charges, share-based compensation amounts, non-recurring, unusual or unanticipated charges, expenses or gains.
Conference Call and Webcast Information
Qnity will hold a conference call to review these results on Wednesday, November 4, 2026, at 8:00 a.m. ET. Investors can join the conference call via telephone by dialing (800) 343-5172 (domestic) or +1 (203) 518-9856 (international) and using the participant code QNITY. An audio-only live webcast, presentation materials, and replay will also be made available at Events | Qnity Electronics, Inc. (Q).
About Qnity
Qnity is a premier technology provider across the semiconductor value chain, empowering AI, high performance computing, and advanced connectivity. From groundbreaking solutions for semiconductor chip manufacturing, to enabling high-speed transmission within complex electronic systems, our high-performance materials and integration expertise make tomorrow’s technologies possible. More information about Qnity, a constituent of the S&P 500 index, its businesses, and solutions can be found at http://www.qnityelectronics.com.
Qnity™, the Qnity Node Logo, and all products, unless otherwise noted, denoted with TM or ® are trademarks, trade names or registered trademarks of affiliates of Qnity Electronics, Inc.
Cautionary Statement Regarding Forward-Looking Statements
Forward-looking statements notice
This release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements use words such as "plans", "expects", "will", "would", "anticipates", "believes", "intends", "seeks", "projects", "efforts", "estimates", "potential", "continue", "intend", “outlook”, "may", "could", "should" and similar expressions, among others, as well as other words or expressions referencing future events, conditions or circumstances. Statements that describe or relate to the market, industry and macroeconomic environment, Qnity's business plans or prospects, goals, intentions, strategies, future operating or financial performance, outlook, including without limitation statements under the heading “Guidance for Full Year 2026” and statements regarding Qnity’s strategic path, operating model, transformation plan and its expected costs and benefits and timing thereof, IT independence, share repurchases, and capital allocation plan to deliver above-market growth and strong profitability and statements that do not relate to historical or current fact, are examples of forward-looking statements. Forward-looking statements are based on our current beliefs, expectations and assumptions, which may not prove to be accurate, and involve a number of known and unknown risks and uncertainties, many of which are out of Qnity's control. Forward-looking statements are not guarantees of future performance, and there are a number of important factors that could cause actual outcomes and results to differ materially from the results contemplated by such forward-looking statements, including Qnity’s ability to realize the anticipated benefits of its multi-year transformation plan in the anticipated timeframe or at all and the risk that the costs of such plan may be higher than currently anticipated; the competitive environment in which Qnity operates; the risks from Qnity’s international operations, including geopolitical uncertainty and conflict, trade restrictions and sanctions laws; Qnity’s ability to comply with complex and increasing legal and regulatory requirements; the ability to realize the intended benefits of Qnity’s spin off from DuPont, including achievement of the anticipated synergies and operational efficiencies in connection with the spin off and completed and future, if any, divestitures, mergers, acquisitions, and other portfolio management, productivity and infrastructure actions; contractual allocation of certain liabilities in connection with the spin-off; and the possibility of disputes, litigation or unanticipated costs in connection with the spin-off. Additional information concerning risks and uncertainties can be found in Qnity's filings with the U.S. Securities and Exchange Commission (the “SEC”), including under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in our most recent Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026, and in Qnity’s future filings with the SEC. Any forward-looking statement speaks only as of the date on which it is made. Qnity does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
Non-GAAP Financial Measures
This press release includes information that does not conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are considered non-GAAP measures, including the presentation of Organic Sales, Adjusted Gross Profit, Adjusted Pro Forma Gross Profit, Adjusted Operating EBITDA, Adjusted Pro Forma Operating EBITDA, Adjusted Operating EBITDA Margin, Adjusted Pro Forma Operating EBITDA Margin, Adjusted Earnings, Adjusted Pro Forma Earnings, Adjusted EPS, Adjusted Pro Forma EPS, Base Tax Rate, Adjusted Free Cash Flow, Adjusted Pro Forma Free Cash Flow, Adjusted Pro Forma Base Tax Rate. The non-GAAP measures presented are not necessarily indicative of the future possible key performance indicators or non-GAAP measures of Qnity.
Qnity believes these non-GAAP financial measures are useful to investors because they provide additional information related to the performance of Qnity on an as-managed basis by DuPont and a stand-alone basis. These non-GAAP financial measures supplement disclosures prepared in accordance with U.S. GAAP and reflect results in a manner that enables, in some instances, more meaningful analysis of trends and facilitates comparison of results across periods. These non-GAAP financial measures should not be viewed as an alternative to U.S. GAAP. Furthermore, such non-GAAP measures may not be consistent with similar measures provided or used by other companies. Reconciliations for these non-GAAP measures to their most directly comparable U.S. GAAP financial measures are provided below. Non-GAAP measures included in this press release are defined below.
Adjusted Earnings is defined as net income available for Qnity common stockholders excluding the after-tax impacts of significant items, amortization expense of intangibles, non-operating pension / other post-employment benefits (“OPEB”) credits / costs, and indirect legacy costs / benefits and adjusted for the income tax effect of these excluded items. Adjusted Earnings is the numerator used in the calculation of Adjusted EPS.
Adjusted EPS is defined as Adjusted Earnings per common share - diluted.
Base Tax Rate is a non-GAAP measure defined as the GAAP Effective Tax Rate excluding the tax rate impacts of adjustments to net income available for Qnity common stockholders in determining Adjusted Earnings.
Adjusted Operating EBITDA is defined as Pre-tax Earnings (i.e., “Income before income taxes") before interest, depreciation, amortization, non-operating pension / OPEB benefits credits / costs, foreign exchange gains / losses, indirect legacy costs / benefits, and adjusted for significant items.
Adjusted Operating EBITDA Margin is defined as Adjusted Operating EBITDA divided by Net Sales.
Adjusted Free Cash Flow is defined as cash provided by/used for operating activities less capital expenditures and excluding the impact of indirect legacy costs / benefits related to cost sharing arrangements executed between DuPont and Qnity at the time of spin-off, IT independence costs, and transformation, integration, and other charges, as well as cash inflows/outflows that are unusual in nature and/or infrequent in occurrence that neither relate to the ordinary course of the Company's underlying business liquidity.
Significant items are items that impact Qnity and arise outside the ordinary course of business that management believes may cause misinterpretation of underlying business performance, both historical and future, based on a combination of some or all of the item’s size, unusual nature and infrequent occurrence. Within this definition, Management classifies as significant items certain costs and expenses associated with transformation, integration, and other charges related to transformational activities, including acquisitions and divestitures, as they are considered unrelated to ongoing business performance.
Indirect legacy costs/benefits relate to cost sharing arrangements executed between DuPont and Qnity at the time of the spin-off. Such costs include certain litigation and environmental-related shared costs, taxes, and indirect cost sharing arrangements, and are excluded from Adjusted Earnings, Adjusted Operating EBITDA, and Adjusted Free Cash Flow, as defined above, as they are considered unrelated to ongoing Qnity business performance.
Organic Sales is defined as net sales excluding the impacts of currency and portfolio actions.
Adjusted Gross Profit is calculated as Gross Profit (net sales less cost of sales), excluding the impact of Significant items on Net Sales and Cost of Sales and the impact on Cost of Sales from certain services associated with transaction agreements entered with DuPont, including the Transition Services Agreement, certain product service agreements, contract manufacturing agreements, raw materials supply agreements, and site services agreements. Adjusted Gross Margin is defined as Adjusted Gross Profit divided by Net Sales.
Qnity has also presented measures on a pro forma basis which were prepared in a manner consistent with Article 11 of Regulation S-X. Our pro forma results give effect to the spin-off and related transactions as if the Spin Off occurred on January 1, 2025. Our Pro Forma adjustments reflect:
- Interest expense associated with our current debt structure;
- Income tax effect of incremental interest expense;
- The impact of the Transition Services Agreements and other commercial agreements entered into with DuPont in connection with the spin-off; and
- Transaction and other incremental costs required to operate as a stand-alone entity.
We believe pro forma measures are helpful to supplement our financial results as they allow a comparison of results as a stand-alone company as if the agreements were in place for the periods presented.
Adjusted Pro Forma Earnings is defined as net income available for Qnity common stockholders excluding the impacts of significant items, amortization expense of intangibles, non-operating pension / other post-employment benefits credits / costs, and indirect legacy costs / benefits, less the after-tax impacts of the pro forma adjustments described above and adjusted for the income tax effect of these excluded items. Adjusted Pro Forma Earnings is the numerator used in the calculation of Adjusted Pro Forma EPS.
Adjusted Pro Forma EPS is defined as Adjusted Pro Forma Earnings per common share - diluted.
Adjusted Pro Forma Base Tax Rate is a non‑GAAP measure defined as the Base Tax Rate adjusted to reflect the estimated income tax effects of the pro forma adjustments described above.
Adjusted Pro Forma Operating EBITDA is defined as Adjusted Operating EBITDA less certain pro forma adjustments described above.
Adjusted Pro Forma Operating EBITDA Margin is defined as Adjusted Pro Forma Operating EBITDA divided by Net Sales.
Adjusted Pro Forma Free Cash Flow is defined as pro forma cash provided by/used for operating activities less capital expenditures and excluding the impact of indirect legacy costs / benefits related to cost sharing arrangements executed between DuPont and Qnity at the time of spin-off, IT independence costs, transformation, integration, and other charges, and transaction and other incremental costs required to operate as a stand-alone entity, as well as cash inflows/outflows that are unusual in nature and/or infrequent in occurrence that neither relate to the ordinary course of the Company's underlying business liquidity.
Adjusted Pro Forma Gross Profit is calculated as Gross Profit (net sales less cost of sales), excluding the impact on Cost of Sales from certain services associated with transaction agreements entered with DuPont, including the Transition Services Agreement, certain product service agreements, contract manufacturing agreements, raw materials supply agreements, and site services agreements.
Consolidated Statements of Operations (Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, |
|---|
| In millions, except per share amounts | | 2026 | | 2025 | | 2026 | | 2025 |
| Net sales | $1,556 | | $1,276 | | $4,300 | | $3,564 | |
| Cost of sales | 813 | | $701 | | 2,273 | | $1,918 | |
| Research and development expenses | 105 | | $92 | | 297 | | $264 | |
| Selling, general and administrative expenses | 200 | | $159 | | 573 | | $453 | |
| Amortization of intangibles | 50 | | $51 | | 152 | | $156 | |
| Transformation, integration and other charges | 53 | | $1 | | 123 | | $20 | |
| Equity in earnings of nonconsolidated affiliates | 15 | | $15 | | 39 | | $37 | |
| Interest expense | 64 | | $14 | | 186 | | $14 | |
| Other income (expense) - net | (39) | | $(1) | | (71) | | $(3) | |
| Income before income taxes | $247 | | $272 | | $664 | | $773 | |
| Provision for income taxes | 51 | | $49 | | 170 | | $153 | |
| Net income | $196 | | $223 | | $494 | | $620 | |
| Net income attributable to noncontrolling interests | 13 | | $12 | | 36 | | $28 | |
| Net income available for Qnity common stockholders | $183 | | $211 | | $458 | | $592 | |
| Per common share data: | | | | |
| Earnings per common share - basic | $0.87 | | $1.01 | | $2.19 | | $2.83 | |
| Earnings per common share - diluted | $0.87 | | $1.01 | | $2.18 | | $2.83 | |
| Weighted-average common shares outstanding - basic | 209.4 | | 209.4 | | 209.6 | | 209.4 | |
| Weighted-average common shares outstanding - diluted | 210.0 | | | 209.4 | 210.2 | | 209.4 | |
Consolidated Balance Sheets (Unaudited)
| In millions | September 30, 2026 | December 31, 2025 |
| Assets | | |
| Current Assets | | |
| Cash and cash equivalents | $1,124 | $915 |
| Accounts and notes receivable - net | 1,237 | 992 |
| Inventories - net | 775 | 661 |
| Prepaid and other current assets | 83 | 70 |
| Total current assets | $3,219 | $2,638 |
| Property, plant and equipment - net of accumulated depreciation (September 30, 2026 - 1,412; December 31, 2025 - 1,450) | 1,842 | 1,701 |
| Other Assets | | |
| Goodwill | 7,530 | 7,522 |
| Other intangible assets | 972 | 1,111 |
| Investments and noncurrent receivables | 443 | 402 |
| Deferred income tax assets | 45 | 42 |
| Deferred charges and other assets | 666 | 654 |
| Total other assets | $9,656 | $9,731 |
| Total Assets | $14,717 | $14,070 |
| Liabilities and Equity | | |
| Current Liabilities | | |
| Short-term borrowings | $23 | $24 |
| Accounts payable | 886 | 680 |
| Income taxes payable | 141 | 150 |
| Accrued and other current liabilities | 493 | 502 |
| Total current liabilities | $1,543 | $1,356 |
| Long-Term Debt | 3,996 | 4,003 |
| Other Noncurrent Liabilities | | |
| Deferred income tax liabilities | 185 | 273 |
| Pensions and other post-employment benefits - noncurrent | 81 | 80 |
| Other noncurrent obligations | 1,023 | 992 |
| Total other noncurrent liabilities | $1,289 | $1,345 |
| Total Liabilities | $6,828 | $6,704 |
| Commitments and contingent liabilities | | |
| Stockholders' Equity | | |
| Common stock (authorized 1,666,666,667 shares of $0.01 par value each; issued 2026: 209,164,927 shares; 2025: 209,479,173 shares) | 2 | 2 |
| Preferred stock (authorized 1 share of $1.50 million par value each; issued 2026: 1 share; 2025: 1 share) | 2 | 2 |
| Additional paid-in capital | 7,275 | 7,286 |
| Retained earnings | 442 | 18 |
| Accumulated other comprehensive loss | (130) | (213) |
| Total Qnity equity | $7,591 | $7,095 |
| Noncontrolling interests | 298 | 271 |
| Total equity | $7,889 | $7,366 |
| Total Liabilities and Equity | $14,717 | $14,070 |
Consolidated Statement of Cash Flows (Unaudited)
| Nine Months Ended September 30, |
|---|
| In millions | | 2026 | | 2025 |
| Operating Activities | | |
| Net income | $494 | | $620 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Depreciation of property, plant and equipment | 141 | | 124 | |
| Amortization of definite-lived intangible assets | 152 | | 156 | |
| Stock-based compensation | 37 | | 12 | |
| Credit for deferred income tax and other tax related items | (68) | | (61) | |
| Net gain on sales of assets | (5) | | (1) | |
| Restructuring and asset related charges - net | - | | 20 | |
| Net periodic pension benefit cost | 3 | | 6 | |
| Periodic benefit plan contributions | (5) | | (3) | |
| Earnings of nonconsolidated affiliates less dividends received | (39) | | (37) | |
| Other net loss | 29 | | - | |
| Changes in assets and liabilities: | | |
| Accounts and notes receivable | (230) | | (97) | |
| Inventories | (107) | | (33) | |
| Other assets | 14 | | 13 | |
| Accounts payable | 203 | | 81 | |
| Accrued and other current liabilities | 1 | | (6) | |
| Other noncurrent liabilities | 36 | | (1) | |
| Income tax liabilities | (9) | | (11) | |
| Cash provided by operating activities | $647 | | $782 | |
| Investing Activities | | |
| Capital expenditures | (290) | | (214) | |
| Proceeds and adjustments to proceeds from sales of property and businesses, net of cash divested | 6 | | - | |
| Other investing activities, net | 4 | | - | |
| Cash used for investing activities | $(280) | | $(214) | |
| Financing Activities | | |
| Repayments on long-term debt | (18) | | - | |
| Proceeds from term loan facility repricing | 360 | | - | |
| Repayments from term loan facility repricing | (360) | | - | |
| Repurchases of common stock | (75) | | - | |
| Employee taxes paid for share-based payment arrangements | (7) | | - | |
| Distributions to noncontrolling interests | (10) | | (21) | |
| Dividends paid to stockholders | (50) | | - | |
| Net transfers to Parent | - | | (2,311) | |
| Proceeds from issuance of long-term debt | - | | 1,750 | |
| Payments for debt issuance costs | (2) | | (34) | |
| Cash used for financing activities | $(162) | | $(616) | |
| Effect of exchange rate changes on cash and cash equivalents | 4 | | 10 | |
| Increase (decrease) in cash and cash equivalents | $209 | | $(38) | |
| Cash and cash equivalents at beginning of period | $915 | | $166 | |
| Cash and cash equivalents at end of period | $1,124 | | $128 | |
Segment and Geographic Information
| Net Sales by Segment and Geographic Region | Three Months Ended | Nine Months Ended |
| In millions (Unaudited) | September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 |
| Semiconductor Technologies | $797 | $693 | $2,262 | $1,981 |
| Interconnect Solutions | 759 | 583 | 2,038 | 1,583 |
| Total | $1,556 | $1,276 | $4,300 | $3,564 |
| Americas | $210 | $168 | $566 | $472 |
| EMEA | 105 | 106 | 312 | 293 |
| Asia Pacific | 1,241 | 1,002 | 3,422 | 2,799 |
| Total | $1,556 | $1,276 | $4,300 | $3,564 |
| Net Sales Variance by Segment and Geographic Region | Three Months Ended September 30, 2026 | |
| Local Price & Product Mix | Volume | Total Organic | Currency | | Total | |
| Percent change from prior year (Unaudited) | |
| Semiconductor Technologies | - % | 16% | 16% | (1)% | | 15% |
| Interconnect Solutions | - | 29 | 29 | 1 | | 30 |
| Total | - % | 22% | 22% | - % | | 22% |
| Americas | 1% | 23% | 24% | - % | | 24% |
| EMEA | - | - | - | - | | - |
| Asia Pacific | - | 24 | 24 | - | | 24 |
| Total | - % | 22% | 22% | - % | | 22% |
| Net Sales Variance by Segment and Geographic Region | Nine Months Ended September 30, 2026 | |
| Local Price & Product Mix | Volume | Total Organic | Currency | | Total | |
| Percent change from prior year (Unaudited) | |
| Semiconductor Technologies | (1)% | 16% | 15% | (1)% | | 14% |
| Interconnect Solutions | - | 27 | 27 | 2 | | 29 |
| Total | - % | 21% | 21% | - % | | 21% |
| Americas | - % | 20% | 20% | - % | | 20% |
| EMEA | (1) | 5 | 4 | 2 | | 6 |
| Asia Pacific | - | 22 | 22 | - | | 22 |
| Total | - % | 21% | 21% | - % | | 21% |
1.Includes United States, Canada, and Latin America
2.Europe, Middle East and Africa.
Selected Financial Information and Non-GAAP Measures
| Reconciliation of Net Income to Adjusted Operating EBITDA and Adjusted Pro Forma Operating EBITDA and reconciliation of Net Income Margin to Adjusted Operating EBITDA Margin and Adjusted Pro Forma Operating EBITDA Margin | Three Months Ended | Nine Months Ended |
| In millions (Unaudited) | Sep 30, 2026 | Sep 30, 2025 | Sep 30, 2026 | Sep 30, 2025 |
| Net Income (GAAP) | $196 | $223 | $494 | $620 |
| + Provision for income taxes | 51 | 49 | 170 | 153 |
| Income before income taxes (GAAP) | $247 | $272 | $664 | $773 |
| + Depreciation and amortization | 98 | 94 | 293 | 280 |
| '- Interest income | 4 | - | 11 | - |
| '+ Interest expense | 64 | 14 | 186 | 14 |
| '- Non-operating pension credits | 1 | (2) | 3 | (2) |
| - Foreign exchange (losses) gains - net | (5) | 1 | (12) | (4) |
| - Indirect legacy (costs) benefits - net | (39) | - | (84) | - |
| - Significant items charge | (55) | (1) | (120) | (18) |
| Adjusted Operating EBITDA (non-GAAP) | $503 | $382 | $1,345 | $1,091 |
| Pro forma adjustments 2, 3 | - | (12) | - | (38) |
| Adjusted Pro Forma Operating EBITDA (non-GAAP) | $503 | $370 | $1,345 | $1,053 |
| Net Income Margin (GAAP) | 12.6% | 17.5% | 11.5% | 17.4% |
| Adjusted Operating EBITDA Margin (non-GAAP) | 32.3% | 29.9% | 31.3% | 30.6% |
| Adjusted Pro Forma Operating EBITDA Margin (non-GAAP) | 32.3% | 29.0% | 31.3% | 29.5% |
1.The nine months ended September 30, 2025 excludes accrued interest income earned on employee retention credits. Refer to details of significant items below.
2.Reflects the incremental costs required to operate as a stand-alone entity in the amount of $12 million and $45 million for the three and nine months ended September 30, 2025, respectively.
3.Reflects the net benefit of the Transition Services Agreements and other commercial agreements entered into with DuPont in connection with the Spin-Off in the amount of zero and $7 million for the three and nine months ended September 30, 2025, respectively.
| Adjusted Operating EBITDA by Segment and Adjusted Pro Forma Operating EBITDA | Three Months Ended | Nine Months Ended |
| In millions (Unaudited) | Sep 30, 2026 | Sep 30, 2025 | Sep 30, 2026 | Sep 30, 2025 |
| Semiconductor Technologies | $285 | $240 | $801 | $713 |
| Interconnect Solutions | 236 | 152 | 602 | 403 |
| Corporate | (18) | (10) | (58) | (25) |
| Adjusted Operating EBITDA (non-GAAP) | $503 | $382 | $1,345 | $1,091 |
| Pro forma adjustments | - | (12) | - | (38) |
| Adjusted Pro Forma Operating EBITDA (non-GAAP) | $503 | $370 | $1,345 | $1,053 |
1.Reflects the incremental costs required to operate as a stand-alone entity in the amount of $12 million and $45 million for the three and nine months ended September 30, 2025, respectively.
2.Reflects the net benefit of the Transition Services Agreements and other commercial agreements entered into with DuPont in connection with the Spin-Off in the amount of zero and $7 million for the three and nine months ended September 30, 2025, respectively.
| Equity in Earnings of Nonconsolidated Affiliates by Segment | Three Months Ended | Nine Months Ended |
| In millions (Unaudited) | Sep 30, 2026 | Sep 30, 2025 | Sep 30, 2026 | Sep 30, 2025 |
| Semiconductor Technologies | $14 | $14 | $39 | $38 |
| Interconnect Solutions | 1 | 1 | - | (1) |
| Total Equity in Earnings included in Net Income (GAAP) | $15 | $15 | $39 | $37 |
Selected Financial Information and Non-GAAP Measures
| Reconciliation of Cash provided by operating activities to Adjusted Free Cash Flow , Adjusted Pro Forma Free Cash Flow | Three Months Ended | Nine Months Ended |
| In millions (Unaudited) | Sep 30, 2026 | Sep 30, 2025 | Sep 30, 2026 | Sep 30, 2025 |
| Cash provided by operating activities (GAAP) | $271 | $302 | $647 | $782 |
| Less: Capital expenditures | 78 | 61 | 290 | 214 |
| Less: Transformation, integration, and other charges | (36) | - | (84) | - |
| Less: Indirect legacy (costs) benefits - net | (91) | - | (114) | - |
| Less: DuPont separation foreign tax cost | - | - | (52) | - |
| Adjusted Free Cash Flow (non-GAAP) | $320 | $241 | $607 | $568 |
| Pro forma adjustments 4, 5, 6, 7 | - | (34) | - | (184) |
| Adjusted Pro Forma Free Cash Flow (non-GAAP) | $320 | $207 | $607 | $384 |
1.Refer to the definitions of Non-GAAP metrics for additional information.
2.Refer to the Consolidated Statement of Cash Flows included in the schedules above for major GAAP cash flow categories as well as further detail relating to the changes in "Cash provided by operating activities" for the three and nine month periods noted.
3.Reflects taxes paid on certain legal entity restructuring actions in preparation for the Separation of Qnity from DuPont.
4.Reflects the after-tax incremental interest expense related to our current debt structure in the amount of $50 million and $174 million for the three and nine months ended September 30, 2025, respectively.
5.Reflects the after-tax incremental costs required to operate as a stand-alone entity in the amount of $8 million and $34 million for the three and nine months ended September 30, 2025, respectively.
6.Reflects the net after-tax benefit of the Transition Services Agreements and other commercial agreements entered into with DuPont in connection with the Spin-Off in the amount of zero and $5 million for the three and nine months ended September 30, 2025, respectively.
7.Reflects an adjustment to reflect principal payments and interest expense payable, as well as adjustments to employee related liabilities as if these amounts were presented on a stand-alone basis in the amount of $24 million and $19 million for the three and nine months ended September 30, 2025, respectively.
| Reconciliation of Effective Tax Rate (GAAP) to Base Tax Rate (non-GAAP) and Adjusted Pro Forma Base Tax Rate (non-GAAP) | Three Months Ended | Nine Months Ended |
| Sep 30, 2026 | Sep 30, 2025 | Sep 30, 2026 | Sep 30, 2025 | |
| Effective Tax Rate (GAAP) | 20.6% | 18.0% | 25.6% | 19.8% |
| Less: Significant items (charge) benefit | 0.1% | 0.1% | (2.3)% | 0.1% |
| Less: Indirect legacy (costs) benefits - net | (2.1)% | - % | (3.6)% | - % |
| Less: Amortization of intangibles | 0.2% | 0.3% | 0.1% | - % |
| Base Tax Rate (non-GAAP) | 18.8% | 18.4% | 19.8% | 19.9% |
| Pro forma adjustments | - % | 3.2% | - % | 4.2% |
| Adjusted Pro Forma Base Tax Rate (non-GAAP) | 18.8% | 21.6% | 19.8% | 24.1% |
1.Base Tax Rate is a non-GAAP measure defined as the GAAP Effective Tax Rate excluding the tax rate impacts of adjustments to net income available for Qnity common stockholders in determining Adjusted Earnings. Refer to the definitions of Non-GAAP metrics for additional information.
2.Reflects the tax rate impact of incremental interest expense related to our current debt structure in the amounts of 3.2% and 4.2% for the three and nine months ended September 30, 2025, respectively.
| Reconciliation of Gross Profit to Adjusted Pro Forma Gross Profit and Gross Margin to Adjusted Pro Forma Gross Margin | Three Months Ended | Nine Months Ended |
| In millions (Unaudited) | Sep 30, 2026 | Sep 30, 2025 | Sep 30, 2026 | Sep 30, 2025 |
| Gross Profit (GAAP) | $743 | $575 | $2,027 | $1,646 |
| Gross Margin (GAAP) | 47.8% | 45.1% | 47.1% | 46.2% |
| Pro forma adjustments | - | - | - | (3) |
| Adjusted Pro Forma Gross Profit (non-GAAP) | $743 | $575 | $2,027 | $1,649 |
| Adjusted Pro Forma Gross Margin (non-GAAP) | 47.8% | 45.1% | 47.1% | 46.3% |
1.Reflects the net benefit of the Transition Services Agreements and other commercial agreements entered into with DuPont in connection with the spin-off on Cost of Sales in the amounts of zero and $3 million for the three and nine months ended September 30, 2025.
2.Adjusted gross profit is calculated as Gross Profit (net sales less cost of sales), excluding the impact of Significant items on Net Sales and Cost of Sales and the impact on Cost of Sales from certain services associated with transaction agreements entered with DuPont, including the Transition Services Agreement, certain product service agreements, contract manufacturing agreements, raw materials supply agreements, and site services agreements. Adjusted gross margin is defined as adjusted gross profit divided by net sales.
Selected Financial Information and Non-GAAP Measures
| Sep 30, | Sep 30, | |
|---|
| Reconciliation of Net Income to Adjusted Earnings and Adjusted Pro Forma Earnings | Three Months Ended | |
| In millions, except per share amounts (Unaudited) | | 2026 | | 2025 | Income Statement Classification |
| Net Income available for Qnity common stockholders (GAAP) | $183 | | $211 | | |
| Earnings Per Share (GAAP) | $0.87 | | $1.01 | | |
| Less: Significant Items and Other Non-GAAP Adjustments | | | |
| Transformation, integration & other charges | (53) | | (1) | | Transformation, integration & other charges |
| Amortization of intangibles | (50) | | (51) | | Amortization of intangibles |
| Non-operating pension credits | 1 | | (2) | | Other income (expense) - net |
| Gain on sale of assets | - | | - | | Other income (expense) - net |
| Indirect legacy (costs) benefits - net | (39) | | - | | Other income (expense) - net |
| Debt Repricing - Loss on Extinguishment | (3) | | - | | Interest Expense |
| Debt Repricing - Fees | (2) | | - | | Other income (expense) - net |
| Tax effect of Non-GAAP Adjustments | 23 | | 10 | | Provision for income taxes |
| Adjusted Earnings (non-GAAP) | $306 | | $255 | | |
| Pro forma adjustments | - | | (58) | | |
| Adjusted Pro Forma Earnings | $306 | | $197 | | |
| Adjusted Pro Forma Earnings Per Share | $1.46 | | $0.94 | | |
1. Net income available for Qnity common stockholders.
2. Earnings per common share - diluted.
3. All Non-GAAP Adjustments are shown on a pre-tax basis with the exception of "Tax effect of Non-GAAP Adjustments"
4. Q3 2026 Transformation, integration and other charges primarily consisted of costs incurred to support the Company’s information technology independence initiatives of approximately $35 million, costs related to transformation initiatives of approximately $11 million, other integration-related costs of approximately $4 million, and severance and other asset-related charges of approximately $3 million. Q3 2025 relates to pre-separation severance charges.
5. The income tax effect on significant items was calculated based upon the enacted tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.
6. Reflects the after tax incremental interest expense related to our current debt structure in the amount of $50 million for the three months ended September 30, 2025.
7. Reflects the after tax incremental costs required to operate as a stand-alone entity in the amount of $8 million for the three months ended September 30, 2025.
8. Adjusted Pro Forma Earnings Per Share is calculated based on Adjusted Pro Forma Earnings divided by common shares - diluted of 210.0 million shares and 209.4 million shares as of September 30, 2026 and September 30, 2025 respectively.
Selected Financial Information and Non-GAAP Measures
| Sep 30, | Sep 30, | |
|---|
| Reconciliation of Net Income to Adjusted Earnings and Adjusted Pro Forma Earnings | Nine Months Ended | |
| In millions, except per share amounts (Unaudited) | | 2026 | | 2025 | Income Statement Classification |
| Net Income available for Qnity common stockholders (GAAP) | $458 | | $592 | | |
| Earnings Per Share (GAAP) | $2.18 | | $2.83 | | |
| Less: Significant Items and Other Non-GAAP Adjustments | | | |
| Transformation, integration & other charges | (123) | | (20) | | Transformation, integration & other charges |
| Employee retention credit | - | | 2 | | Other income (expense) - net |
| Amortization of intangibles | (152) | | (156) | | Amortization of intangibles |
| Non-operating pension credits | 3 | | (2) | | Other income (expense) - net |
| Gain on sale of assets | 5 | | - | | Other income (expense) - net |
| Indirect legacy (costs) benefits - net | (84) | | - | | Other income (expense) - net |
| Debt Repricing - Loss on Extinguishment | (3) | | - | | Interest Expense |
| Debt Repricing - Fees | (2) | | - | | Other income (expense) - net |
| Tax effect of Non-GAAP Adjustments | 32 | | 35 | | Provision for income taxes |
| Adjusted Earnings (non-GAAP) | $782 | | $733 | | |
| Pro forma adjustments 8,9,10 | - | | (203) | | |
| Adjusted Pro Forma Earnings | $782 | | $530 | | |
| Adjusted Pro Forma Earnings Per Share | $3.72 | | $2.53 | | |
1. Net income available for Qnity common stockholders.
2. Earnings per common share - diluted.
3. All Non-GAAP Adjustments are shown on a pre-tax basis with the exception of "Income Tax Items" and "Tax effect of Non-GAAP Adjustments"
4. Transformation, integration and other charges for the nine months ended September 30, 2026 primarily consisted of costs incurred to support the Company’s information technology independence initiatives of approximately $83 million, costs related to transformation initiatives of approximately $21 million, other integration‑related costs of approximately $10 million, and severance and other asset-related charges of approximately $9 million. Q3 2025 relates to pre-separation severance charges.
5. Reflects accrued interest earned on employee retention credits and is recorded in “Interest income” within the “Other income (expense) - net” line item in the Company’s Consolidated Statements of Operations.
6. The gain on sale of assets was attributable to the sale of land during the nine months ended September 30, 2026.
7. The income tax effect on significant items was calculated based upon the enacted tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.
8. Reflects the after tax incremental interest expense related to our current debt structure in the amount of $174 million for the nine months ended September 30, 2025.
9. Reflects the after tax incremental costs required to operate as a stand-alone entity in the amount of $34 million for the nine months ended September 30, 2025.
10. Reflects the after tax net benefit of the Transition Services Agreements and other commercial agreements entered into with DuPont in connection with the Spin-Off in the amount of $5 million for the nine months ended September 30, 2025.
11. Adjusted Pro Forma Earnings Per Share is calculated based on Adjusted Pro Forma Earnings divided by common shares - diluted of 210.2 million shares, and 209.4 million shares for the nine month periods ended September 30, 2026, and September 30, 2025, respectively.
Contacts
Meg Miller meg.miller@qnityelectronics.com
Ashley Boucher ashley.boucher@qnityelectronics.com