Qnity reported 2025 net sales of $4.75 billion (up 10% year-over-year) and fourth-quarter sales of $1.2 billion (+8%), with adjusted pro forma operating EBITDA of $1.4 billion (a 29.5% margin) and adjusted pro forma EPS of $3.35 for the year.
Both operating segments grew: Semi generated $2.65 billion in sales (+8% organic) with an EBITDA margin just above 35%, while Interconnect Solutions produced $2.1 billion (+12% organic) with margin expansion to just over 25%, driven by >20% growth in advanced packaging, interconnects, and thermal management.
For 2026 management guides net sales of $4.97–$5.17 billion, adjusted EBITDA of $1.465–$1.575 billion, adjusted EPS of $3.55–$3.95, and adjusted free cash flow of $450–$550 million; the company finished 2025 with >$900 million cash, ~2.2x net leverage, a $500 million buyback authorization, a declared dividend, and a multi-year transformation plan targeting ~$100 million EBITDA run‑rate benefit by 2028 at ~$140 million of implementation cost.
Qnity Electronics (NYSE:Q) executives pointed to continued momentum tied to artificial intelligence and advanced semiconductor manufacturing as the company reported fourth-quarter and full-year 2025 results and issued 2026 guidance on its first earnings call as a standalone public company.
Chief Executive Officer Jon Kemp said Qnity delivered its “seventh consecutive quarter of strong organic growth” in 2025 and exceeded its full-year financial objectives, driven by demand across advanced nodes, advanced packaging, advanced interconnects, and thermal management.
Interim Chief Financial Officer Mike Goss reported fourth-quarter net sales of $1.2 billion, up 8% year-over-year. Goss noted the quarter included a $40 million sales shift from the fourth quarter into the third quarter due to spin-related transition timing previously discussed. Fourth-quarter Adjusted Pro Forma Operating EBITDA was $349 million and adjusted pro forma EPS was $0.82.
For the full year, Qnity reported net sales of $4.75 billion, up 10%, and Adjusted Pro Forma Operating EBITDA of $1.4 billion, implying an EBITDA margin of 29.5%. Adjusted pro forma EPS was $3.35, up 12% year over year, which management said included adjustments for amortization and other non-recurring items.
Management highlighted growth in both operating segments during 2025.
Semiconductor Technologies (“Semi”): Net sales of $2.65 billion with 8% organic growth. Goss said results were led by double-digit growth from semi-fab consumables, including CMP pads, cleans and slurries, and lithography, supported by stronger fab utilization and increased content. Adjusted pro forma operating EBITDA margin was just above 35%, with product mix and strategic growth investments partially offsetting the benefit of growth.
Interconnect Solutions (“ICS”): Net sales of $2.1 billion with 12% organic growth. Goss said advanced packaging, advanced interconnects and thermal management each increased more than 20% for the year as the company scaled wins at leading fabs and OEMs. Segment adjusted pro forma operating EBITDA margin was just over 25%, with margin expansion of over 175 basis points year-over-year attributed to operating leverage and favorable mix.
On margins and operating leverage, management said 2025’s overall margin outcome reflected segment mix. During Q&A, the company said ICS has shown stronger operating leverage recently and has been positioned to expand margins faster than Semi, while Semi margins can fluctuate with product mix and ongoing R&D and engineering investments tied to scaling advanced nodes.
Kemp framed Qnity’s strategy as being a “premier technology solutions provider across the semiconductor value chain,” emphasizing materials used to “smooth, shape, connect, and protect.” He cited three structural advantages: the breadth of its portfolio, innovation that has earned “a seat at the design table” with global technology companies, and a “local-for-local” manufacturing and R&D footprint close to customers.
In Semi, management described demand tied to advanced logic and memory transitions, including continued scaling of 3 nm and early 2 nm production, next-generation DRAM and high-bandwidth memory, and higher-layer NAND architectures. Kemp said advanced packaging represented approximately 10% of Qnity net sales in 2025, and he highlighted that packaging integrates solutions from both segments.
Kemp also discussed the company’s CMP portfolio and said it introduced the Emblem CMP pad platform in October, designed for aggressive planarization requirements of advanced chips, including N3 and N2 logic and HBM3 and HBM4. In Q&A, management confirmed CMP is used in advanced packaging as well, describing planarization as critical for copper-to-copper bonding, including hybrid bonding formats.
On end markets, management said data centers remain the strongest area, while it is also seeing “continued signs of increasing content and demand recovery” in industrial areas such as automotive, communication infrastructure, and aerospace and defense. On the consumer side, Kemp said next-generation devices are shifting toward edge computing and on-device generative AI, creating additional content opportunities.
Goss said Qnity generated $706 million of adjusted pro forma free cash flow in 2025, equal to 15% of net sales, and ended the year with over $900 million in cash. He said year-end net leverage was approximately 2.2x, below the company’s long-term target of less than 3x.
The company reiterated its capital allocation framework, led by organic reinvestment. Goss said 2026 capital spending is expected to rise to 9% of sales to support local-for-local investments, IT systems independence work, and transformation initiatives, with CapEx expected to return to about 6% of net sales in future years.
Management also highlighted actions aimed at shareholder returns and flexibility, including:
A dividend that was declared in December (described as the company’s “first quarter dividend”).
A 500 million share repurchase authorization approved by the board, intended to provide flexibility for opportunistic purchases depending on market conditions.
The option to voluntarily pay down debt.
Separately, Qnity announced a multi-year transformation plan expected to deliver approximately $100 million in EBITDA run-rate benefit by the end of 2028, with approximately $140 million in costs to achieve over the next two to three years. Goss said the plan centers on commercial and innovation excellence, productivity and quality improvements through automation and tailored AI applications (supported by IT independence), and strengthening the local-for-local model through supply chain and legal entity simplification and footprint optimization. In Q&A, management said only a small amount of the benefit is expected in 2026, with the remainder coming in 2027 and 2028.
For 2026, Goss said the company expects MSI wafer start data to grow at a mid-single-digit rate and views MSI as a key demand indicator. Qnity’s full-year 2026 guidance calls for:
Net sales: $4.97 billion to $5.17 billion
Adjusted Operating EBITDA: $1.465 billion to $1.575 billion
Adjusted EPS: $3.55 to $3.95
Adjusted free cash flow: $450 million to $550 million
For the first quarter, management said it expects high single-digit sequential net sales growth with a margin profile similar to the fourth quarter, citing AI-led demand and notable strength in ICS. During Q&A, executives said seasonality has been less pronounced since the 2023 downturn, with the company generally expecting steady performance through the year and a modest peak in the third quarter.
Management also discussed guidance sensitivity. Kemp said the low end of the revenue range could be driven by greater constraints from the memory market and “significant demand destruction,” while upside would depend on customers’ ability to bring incremental advanced-technology capacity online, allowing Qnity to benefit from both higher volumes and increased content tied to node transitions. The company said it expects ICS to be “a little bit stronger” than Semi in 2026, consistent with recent momentum.
On China, Kemp said China represented just over 30% of total sales in 2025 and grew at a high single-digit rate, which he said was better than the company expected. He added that the rest of Asia and the Americas both grew double digits in 2025, and the company expects similar geographic dynamics in 2026.
Qnity Electronics Inc is a premier technology solution provider across the semiconductor value chain. Qnity Electronics Inc is based in WILMINGTON, Del.
