What Solstice Advanced Mat (SOLS) Said on Its Q3 Earnings Call

Key Points

• Solstice beat its Q3 sales guidance and raised its full-year outlook for a second consecutive quarter. Sales rose 8% to about $1.05 billion, adjusted EBITDA increased 13% to $265 million, and adjusted EPS was $0.80; 2026 adjusted EPS guidance is now $2.90–$2.95.
• Electronic materials sales jumped 31%, fueled by semiconductor, AI and data-center demand. Solstice committed more than $200 million to double capacity at its Spokane facility, with most of the expansion expected by 2028.
• Nuclear backlog reached $2.6 billion, with customer contracts extending through 2039; Solstice expects to exceed 10,000 tons of production this year. Refrigerant growth also offset residential-market weakness, while construction-related sales remained soft.

Solstice Advanced Mat NASDAQ: SOLS reported third-quarter 2026 results that exceeded its sales guidance, driven by growth in electronic materials, refrigerants and healthcare packaging. The company also raised its full-year outlook for the second consecutive quarter, citing continued momentum across its portfolio and improved operating leverage.

Third-quarter net sales rose 8% year over year to approximately $1.05 billion. GAAP net income attributable to Solstice was $80 million, compared with a $35 million loss in the prior-year period. Diluted earnings per share were $0.50, while adjusted diluted EPS was $0.80. Adjusted EBITDA increased 13% to $265 million, and adjusted EBITDA margin expanded 109 basis points to 25.3%.

“Third quarter net sales increased 8%, exceeding the top end of our guidance range, led by electronic materials, refrigerants, and healthcare packaging,” President and CEO David Sewell said during the company’s earnings call.

Electronic Materials Posts Record Quarter

The Electronic & Specialty Materials segment recorded sales of $320 million, up 13% from a year earlier. Segment adjusted EBITDA climbed 44% to $68 million, while adjusted EBITDA margin increased 453 basis points to 21.2%.

Electronic materials sales rose 31% to $135 million, supported by demand for sputtering targets and thermal solutions used in memory and artificial intelligence-related applications. Sewell said data center and AI-related businesses represent about 6% of Solstice’s expected 2026 revenue, with sales in those applications up more than 50% from the prior year.

The company expects approximately $100 million in 2026 sales from data center cooling applications in refrigerants and more than $150 million from electronic materials used across the semiconductor and data center value chain, including thermal interface materials, heat spreaders, physical vapor deposition targets and electronic polymers.

Solstice is expanding sputtering-target capacity at its Spokane, Washington, facility. Sewell said the company is currently selling all it can produce at that site and has committed more than $200 million to double the plant’s capacity and improve efficiency. The company expects some incremental volume from the project in 2027, with most of the capacity increase arriving in 2028.

“We are pulling in capital” to accelerate the expansion, Sewell said, adding that customer demand remains robust through 2030 and beyond. The company is also in early discussions about a potential additional expansion, he said.

Refrigerants Growth Offsets Residential Market Weakness

Refrigerants & Applied Solutions generated third-quarter sales of $726 million, up 6% year over year. Segment adjusted EBITDA rose 3% to $251 million, with adjusted EBITDA margin of 34.5%.

Refrigerant sales increased 8% to $433 million. Strong automotive and data center demand offset softer residential markets, according to the company. Sewell said the business continues to face headwinds from residential heating, ventilation and air-conditioning demand and destocking related to 454B refrigerants, but expects modest year-over-year refrigerant growth in the fourth quarter.

Looking toward 2027, Sewell said Solstice expects the 454B market to normalize after the current destocking cycle. He said the company’s portfolio breadth and intellectual property in automotive, commercial and data center applications have helped offset residential weakness.

Healthcare Packaging sales rose 24% to $61 million, reflecting higher volumes and favorable pricing after customer destocking in the second half of 2025. Sewell characterized the business as a mid-single-digit growth operation on a normalized basis, noting that its two-year compounded growth rate is about 6%.

Building Solutions & Intermediates sales declined 5% to $167 million amid continued softness in construction-related markets.

Nuclear Backlog Reaches $2.6 Billion

Nuclear sales rose 4% to $66 million, despite an approximately $30 million impact from previously disclosed product loan returns. The company said underlying demand remains strong, with nuclear backlog reaching $2.6 billion and customer contracts extending through 2039.

Solstice now expects to exceed 10,000 tons of production at its Metropolis facility this year. Through debottlenecking projects, it sees a path to an additional 1,000 to 2,000 tons of output by the end of 2027 at limited incremental capital cost.

Sewell said the added capacity is expected to address potential unmet demand through 2030, while the company continues evaluating a larger-scale expansion. A final decision on that project will depend on customer commitments, expected returns, project costs and engagement with the U.S. government. Solstice has multiple conditional volume commitments but has not yet reached its target of having about 80% of capacity covered by customer commitments.

The company typically contracts about 90% of its nuclear conversion capacity, leaving approximately 10% available for the spot market, Sewell said.

Cash Flow, Buybacks and Raised Outlook

Operating cash flow totaled $693 million through the first nine months of 2026, while capital expenditures were $325 million, up 31% from the previous year as Solstice funded capacity expansions in electronic materials, safety and defense solutions, and nuclear. Free cash flow was $368 million.

At Sept. 30, Solstice had approximately $714 million in cash and cash equivalents, total debt of roughly $2 billion and net debt of about $1.25 billion. Net leverage was 1.3 times trailing 12-month adjusted EBITDA.

The company repurchased $100 million of shares during the third quarter and plans to substantially complete the remaining $400 million of its current authorization by the end of the first quarter of 2027.

• Full-year 2026 sales guidance was raised to $4.195 billion to $4.22 billion.
• Adjusted EBITDA guidance was raised to $1.05 billion to $1.06 billion.
• Adjusted diluted EPS guidance was raised to $2.90 to $2.95.
• Fourth-quarter sales are projected at $1.01 billion to $1.035 billion, with adjusted EBITDA of $246 million to $256 million and adjusted EPS of $0.57 to $0.62.

Capital expenditure guidance for the year was unchanged at $420 million to $440 million.

About Solstice Advanced Mat (NASDAQ:SOLS)

Solstice Advanced Materials, Inc NASDAQ: SOLS is a specialty materials company that develops and manufactures engineered materials and chemical technologies for industrial and commercial applications. The company was established as an independent public company following the separation of Honeywell's Advanced Materials business.

Its portfolio includes fluorine-based products, specialty films, advanced fibers, resins, additives, and other performance materials. These products are used in areas such as refrigeration and air conditioning, healthcare and pharmaceutical packaging, electronics and semiconductors, transportation, aerospace, and protective equipment.

Solstice Advanced Materials serves customers across global markets through a portfolio that includes Solstice refrigerants and blowing agents, Aclar specialty pharmaceutical films, and Spectra high-performance fibers.

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