Despite an 8% sales decline to $1.3 billion in 2025, Ingevity reported stronger underlying results with adjusted EBITDA of $398 million (up ~10%), diluted adjusted EPS of $4.55 (up 30%), free cash flow of $274 million, reduced leverage to 2.6x, and repurchased over 1 million shares.
The company is actively reshaping its portfolio—on Jan. 1, 2026 it sold the North Charleston CTO refinery and most of its Industrial Specialties line to Mainstream Pine and has launched sales processes for APT and Road Markings, saying these moves will cut volatility and improve cash generation.
For 2026 management guided to adjusted EPS $4.08–$5.20, sales $1.1–$1.2B, adjusted EBITDA $380–$400M, and free cash flow $225–$250M (excluding ~ $95M in expected BASF litigation payments), while maintaining a $300 million buyback plan through 2027.
Ingevity (NYSE:NGVT) executives told investors the company delivered higher profitability and cash flow in 2025 despite lower sales, while continuing to reshape its portfolio through divestitures and planned asset sale processes. Management also outlined 2026 guidance that excludes the recently divested Industrial Specialties product line and assumes no meaningful global economic recovery.
CEO Dave Li reminded listeners that the company shared results of its strategic portfolio review in early December and laid out plans to grow adjusted earnings per share by 10% and free cash flow per share by 5% through 2027. The company also announced it would initiate sales processes for its Advanced Polymer Technologies (APT) segment and Road Markings product line.
Li confirmed that on Jan. 1, 2026, Ingevity completed the sale of its North Charleston CTO refinery and the majority of the Industrial Specialties product line to Mainstream Pine Products. He said the transaction reduces portfolio volatility, strengthens the company’s profitability and cash flow profile, and enhances strategic flexibility.
Senior Vice President of Finance and incoming CFO Phil Platt said total company 2025 sales were $1.3 billion, down 8% year-over-year. Performance Materials sales were flat versus 2024 despite lower auto production, while Performance Chemicals sales fell by $86 million, primarily due to repositioning actions within Industrial Specialties. Platt said APT continued to face weak demand tied to indirect tariff impacts and competitive pressure.
On a GAAP basis, Ingevity reported a net loss of $167 million, which included $337 million of pre-tax special charges. Platt said those charges were primarily a non-cash goodwill impairment of $184 million in APT and a non-cash asset impairment of $109 million in Road Markings.
Excluding special charges, management highlighted improved profitability in 2025:
Adjusted gross profit of $556 million, up 6.8% year-over-year, with gross margin expanding 610 basis points.
Total adjusted EBITDA of $398 million, up 10% year-over-year, with margin expanding 500 basis points to 30.8%.
Li said the company grew total adjusted EBITDA by almost 10% compared to 2024 while delivering “industry-leading margins of over 30%.” He said 2025 free cash flow totaled $274 million, slightly exceeding commitments, and the company used cash to pay down debt, reduce leverage to 2.6x, and repurchase more than 1 million shares.
Platt added that free cash flow was the highest level generated in the past five years and exceeded the company’s updated guidance from November. He attributed the year-over-year improvement to the absence of roughly $180 million in cash outflows tied to Performance Chemicals repositioning, higher earnings, and a working capital benefit in Industrial Specialties. Ingevity spent $56 million to repurchase about 1 million shares in 2025 and ended the year with just under $300 million remaining under its authorization.
Performance Materials posted 2025 sales of $607 million, in line with the prior year, which Platt said was notable given that 2024 was a record year. He cited disruptions across the automotive industry, including tariff uncertainty, fires, and chip shortages. Volumes were slightly lower, but pricing helped keep sales essentially flat. Segment EBITDA declined 2% due to lower volume and higher SG&A, though EBITDA margin remained 53.8%. Li said Performance Materials continues to generate EBITDA margins above 50% and described a “long runway” supported by adoption of hybrids and fuel-efficient internal combustion engine vehicles.
For Performance Chemicals, results discussed on the call included both continuing and discontinued operations because the divested Industrial Specialties business was included in the segment’s historical figures. Management said Road Technologies has been split into Pavement Technologies and Road Markings, with Road Markings now presented separately due to the sales process underway. Platt said Pavement Technologies sales were flat year-over-year, with NAFTA volume growth offset by lower infrastructure spending in South America; pricing and mix were favorable. Road Markings volumes grew slightly but the business faced ongoing price pressure from competition.
Total segment EBITDA for Performance Chemicals increased by $45 million year-over-year, driven by repositioning actions that lowered raw material costs, improved logistics costs, and created a more efficient manufacturing footprint. Platt said these actions improved Industrial Specialties EBITDA by $40 million year-over-year. On a continuing basis (Pavement Technologies plus Road Markings), EBITDA rose by $7 million, or 12%, supported by pricing, mix, and lower raw materials, partially offset by volume declines and higher SG&A. Combined segment EBITDA margin expanded to 13.5% from 4% the prior year.
In Q&A, Platt said seasonality will become more pronounced now that Industrial Specialties is no longer part of the portfolio, estimating roughly 90% of annual EBITDA and 75% of sales for the Pavement/Road Markings businesses will occur in the second and third quarters.
APT sales declined 15% in 2025, and segment EBITDA fell 18% due to volume declines that more than offset improved operating efficiency. Platt said the business faced continued weak demand in automotive, footwear, and industrial end markets, and competitive dynamics in China pressured sales, particularly in paint protection film. Despite that, he said pricing and mix were stable, and operational discipline plus favorable foreign exchange supported an EBITDA margin of 20%.
Li said 2026 guidance includes a full year of APT and Road Markings but excludes the divested Industrial Specialties product line. He said sales processes for APT and Road Markings are underway and that the company is encouraged by interest in both, while emphasizing a focus on value. In response to an analyst question, Li said the company continues to expect to “announce something before the end of the year,” and management will update guidance as processes advance.
For 2026, the company guided to:
Adjusted EPS of $4.08 to $5.20
Sales of $1.1 billion to $1.2 billion
Adjusted EBITDA of $380 million to $400 million
Capex of $40 million to $60 million
Free cash flow of $225 million to $250 million
Li noted free cash flow guidance excludes approximately $95 million in pre-tax litigation-related payments to BASF expected in the second quarter. He said Ingevity plans to use free cash flow to continue share repurchases in line with its prior guidance of $300 million through 2027, and he added that the company repurchased almost $20 million of shares in the first quarter. Platt said the $300 million buyback plan does not assume any proceeds from potential APT or Road Markings sales and is expected to be executed on a “ratable cadence.”
Management also discussed expectations by segment. Performance Materials sales are expected to grow low single digits, supported by price increases in automotive, with margins consistent with 2025. Performance Chemicals, including Road Markings, is expected to grow mid-single digits with EBITDA margins in the mid-teens. APT is expected to deliver flat to low single-digit growth with margins around 20% as commercial and productivity actions offset market pressures.
In Q&A, Platt said the company expects to eliminate $15 million of stranded costs by year-end, with a cadence weighted more to the back half of 2026; he said some costs are tied to a transition services agreement the company expects to wrap up mid-year.
Li also addressed longer-term market drivers for Performance Materials, citing the potential impact of China 7 emissions regulations (which he said could be adopted toward the end of the decade) and the possibility of tightening emissions standards in India. He also said Ingevity is focusing on higher-value filtration applications—such as water, pharma, and food and beverage—while describing the filtration contribution in guidance as “a pretty small base” expected to expand over the next couple of years.
In closing remarks, Li described “new Ingevity” as simplified, more predictable, and highly cash generative, and said the company is committed to returning cash to investors. He also acknowledged outgoing CFO Mary Dean Hall, noting the call was her last earnings call with the company.
Ingevity Corporation, traded as NGVT, is a specialty chemicals and performance materials company headquartered in North Charleston, South Carolina. The company operates two primary business units: Performance Chemicals and Performance Materials. The Performance Chemicals segment produces and markets specialty chemicals derived largely from wood and other natural feedstocks, including rosin acids, tall oil fatty acids and esters, as well as specialty petroleum resins. These products serve a broad range of industries, including paper, adhesives, coatings, oilfield drilling and consumer goods.
The Performance Materials segment develops and manufactures activated carbon products and composites for applications such as automotive emissions control, industrial air and water purification, and spill containment.
