Quaker Chemical Corporation Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $2.81b | Revenue (TTM) = $1.98b
Market Cap = $2.81b | Estimated Revenue = $2.05b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $3.53b | Revenue (TTM) = $1.98b
Enterprise Value = $3.53b | Forward Revenue = $2.05b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Quaker Chemical Corporation Stock Analysis
Analyst Opinions
11 Analysts have issued a Quaker Chemical Corporation forecast:
Analyst Opinions
11 Analysts have issued a Quaker Chemical Corporation forecast:
Quaker Chemical Corporation Events
Past Events
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JUL
31
Q2 2026 Earnings Call
about 2 months ago
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MAY
1
Q1 2026 Earnings Call
5 months ago
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FEB
24
Q4 2025 Earnings Call
7 months ago
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OCT
31
Q3 2025 Earnings Call
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Quaker Chemical Corporation — Q2 2026 Earnings Call
1. Management Discussion
Greetings, and welcome to the Quaker Houghton Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to John Dalhoff, Director of Investor Relations.
Mr. Dalhoff, you may begin.
Thank you. Good morning, and welcome to Quaker Houghton's Second Quarter 2026 Earnings Conference Call. Joining us on the call today are Joe Berquist, our President and Chief Executive Officer; Tom Coler, our Executive Vice President and Chief Financial Officer; and Robert Traub, our General Counsel.
Our comments relate to the financial information released after the close of the U.S. markets yesterday, July 30, 2026. Our press release and accompanying slides can be found on our Investor Relations website. Both the prepared commentary and discussion during this call may contain forward-looking statements, reflecting the company's current view of future events and their potential effect on Quaker Houghton's operating and financial performance. These statements involve uncertainties and risks, which may cause actual results to differ.
The company is under no obligation to provide subsequent updates to these forward-looking statements. This presentation also contains certain non-GAAP financial measures, and the company has provided reconciliations to the most directly comparable GAAP financial measures in the appendix of the presentation materials, which are available on our website. For additional information, please refer to our filings with the SEC.
Now it's my pleasure to hand the call over to Joe.
Thank you, John, and good morning, everyone. We achieved our fourth consecutive quarter of year-over-year profitability growth in the second quarter, highlighted by a 7% increase in sales volumes. This resulted in the highest quarterly adjusted EBITDA in our company's 160-plus years history.
Our volume increase was driven by broad-based growth and net share gains across all regions, amid end markets that we estimate were flat to slightly above the prior year in the aggregate, tempered by offsetting pockets of strength and weakness. Demand remained steady through the end of the quarter after a strong start in April as some customers accelerated buying against the backdrop of the crisis in the Strait of Hormuz. Asia Pacific once again delivered the strongest performance, marking a second consecutive quarter of double-digit volume growth.
Our team successfully navigated sharp increases in raw material costs and supply disruption resulting from the conflict in the Strait of Hormuz. Through disciplined execution and by engaging in proactive customer communication, we were able to leverage the flexibility of our global manufacturing network and maintain supply continuity throughout the quarter.
Gross margins declined sequentially, but stronger volumes and improved utilization rates helped offset product margin pressure. We implemented price increases throughout the quarter, and we'll see further adjustments from our index pricing in the third quarter. Underlying market conditions were mixed. Demand was steady despite the geopolitical uncertainty with pockets of growth in select markets as normal buying patterns returned. Steel and aluminum end markets trended positively, while automotive light vehicle production remained challenged across most regions and geographies.
Some customer purchasing activity may have been pulled forward in response to the Middle East conflict early in the quarter, but we do not believe prebuy activity had a significant impact on the quarter's results. In aggregate, we estimate end markets were flat to slightly above the prior year, underscoring the significant contribution of share gains to our volume growth.
Turning to the second quarter results. Net sales increased 10% year-over-year, driven by mid- to high single-digit share gains and were achieved across all regions. Momentum remains strongest in Asia Pacific, where we are winning significant new business in metalworking by penetrating growing sectors like electrical vehicle OEMs and component manufacturers. We continue to execute effectively in attractive growth markets such as China, India and Thailand, where our investments in local capabilities and customer relationships are translating into meaningful wins.
The Americas and EMEA regions each delivered mid-single-digit volume growth during the quarter. In the Americas, we saw improvement in customer activity levels with the return of previously idled capacity and contributions from recent business wins. The Americas region delivered one of its strongest volume performances in several quarters as operational and customer-specific challenges that affected prior periods improved against the backdrop of firming demand. Our strong customer pipeline and commercial execution drove volume growth in EMEA as we benefited from recent wins in metals and metalworking in that region and continue to grow in the Middle East and Africa despite the challenging backdrop.
Adjusted EBITDA margins reached 16% during the quarter, reflecting the increased top line performance and stable SG&A, which declined as a percentage of sales versus the first quarter. In addition to delivering strong financial results, we are executing key strategic initiatives that support our long-term growth and profitability objectives. We remain committed to a disciplined and balanced capital allocation strategy. In May, we announced a new $250 million stock repurchase authorization and returned approximately $24 million of cash to shareholders through repurchases during the second quarter.
We also successfully completed the refinancing of our credit facility, further enhancing financial flexibility. In addition, our Board of Directors approved an approximately 4% increase to the quarterly dividend, marking our 17th consecutive annual dividend increase and our 50th dividend increase since becoming a public company. At the same time, we remain active evaluating potential acquisition opportunities that strengthen our business and support our long-term growth strategy.
We continue to assess targets that expand our portfolio, accelerate innovation and deliver geographic and channel diversification in new markets. With our strong balance sheet and improved financial flexibility, we remain well positioned to pursue strategic opportunities that create value for shareholders. We will continue to take a prudent approach to capital deployment, weighing returns to shareholders, balance sheet discipline and careful investments in growth.
Turning to the conflict in the Middle East. We continue to navigate the ongoing challenges and are maintaining reliable supply, and strong service levels to our customers in a tough environment. Our direct sales into the Middle East and Africa have remained steady, and our consistency of supply has enabled us to win new business in the region. We continue to monitor the situation closely, but have not experienced any significant supply disruptions to date.
In many instances, global supply chains have begun adapting to the changing environment, and our global network flexibility continues to ensure reliable service to our customers. But the situation is volatile and the trajectory is uncertain. We are continuing to invest in the capabilities and infrastructure that further strengthen our network and position us for future growth.
In June, we achieved an important milestone in our Asia Pacific plan with the successful start-up of our new manufacturing facility in Zhangjiagang, China. This new site enhances our local-for-local operating model and will enable us to manufacture the full breadth of our portfolio inside China, reducing the need to import certain products and thereby creating additional flexibility, efficiency and service responsiveness for customers throughout the Asia Pacific region.
More broadly, we continue to take actions across the business to improve efficiency, simplify operations and optimize our cost structure. We are pleased with the progress we are making with the business transformation and cost optimization program announced last quarter. The actions we implemented during the second quarter are expected to deliver approximately $10 million of run rate savings with benefits already reflected in our Q2 results. We will continue to focus on process simplification, productivity improvement and manufacturing footprint optimization, which will further strengthen our profitability over time. The opportunity for profitability improvement over the next few years supports our long-term goal to achieve EBITDA margins above 18%.
Finally, we released our annual sustainability report during the second quarter, highlighting our progress in advancing sustainable solutions for our customers and improving the environmental performance of our operations. The accomplishments highlighted in this year's report underscore how sustainability is embedded within our culture and is central to how we innovate, operate and partner with customers around the world.
Turning to the outlook. Our view on underlying market conditions remains unchanged. The first half of the year progressed in line with our expectations, and we still expect end markets will be flat to modestly positive during the second half of 2026. Raw material costs have currently stabilized, but at elevated levels. Base oil prices remain volatile due to supply constraints across the refinery network and ongoing uncertainty. Based on our current visibility to supply dynamics, we expect our overall input costs to remain stable at these higher rates in the short term and begin to moderate as we progress through the back half of the year.
As a result, we anticipate that our gross margin percentage in the third quarter will be in the range of Q2 gross margins as we work through the timing of raw material cost inflation, inventory movements and price recovery actions. At the same time, incremental pricing actions and certain index-based adjustments will take effect, which will provide increasing benefits as the quarter progresses and should return us to our target range above 36% by the end of the year.
Operationally, we were pleased by the strong volume performance in Q2. Demand remains healthy and is showing no signs of slowing in the early part of the third quarter. We expect normal seasonal patterns in the second half, which has historically been better than the first half of the year. In the third quarter specifically, there may be longer seasonal shutdown activity in parts of Europe with the summer holiday period and unseasonably higher temperatures across the continent as well as customers managing their inventories.
However, demand in the Americas is improving and tracking broadly in line with normal seasonal patterns, which should help offset the expected slowness in Europe. We anticipate our third quarter performance will be in the range of the second quarter, barring disruptions in the market. As a result, we expect to deliver meaningful revenue and mid- to high single-digit adjusted EBITDA growth for the full year 2026. Our consistent ability to generate share gains, our commitment to execute pricing actions and improve our cost structure and the advantages derived from our global operating network position us well to steadily navigate uncertainty while creating long-term value.
In closing, I am extremely proud of how our team performed during a particularly challenging quarter. Our industry-leading teams of operators and experts enabled us to achieve outsized share gains despite the volatility in the macro environment, resulting in record quarterly EBITDA. We continue to demonstrate the resilience in our differentiated service model that are enabling us to win regardless of external market conditions. And we expect to carry our strong momentum through the remainder of the year.
With that, I will turn the call over to Tom to walk through the financials in more detail.
Thank you, Joe, and good morning, everyone. Second quarter net sales were $533 million, a 10% increase from the prior year. Sales volumes increased 7%, driven by global net share gains that exceeded the high end of our target range, with Asia Pacific once again being the largest contributor.
Selling price and product mix contributed an additional 1% to net sales as pricing actions to offset higher raw material costs resulting from the Middle East conflict were partially offset by changes in the mix of products and services. Sequentially, selling price and product mix contributed a 4% increase to net sales compared to the first quarter. We also had a benefit of 2% to net sales year-over-year from favorable foreign currency across all regions.
The second quarter marked the first period in which prior year acquisitions, including Dipsol, are included entirely within our organic results. Gross margins declined on both a year-over-year and sequential basis to 35.5% due to product margin pressure from higher raw material costs. The sequential decline of 130 basis points was less pronounced than originally anticipated due to better top line performance stemming from higher volumes from our global net share gains as well as solid execution on our 2 rounds of price increases to offset raw material inflation during the quarter.
On a non-GAAP basis, SG&A increased approximately $10 million or 8% in the second quarter compared to the prior year. While we began to see benefits from the transformation actions taken during the second quarter, these benefits were offset by higher incentive compensation and unfavorable foreign currency impacts. We delivered $85 million of adjusted EBITDA in the second quarter, while adjusted EBITDA margin of 16% increased 40 basis points year-over-year and 90 basis points sequentially. This performance highlights the operating leverage in our business as strong volume growth drove earnings expansion even in an inflationary environment where margins were under pressure.
Switching now to our segment results. Asia Pacific sales in the second quarter increased 12% year-over-year, driven by the second consecutive quarter of 10% organic volume growth. This was the result of new business wins that once again exceeded the high end of our total company target range of 2% to 4%. Favorable selling price and foreign currency also each contributed 1% growth to net sales. Segment earnings in Asia Pacific increased approximately $8 million or 27% in the second quarter compared to the prior year, driven by higher sales volumes.
Second quarter net sales in EMEA increased 13% year-over-year, driven by 7% volume growth, higher selling prices related to price actions taken during the quarter to offset raw material inflation and favorable foreign currency impacts. Segment earnings in EMEA increased $8 million or 31% in the second quarter compared to the prior year, primarily due to better top line performance. Lower manufacturing costs related to the closure of our manufacturing facility in Dortmund, Germany also contributed to the improved segment earnings result.
Second quarter net sales in the Americas increased 7% year-over-year as 4% higher sales volumes were complemented by favorable impacts from foreign currency and higher selling prices. Higher volumes were primarily the result of new business wins, but also benefited from the resumption of previously idled customer production, along with some new capacity coming online in our metals business. Segment earnings in the Americas decreased $2 million or 3% in the second quarter compared to the prior year as better top line performance was offset by higher manufacturing and operational costs.
Turning to nonoperating costs. Our interest expense was $10 million in the second quarter of 2026, which was consistent with the previous quarter, while our cost of debt decreased to approximately 4.4%, reflecting the benefits of our refinancing actions and a more optimized debt portfolio. Our effective tax rate, excluding noncore and nonrecurring items, was approximately 28% in the second quarter, which was in line with the previous quarter and our full year target range of 28% to 29%.
Finally, our second quarter GAAP diluted earnings per share were $1.55, and our non-GAAP diluted earnings per share were $2.19, a 28% increase over the prior year due to improved operating performance and lower interest expense as a result of reduced borrowings. Cash generated from operations was $29 million in the second quarter, decreasing from $42 million in the prior year. The lower cash generation in the current year is driven by higher working capital outflows resulting from increased sales volume and increased inventory associated with closing our facility in Dortmund and opening our new facility in China. These items were partially offset by improved operating performance.
Capital expenditures in the second quarter were $10 million, primarily related to the construction of our new facility in China. For the full year, we expect 2026 capital expenditures to be approximately 2.5% to 3% of sales. During the second quarter, we announced the approval of a new $250 million stock repurchase authorization that replaces our previous repurchase program and recently announced an increase in our quarterly dividend of 4.3%. We also repurchased approximately $24 million worth of shares and paid approximately $9 million in dividends, returning a total of $33 million of cash to shareholders in the second quarter.
Together, our share repurchase activity and increased quarterly dividend reflect our confidence in the strength and durability of our cash flow generation and underscores our commitment to return capital to shareholders through a balanced and disciplined capital allocation strategy. We delivered strong second quarter results, driven by continued share gains, disciplined execution of our pricing actions and broad-based growth across all regions. Our team executed effectively in an uncertain environment, leveraging our global footprint, pricing actions and our operating discipline to deliver record profitability. With a strong balance sheet, enhanced financial flexibility and continued progress on our transformation initiatives, we remain well positioned to execute our strategy and create long-term value for our shareholders.
With that, I will turn it back over to Joe.
Thank you, Tom. To close, our record second quarter results reinforce the strength of our business model and our ability to consistently outperform our end markets despite macro disruptions and uncertainty. While the external environment remains dynamic, we are confident in our approach and our ability to continue creating value for customers and shareholders and the opportunities ahead in the second half of the year.
With that, we will be happy to answer your questions.
[Operator Instructions] Our first question comes from Mike Harrison with Seaport Research Partners.
2. Question Answer
Congrats on a nice quarter. I was hoping that maybe we could start, just getting a little bit more color on what you guys are seeing on the raw material front. I'm curious what specific raw material baskets are moving higher or continuing to show a lot of volatility. And really interested in understanding the timing of the P&L impact to the extent you can help us quantify how much raws were up in Q2 and what the expectation is for inflationary impact in Q3 and Q4, that would be very helpful.
Yes. Good question, Mike. So overall, if you think about our raw material buckets, there's kind of three buckets, right? The things that are related to base oils or derivatives of crude the additives, which tend to be closely linked to that and then the oleo chemicals. And I would say the base oil related, crude related, is about 2/3 of our bucket remains pretty volatile. It's, as I mentioned in the comments, at that elevated range right now. And that's -- it's kind of like the new normal, right, is this volatility in the elevated range.
There is a little bit of softening on the oleo chemicals and things that are delinked from that, and it tends to be more regional impacts overall. Raw material container costs, pretty significant for us in the quarter. We think that those those impacts really peaked in June and even early this month in July. As we go forward, I think there's different elements at play, right? We have certainly pricing that came on during the quarter. We have index adjustments that happened at the end of the quarter and even in the middle of this quarter.
And there's also the inventory movements. I mentioned that in the comments as well. What that means is as the cost of the inventory changes, we revalue that inventory and there tends to be a capitalization effect for a couple of months as that moves through. So what I would say, as we've modeled this out, we think gross margins are going to be pretty flat, quite frankly, in Q3 from Q2 and then improving hopefully toward the end of the quarter and into Q4.
All right. And then just on the volume front, Asia has been strong, and so I don't think that was a huge surprise, but EMEA was surprisingly strong. I was hoping maybe for both regions, you can talk about the sustainability of the strength that you're seeing.
Yes. I mean the underlying markets in EMEA were -- steel was up and industrial production was up slightly. But conversely, the auto ICE production, we think, was down double digits, mid-teens. So in composite, we'll say market was flat to slightly up. Most of the growth that we're seeing is really what I would call self-help. It's the share gains that we've been delivering from our pipeline. They were on the higher end of our range. So I would say slightly above that kind of 4% high end of the target range for us.
How sustainable is that for us? I mean I think remaining within that 2% to 4% range is something we're pretty confident that we'll continue to do. And then anything that happens in the market outside of that would bolster that growth rate. But a lot of new business wins in that region. And we've been talking about share gains over the past several quarters, and we're starting to see the impact of that.
In EMEA, in the second quarter, early in the quarter, April was a busy month. We do think that region, in particular of the three different segments for us, had some prebuy. So I would say half to 2/3 of the growth in the quarter was from share gain with that remaining half to 1/3 to 1/2 from prebuy. But we're through kind of the early part of Q3, and demand has remained pretty steady in Europe. So we think most of that impact -- it wasn't a huge impact on the quarter. Let's just say that. And we think that the demand environment in EMEA has remained pretty steady. We're entering into traditionally, the holiday period in August is a very slow time, but then usually that recovers in September.
For Asia Pac, I mean, Asia Pac, some softness really in that market. So it really accentuates, kind of, the double-digit volume growth that we're getting there. It's coming from share gain. It's coming from winning new lines, whether that's in the metal space or the metalworking space. We've talked about how important it's been for us to gain share with the electric vehicle manufacturers in that part of the world.
Do I expect us to continue to take share in double digit? I would love to say that was true, Mike. I think it will probably normalize at some point in that mid-single-digit range. But we've got a very good team there that's executing on the ground. We just opened a new plant in China. We're doing very well in India and other parts of Asia. So that will be, I think, a growth engine for us for several foreseeable quarters as far as I can tell right now.
All right. And then my last question is on Americas operating margin. You were down 250 basis points year-on-year and referenced some higher manufacturing and operational costs. I'm just wondering if you can help us understand a little bit more between those operational issues and raw materials and pricing and maybe any volume leverage or cost actions you're taking. Help us understand the puts and takes around Americas margin and how we might think about that trending into the second half?
Yes. I do think -- so second quarter, specifically, we had some inventory disposal costs related to quality related to kind of things we're working through at one of our plants. On the flip side, good problems to have. I think we had some higher inventory as we work off backlog and we're trying to catch up some of our grease orders. And then one of our primary plants there in Middletown, we've gone to a 24/7 operation right now. And so we will see some ongoing higher costs in the Americas.
However, I think there was a little bit of onetime nature on the operational side in the Americas in the quarter. So I would expect that to improve. And overall, operating margins should return to where they've been traditionally for that region.
Our next question comes from Pete Osterland with Truist Securities.
So I just wanted to start by following up on the margin performance, particularly with the drop-off for gross margins less severe than what you anticipated a quarter ago. I guess to what extent did this reflect faster or higher-than-expected pricing implementation? And thinking about the second half, do you now see upside to the 36% to 37% range that you've talked about exiting the year at as you continue to implement pricing in the back half?
Don't necessarily -- we're not modeling upside, Pete, and thanks for the question. I think what we kind of mentioned it before, there's this inventory valuation aspect that's a little bit of an accounting exercise, but the timing of how the prices roll into our costs and how those costs work their way through the system. We did a good job with pricing. We certainly didn't get all the pricing that we wanted to get, and there's still some pricing that will come on.
One of the key things is the volume. We modeled a 200 to 300 basis point kind of impact to gross margins in Q2. The volume was a nice surprise for us, right? And that capacity utilization in our plants was helpful. We're also starting to see the benefits of plant closures, right? We made a decision to close a plant in Europe, and you saw the Europe operating margins improve in the quarter. So it's a mix of different things. I do -- I firmly believe that we will be above that 36% gross margin by the end of the year. We say our target range is 36% to 37%. There have been times in the past in deflationary environments where we can see expansion of our gross margins higher than that. And would it surprise me if that happened? No, but it's not something we're anticipating right now.
Very helpful. And then also just wanted to ask a follow-up on capital allocation. Following your recent buyback authorization and some of that repurchase activity kicking in here in the second quarter, how should we think about your plans for the cadence of buybacks this year? How are you currently weighing share repurchases against the potential you see to execute on additional bolt-on M&A?
Yes. This is Tom. Thanks for that question, Pete. I would say we continue to have really good flexibility from a capital allocation standpoint with the new share repurchase authorization. We just refinanced our credit facility and have added some capacity there as well. First and foremost, we want to deploy capital to help the business grow, whether that's through organic investments like our new plant in China or inorganic opportunities through continuing to work our M&A pipeline.
So I think we'll continue to be opportunistic as we think about share repurchases, balance that with dividend payments. We just announced that we increased our dividend 4.3% coming earlier this week. And so again, we're going to use all the tools in the toolkit and continue to have a balanced approach. But first and foremost, primarily, we want to deploy capital to grow.
Our next question comes from Laurence Alexander with Jefferies.
It's actually Dan Rizzo on for Laurence. Just getting back to kind of the Asia share gains that you guys are kind of doing. I was wondering if that's like a lot of singles or some -- meaning that there's a lot of smaller new wins? Or is it a couple of customers where you're getting really great penetration and how that should look moving forward?
Yes. Thanks for the question, Dan. It's really broad-based in Asia. China is the biggest aspect, biggest country of the Asia, but landscape, but really, our growth in India has been very good as well as Southeast Asia. So -- and it's across all product lines. So I think it's a lot of singles and doubles. When you get a new mill that comes online, for instance, a new cold rolling line in China this past year, we were able to get our fluid intelligence equipment on that line. And it's pretty big.
So every now and then you have a triple, right? But to the nature of your question there, I think it's broad-based. It's not coming from just a handful of things. It's really across the industrial sectors and across the geographic landscape in that region.
So -- and with that, say that the new fluid intelligence at a new plant, is that kind of the toehold and then over the next few years, you should penetrate more? I mean is that kind of how it works like this is the way in and then we take it from there. I mean, am I thinking about that right that it could -- I guess, what I'm trying to ask is it could accelerate with each plant as you just get a foothold in it?
I mean that's the design, right? We're -- it's really an enhancement of our service model. And when you're -- when it works as well as it does in the rolling applications, if you're building a new line, right, if a new mill is coming on, we're in touch with not only the OEMs, but also the equipment manufacturers. And it's a way to really control how our fluids are used on those lines so they work very efficiently and give the customers a lot of control over their system, as well as insights how to optimize fluid application with their production processes.
So we continue to work on innovation in that area. It's not just a steel rolling or aluminum rolling offer for us. We certainly have a metalworking offer as well, and we're seeing some penetration on that side. And we expect that to be a real core part of our offer across the business as we go forward. So I do anticipate you will see that, Dan.
And then you mentioned India versus China. I would assume then that India actually offers more opportunity with more new plants and more new metalworking or steel rolling plants coming online there versus China, which I guess would be a little bit more mature at this point. Is that accurate as well?
Yes and no. I mean I think you're seeing in China, you're still seeing a lot of growth on the -- with the electric vehicle segment. So whether that's die casting, electrical steel, all the way through, and there's a lot of line refreshes that are happening there. The overall growth might be decelerating because of -- on a comparative basis, just because of the size of that market, how big it is, but it's not stagnant.
And you're right in pointing out that India is growing differentially. There is I guess, the ballpark figure that people have thrown around is that industrial production there is supposed to double between sort of 2020 and 2030 or 2035, and it seems to be on that pace. There is a lot of new production in that part of the world. And so we're happy to grow as that new production comes online. That's certainly a tailwind for our business.
Our next question comes from Jon Tanwanteng with CJS Securities.
I was wondering if you could just talk about the expectation for share gain and new business wins going forward. I think you've been at or above the high end of your 2% to 4% target range for over a year now, and you're lapping some of that acceleration. What's the competitor dynamic or response given that your business trends are pretty sticky there? And should we recalibrate our expectation of your ability to continue gaining share as you continue to do that? Just help us out with the thoughts on the target range.
Yes. Good morning, Jon. I mean we -- that target range is something that we consider very carefully. Our sales cycle is not a quick sales cycle, usually to get a piece of business. It could be on the short side, 3 months. It could be on the long side a year or longer. And I do think we've had a good run here, right, for the past several quarters.
Why is that happening? I think it's a combination of things. Cross-selling, we've been acquisitive, and we brought on some new technology that adds to our portfolio and increased the size of our addressable market. So we're going into existing customers who are happy with us and saying, "Hey, we have some additional things you can buy from us now," and that does help accelerate that sales cycle.
I also think it's things like just really having a very strong team, a local-for-local model in parts of the world like China, like India that are growing faster and taking advantage of that. It's also leveraging things like our fluid intelligence play. I mean we won some business here in Europe and the Americas this year with some customers that were pretty hard to crack by going in with an enhanced service model around our fluid intelligence equipment, and that got us in the door, and we're able to then convert that new business.
So we will certainly drive. We incentivize our people, everyone in the company, including myself, is compensated based upon targets around net share gains. So reducing churn and increasing share gains. So we're all very, very focused on it. The other piece, Jon, I think that's maybe helped us just from a math perspective over the past few quarters is, we did go through a couple of year period there where we had higher churn, right? And we've got that churn number down the low single-digit area where it's been historically. So when we stop the bleeding on that end, we're able to show a little bit more on the growth side.
Got it. And if you could just drill a little bit more down into the Fluid intelligence piece. How big is that business today? And are you seeing momentum accelerating there? What's the growth rate?
I mean it's hard to say how big the business is. I think when you look at -- how we measure it, we're not really measuring equipment sales. We're measuring the amount of fluid sales that are tied to a fluid intelligence offer, right? And so I would say right now, it's somewhere between 10% and 20% of our revenues have some sort of fluid intelligence component that's part of the service aspect.
How big can it be? How big will it be going forward? We want it to penetrate across the entire business, and we want to use it as a growth engine to penetrate into customers that we don't have today. So I'll just say our ambitions are high there.
Got it. And one follow-on to that. Just -- are the margins associated with Fluid Intelligence higher than your fleet average, just given the way the equipment works and the personnel you dedicate to it?
Not necessarily, not necessarily. Again, I think it's a way -- it's a digitized service model. So it doesn't replace our people, but we're really focused on the product sale, and it really enables that product sale for us. And I think that our margin profile is pretty consistent around the world.
Our next question comes from David Silver with Freedom Capital Markets.
So apologies, this might be kind of a little -- take a little time to get out. But I was kind of -- along with your very strong results this quarter, I would call out maybe the incremental margin performance. I mean, growth in operating income or EBITDA relative to the growth in sales. And I'm thinking that 7% volume growth largely from new business wins, I mean that does strain your skilled labor force to a certain extent.
And I'm just wondering if from your perspective, Joe, you're able to handle continued quarters at this, let's say, high -- mid- to- high single-digit new business win pace with kind of what I would call your installed base. In other words, I guess, under your predecessor, there was some volume erosion, and it's not apples-to-apples, but you are regaining that volume now.
And should I look at some of the very attractive incremental margins that you're reporting now is kind of a sense that maybe your skilled labor force was a little bit underutilized and you were able to take on a fair amount of new business without meaningfully staffing up or adding incremental resources. And if that's the case, I mean, how much more -- I don't want to call it slack, but how much more kind of capability do you think you have here before you would have to meaningfully invest in either new talent or other new resources to service your growing customer base?
Yes. Thank you. It's a really great question, honestly. I think we went through a period, and we're still kind of going through a period where because of the complexity of our systems, master data, just a complex network in our manufacturing space, our skilled labor, right, our subject matter experts that are touching the customer probably spent too much time on internal things, right? And in the last 18 months, that's been kind of my battle cry to make sure that we spend more time doing business with our customers than we do amongst ourselves.
So Tom and I and the rest of the team are really focused on making sure that we're reducing that complexity. We're freeing up people to spend more time with customers. And in the meantime, making very meaningful improvements to our business processes, our master data, our ERP system, just kind of cleaning things up on the back end so our people on the front end can work more effectively. And I think that's working well for us. And we have capacity in our team to do those things.
Long term, I mean, I want to continue to invest in those subject matter experts because ultimately, it's our people that are the biggest difference. It's our service model. And I think we probably got a little bit heavier in the functional areas, and we got a little bit lighter in the commercial areas. And just as a general philosophy, I'm focused on flipping that equation, right? I want us to make sure we're investing and nurturing those -- that commercial talent and becoming more efficient in our back-office area. So it frees up our people to sell to our -- and serve our customers.
Yes. And I would just add to that, David. We've got ample production capacity in terms of our manufacturing network at this point to meet the needs of our customers. Joe talked about cost and complexity reduction and focusing our commercial organization. This is all sort of focused on what Joe and I have talked about, which is driving EBITDA margins to 18% over time. A portion of that is top line growth in scale and a portion of that is cost and complexity reduction, which we've talked about on the Q1 call relative to our transformation initiatives. So I think we've got the opportunity to continue to drive leverage in the P&L, and that's our goal.
Yes, we're saying sustainably above 18%, right? So if you look at where we've been kind of running, that's a 200 basis point plus near-term goal for us to get at, and we feel like we have a line of sight to do that.
I'll have to relisten to that another couple times on replay. But no, I appreciate all the depth there. I did want to go back to the, I guess, capital allocation or share repurchase question. And I guess there's just a lot of moving parts. You're repurchasing shares at a level well above displacing, I guess, any options-related issuance. Your debt did rise a little bit sequentially. You raised your dividend, et cetera.
But just thinking about the share repurchase activity level in light of the new authorization, et cetera. Should I look at the $24 million that was spent here in this quarter as something more opportunistic in nature? Or is this something that we should think about as programmatic? In other words, with the new authorization and your healthy cash flow, I mean, does opportunistic -- do you consider opportunistic share repurchase at, let's say, the current price, a core part of your capital deployment strategy? Or is it more of, I don't know, like a flywheel dependent on M&A opportunities and some other things?
Yes. Good question, David. Yes, I would go back to sort of our overall capital allocation philosophy, which is, first and foremost, invest for growth, whether it's organic or inorganic. You used the word opportunistic. I think that's the way that we think about share repurchases as well as we sort of evaluate where our capital structure is, where our leverage ratio is, what we see relative to our M&A pipeline or internal investments and then how we think about balancing all those pieces. I wouldn't characterize it as programmatic. I would say it is opportunistic and the new repurchase authorization that we have really just gives us the flexibility to be opportunistic as it makes sense in the market.
Our next question comes from Arun Viswanathan with RBC Capital Markets.
This is Adam on for Arun. My understanding is that gross margin outperformance was mostly on volumes for the quarter, but maybe if we could double-click on price a bit. It seems like you're doing quite a good job at pushing that through to offset inflation. So I guess I have two quick questions on that. How much of the price you've already implemented has yet to flow through in third quarter? And how much of your year-over-year growth do you think is mostly from the outperformance in the first half? Meaning how much do you think you're going to have some of this flow through in the second half versus purely in the second quarter?
Yes. So let's talk about the gross margin piece first and the pricing piece first. The majority of the pricing has flown through, right? Because the prices have stabilized at these high levels. And the delay, I guess, has been we have a few index adjustments that are just time-based and they come at the beginning of a new quarter or middle of a quarter sometimes. So I would say we don't expect much more in the short term from a net selling price per kilo expansion unless the external environment dictates that we have to do that. And hopefully, it doesn't. But if it does, we'll go and get it.
I think you're asking second quarter was a really good volume quarter. It was a good quarter for us overall. Is that sustainable? I mean we see -- as I said in the comments upfront, I think the third quarter will probably look very closely like second quarter. Traditionally, third quarter tends to be a good quarter for us. The second half of the year tends to be a little bit better for us than the first half of the year. That growth -- the Asian markets, for sure, in the second half of the year have traditionally been better than the first half.
Europe will be tough, right, in the month of August, and they may walk back a little bit in Q3, but we're seeing some relative strength in the Americas right now, and we're pretty confident that demand will hold up that we would see a third quarter pretty similar to what we saw in the second quarter. And then the question becomes what happens in the fourth quarter. With all the volatility in the world right now, I don't really want to go that far down the road, but I think we're tracking on this sort of mid-single-digit to high single-digit EBITDA growth for the full year.
Okay. Great. And maybe if we could go back to the bolt-on piece. It kind of sounds like you're saying that India and China are consistently providing the most opportunity for maybe acquisition potential. How are you thinking about that in terms of end markets? And I know there are several kind of reasonably depressed end markets like building construction, et cetera.
So how are you thinking about acquiring things at discounted multiples to bring in accretive bolt-ons versus bringing things in that are not necessarily at their growth part of the cycle? Or is that not how you're thinking about it at all and you're more concerned with the sort of the cross-selling and synergistic piece?
No. I mean it's -- so I think you captured pretty well the variables, right, that we consider. So when we're talking about bolt-ons, we're looking for -- we're either going to look for something that's a portfolio addition, right, or some IP or a capability that we don't have today. A capability could be technical capability or access to markets or certain channel play. So those are things that we consider. I think we're not necessarily looking to go out and get into things. We help people manufacture things out of metal, right? So if there are parts of the portfolio and value chain today that we don't have or we don't have everywhere, then we would be looking at strengthening our portfolio, adding those capabilities.
There's also, as you said, periodically, there are some things that come along that you would look at purely from a synergy standpoint. It's a pretty fragmented space. There are a lot of regional players, small players in those regions. And if you can go and get something and get some arbitrage on the multiple, then we've done that successfully in the past and would certainly consider doing that in the future. And then we always -- we leave dry powder. We position ourselves to be able to do something more transformational, a larger type of deal. Of course, those are rare, and they take a lot of time to get done. But that's sort of the overall landscape there, Adam.
Yes. And I would just add that we have a track record of buying good businesses, EBITDA positive, cash flow positive businesses that are accretive to our business. And we look at those opportunities, as Joe said, through the lens of a commercial channel or a new product technology or an asset and bringing that into our large global footprint with all of our capacity and capability to accelerate growth in those acquisitions that we've made. So I think that's how we think about our philosophy from a -- sort of a financial standpoint.
We have now reached the end of our question-and-answer session. I would like to turn the floor back over to Joe Berquist for closing comments.
Sure. Thank you. Thank you for joining us today. We appreciate everyone's continued interest in Quaker Houghton. And I also just want to thank our colleagues around the world for their hard work and dedication to our customers. Our people are our greatest asset. Please reach out to John if you have any additional follow-up questions. Thank you.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Quaker Chemical Corporation — Q2 2026 Earnings Call
Quaker Chemical Corporation — Q1 2026 Earnings Call
1. Management Discussion
Greetings, and welcome to the Quaker Houghton First Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to John Dalhoff, Director of Investor Relations. Mr. Dalhoff, you may begin.
Thank you. Good morning, and welcome to Quaker Houghton's First Quarter 2026 Earnings Conference Call. Joining us on the call today are Joe Berquist, our President and Chief Executive Officer; Tom Coler, our Executive Vice President and Chief Financial Officer; and Robert Traub, our General Counsel. Our comments relate to the financial information released after the close of the U.S. markets yesterday, April 30, 2026. Our press release and accompanying slides can be found on our Investor Relations website.
Both the prepared commentary and discussion during this call may contain forward-looking statements reflecting the company's current view of future events and their potential effect on Quaker Houghton's operating and financial performance. These statements involve uncertainties and risks, which may cause actual results to differ. The company is under no obligation to provide subsequent updates to these forward-looking statements. This presentation also contains certain non-GAAP financial measures, and the company has provided reconciliations to the most directly comparable GAAP financial measures in the appendix of the presentation materials, which are available on our website. For additional information, please refer to our filings with the SEC. Now it's my pleasure to hand the call over to Joe.
Thank you, John, and good morning, everyone.
We delivered a strong first quarter with organic volumes up 3% year-over-year, resulting in our third consecutive quarter of adjusted EBITDA growth. Our performance was driven by new business wins in all regions, highlighted by double-digit organic volume growth in Asia Pacific, where we continue to gain traction across the region.
Adjusted EBITDA increased 5% compared to the prior year, building on net share gains that enabled us to outperform our end markets, which we estimate were down approximately 1% in the quarter. Gross margins improved from the fourth quarter, increasing 150 basis points sequentially and 40 basis points year-over-year. The sequential improvement in margins was bolstered by higher utilization of fixed assets and improved operational performance.
Market conditions remain soft overall, with pockets of incremental industrial gains tempered by weak automotive production. The hostilities in the straight of our moves are creating inflationary pressure on raw materials and input costs. But so far, it has not had a significant direct or indirect impact on demand. Strong commercial execution from our team and contributions from our recent acquisitions helped offset the underlying sluggish markets, enabling us to deliver organic volume, revenue and EBITDA growth in the quarter despite headwinds and volatility.
Turning to the first quarter results. Net sales increased 8% year-over-year, fueled by net share gains of 4% at the top of our target range, along with the contribution from recent acquisitions. This marks the 10th consecutive quarter of net share gains, while our end markets have been consistently sluggish. Organic sales volumes in Asia Pacific grew for the 11th consecutive quarter. While our business in China continues to grow above end market rates, we are also achieving outsized growth in emerging markets such as India, Thailand and Vietnam. Operating margins have expanded in the region as we are benefiting from recent organic investments in localized manufacturing.
In EMEA, organic volumes grew 2% in the first quarter as new business wins outpaced persistently tough end markets. Volumes in the Americas declined slightly year-over-year, driven by a lingering customer outage, tariff uncertainty and weather-related disruptions. Despite these challenges, March had the highest volume in the Americas in the last 16 months, signaling improved momentum as we exited the quarter. EBITDA margins declined 50 basis points year-over-year, primarily because of higher SG&A expenditures related to acquisitions, foreign currency and incentive compensation. I would like to provide more color on the ongoing conflict in the Middle East and how we are managing its impact on our business. Immediately after the conflict began, we established an executive level task force to monitor developments, assess potential impacts and coordinate our response.
Our top priority was to ensure the safety of our more than 4,700 employees, particularly those living and working in the region. We also took swift action to confirm supply continuity to customers in the affected region. Since then, the task force has remained actively engaged, tracking conditions closely and addressing emerging pressures. From a business perspective, we have proportionately low direct sales exposure to Middle East countries near the conflict area.
Our sales to North Africa and the Middle East in 2025 were less than 2% of total company net sales. While first quarter results were largely insulated, we expect higher raw material and shipping costs in the second quarter. To address this, we implemented pricing actions across all regions with some taking effect in April. There will be a typical lag between rising costs and price realization, which we expect will create temporary gross margin pressures in the second quarter. Based on the actions we have taken and additional increases planned for this quarter, we expect to recover margins within 1 to 2 quarters. Meanwhile, we are committed to ensuring products reach our customers without disruption. We have not yet seen a meaningful impact on customer demand, but a prolonged conflict could begin to influence broader economic activity, including forward demand and further cost inflation. With this backdrop, we are focused on what we can control.
Today, we are announcing the launch of a new transformation program that will reduce cost and complexity across the organization, optimize our manufacturing network, strengthen sales and technical capabilities and simplify global processes. We will pace investments over the coming months to unlock productivity in a disciplined manner. The first phase is underway through a comprehensive business process review focused on finding cost opportunities and improving master data management. The program will fundamentally change the way we work, and we are looking to modernize the employee and customer experience. In the first quarter, we took steps to streamline our executive leadership structure to sharpen customer focus and accelerate decision-making. This program is central to achieving adjusted EBITDA margins at or above our target of 18%.
We expect to exit this year with approximately $10 million in new run rate savings. Over the next 3 years, we see a clear path to delivering at least $20 million to $30 million of sustainable structural cost improvement with much of that target already identified. We have a clear line of sight to a robust set of initiatives, giving us confidence in our long-term transformation path. This new program complements actions that are already underway. The closure of our manufacturing facility in Dortmund, Germany remains on track, and we are beginning to realize the associated financial benefits.
We continue to expect approximately $2 million in cost savings from the closure in 2026 and $5 million in annual run rate savings beginning in 2027. We also recently announced the planned closure of our manufacturing facility in Songjiang, China, which will coincide with the start-up of our new facility in Zhongjuang later this summer. Production from Songjiang will transition to the new site as it comes online, enabling more efficient operations and enhanced capabilities. This modern facility will strengthen our ability to serve customers across Asia Pacific and manufacture recent portfolio additions more competitively at the local level. Turning to the outlook. Our view on macro trends is consistent with prior expectations. End markets declined modestly in the first quarter as expected. And while we still continue to predict flat end market conditions for the full year with normal seasonal improvement and a slightly better demand environment in the second half, we expect sequential volume and revenue growth in Q2, driven by seasonal improvement and wrap effect of new and recent business wins.
Visibility through the first part of the quarter indicates steady demand. At the same time, we anticipate temporary gross margin pressure related to higher input costs stemming from the Middle East conflict, which is expected to push gross margins below our target range in the second quarter. The situation remains dynamic due to the prevailing market uncertainty. We expect these gross margin headwinds to be temporary, lasting no more than 1 to 2 quarters.
Our current estimate is that second quarter gross margins will be 200 to 300 basis points below quarter 1 on a sequential basis. Through pricing actions we are taking, we expect to fully recover gross margins within our target range of 36% to 37% as we exit the year. With the rapid raw material cost escalation in recent weeks above what we experienced at the end of the first quarter and the ongoing uncertainty of the situation, we are in the process of implementing further price increases, which we expect will be in place before the end of the second quarter.
We are recovering the cost impact from inflation in a responsible way and collaborating with our customers to successfully navigate the complexity of the current situation. As mentioned previously, the company is also taking action to improve our cost structure. Our long-term earnings profile continues to be resilient. Our local-for-local operating model and deep customer relationships differentiate us and enable new business wins. As a result, even amid heightened uncertainty, we continue to expect revenue and adjusted EBITDA growth in 2026, assuming no significant further deterioration in our end markets because of the Middle East conflict. In closing, I am incredibly proud of our team and their consistent execution in a challenging environment. We are making substantial progress across key priorities, including pursuit of new business, cost structure optimization, while also diligently executing our strategy to create long-term value for our customers and shareholders. With that, I will turn the call over to Tom to walk through the financials in more detail.
Thank you, Joe, and good morning, everyone. First quarter net sales were $480 million, an 8% increase from the prior year. Organic volumes increased 3%, driven by global net share gains of 4% across all regions, with Asia Pacific being the largest contributor. Acquisitions contributed an additional 4% to net sales, primarily related to Dipsol, which will become part of our organic base beginning in Q2. We also had a 4% benefit to net sales from favorable foreign currency translation, primarily due to the euro strengthening against the U.S. dollar. Partially offsetting these items was unfavorable selling price and product mix, which was 3% lower than the prior year associated with lower index pricing, regional and geographic mix. As expected, gross margins improved on both a year-over-year basis as well as sequentially to 36.8%, near the high end of our target range. This was driven by product margin improvement and more favorable manufacturing absorption. On a non-GAAP basis, SG&A increased approximately $16 million or 14% in the first quarter compared to the prior year. This increase was primarily due to acquisitions and the impact of foreign currency. Excluding these items, organic SG&A was approximately 6% higher in the first quarter, mainly due to higher incentive compensation and accelerated depreciation related to our corporate headquarters and lab consolidation in the Philadelphia area. We delivered $73 million of adjusted EBITDA in the first quarter, while adjusted EBITDA margin of 15.1% declined year-over-year due to higher SG&A costs. Switching now to our segment results. Our Asia Pacific segment continues to be a growth engine with organic net sales increasing in 10 of our 11 last quarters and new business wins far exceeding the high end of our total company target range. Asia Pacific sales in the first quarter increased 25% year-over-year as the impact of our acquisition of Dipsol complemented organic volume growth of 10% and a favorable foreign currency impact of 3%. These drivers were partially offset by unfavorable price and mix, which declined 2% in the quarter. Segment earnings in Asia Pacific increased approximately $8 million or 32% in the first quarter compared to the prior year. This was driven by higher top line growth as well as improved product margins and more favorable manufacturing absorption. First quarter net sales in EMEA increased 10% year-over-year, partially due to favorable foreign currency impacts. Higher net sales from organic volume growth and the impact of acquisitions were offset by lower selling price and product mix. Segment earnings in EMEA increased approximately $2 million or 9% in the first quarter compared to the prior year. First quarter net sales in the Americas were in line with the prior year as favorable impacts from our acquisitions and foreign currency were offset by lower organic sales volumes and selling price and product mix. Lower volumes were attributable to a continued customer outage, regional tariff uncertainty and weather impacts early in the quarter, while lower selling prices were primarily the result of our index contracts as raw material costs declined in the quarter compared to the prior year. Segment earnings in the Americas decreased approximately $5 million or 8% in the first quarter compared to the prior year. This was driven by higher SG&A related to selling expense and incentive compensation as well as unfavorable product mix that negatively impacted margins. Turning to nonoperating costs. Our interest expense was $10 million in the first quarter, which was consistent with the prior year and the past few quarters. Our cost of debt remained approximately 5% in the quarter. Our effective tax rate, excluding noncore and nonrecurring items, was approximately 28% in the first quarter, which is slightly lower than the prior year and in line with our expectations for the full year effective tax rate in the range of 28% to 29%. And in the first quarter, our GAAP diluted earnings per share were $1.13 and our non-GAAP diluted earnings per share were $1.63, a 3% increase over the prior year due to improved operating performance. Cash generated from operations was $4 million in the first quarter, increasing from a use of cash of $3 million in the prior year. The first quarter is typically our lowest from a cash generation perspective due to incentive compensation payments, working capital investments and the seasonality of our business. The improvement over the prior year was primarily the result of better operating performance and lower cash restructuring costs, which totaled $4 million in the first quarter. Capital expenditures in the first quarter were approximately $11 million, primarily related to the construction of our new facility in China. We anticipate capital expenditures to increase in the remaining quarters as we complete construction in China and finalize the build-out of our new corporate headquarters in Pennsylvania. We still expect full year 2026 capital expenditures to be approximately 2.5% to 3.5% of sales. During the first quarter, we paid approximately $9 million in dividends. We remain focused on our capital allocation priorities and balancing investments for growth with returning cash to shareholders, and we'll continue to weigh opportunistic share repurchases in a prudent manner that optimizes shareholder value. In April, we announced that we entered into an amended credit agreement in which we extended our nearest debt maturity by almost 4 years from June 2027 to April 2031, while also increasing our revolving credit facility availability by approximately $300 million and improving our overall credit terms. The amended agreement also provides us with the right to increase the revolving credit facility by approximately $331 million for additional liquidity. The improvement in our credit terms and increased availability under this new agreement reflects the strength of our balance sheet and are clear indicators of the underlying health of our business and the durability of our cash flows. The new agreement provides increased financial flexibility that will allow us to execute our strategy, achieve our capital allocation priorities and continue investing in growth. We delivered strong first quarter results, continuing to gain share and driving organic volume growth despite ongoing macroeconomic and geopolitical challenges. With a strengthened balance sheet and increased financial flexibility, we are well positioned to continue executing our strategy and creating value for shareholders. With that, I will turn it back over to Joe.
Thank you, Tom. We are executing a clear set of priorities to strengthen the business, simplifying how we operate, enhancing our capabilities and putting the right cost structure in place to support sustainable growth. With that, we would be happy to answer your questions.
Our first question comes from the line of Mike Harrison with Seaport Research Partners.
2. Question Answer
I wanted to start with just kind of the raw material picture. I think you did a good job kind of articulating the expectation of 200 or 300 basis points of margin pressure next quarter. But maybe just give us some details on what you guys are seeing in terms of raw material costs. I assume that the biggest pressure you're seeing is in crude-based materials, but maybe comment also on what you're seeing. I know we're just getting past an oleo chemical spike, and I think some of those materials also continue to be kind of volatile. And also, if you can cover whether you're having any issues with raw material availability in any parts of the world.
Yes. Thanks, Mike. Good question. So talking about the general situation. If you think about our raw materials, there's really 3 buckets, right? It's base oils, it's additives and then it's oleochemicals. And right now, as is typical in an inflationary environment like this, everything sort of keys off of what's happening with crude oil, right? And so all 3 of those buckets are higher. In the sort of when hostilities broke out, as I mentioned just a few minutes ago, we put a task force together that day, right, that Saturday, we started looking at what impacts this is going to have on supply, first of all. and then also cost. And I think from a supply standpoint, to your last part of your question, we've been very fortunate to not have any issues. I think the flexibility of our supply chain, the fact that we have this local-for-local approach and really as one of the leaders in the space, I think our relationships and our ability to get product around the world is very good. Overall trend in those 3 buckets or raw materials in general, what we had thought sort of the increase was going to be toward the end of Q1, I would say in the recent weeks, that has gone up more. So we put an increase out at the end of Q1. Some of that became effective in April, more will become effective here in May. And we've already started on another round of price increases just because the cycle is pretty inflationary right now. Will that go further? I personally have my own thoughts on that. I don't believe so. But it all depends. If it does, I think as we did in the past, we have pretty good ability to go out and get pricing, but there is this lag. And so our view of is, as I said, we think it's going to be somewhere between 200 basis points, maybe a little bit more than that. We have index agreements as well. And those index agreements tend to adjust on a quarterly basis. So that's why there's that lag. It's just not something that we can go out and press a button and do immediately.
All right. Very helpful. And then I wanted to ask about the new transformation program that you guys announced in the press release and in your prepared remarks. Kind of what was the genesis of this program? And maybe just give a little bit more detail on what kind of actions you're taking that are beyond what you got -- the actions that you've announced with previous cost programs that are, I believe, still in mid-flight.
Yes. We've sunset or I mean I guess there's a few lingering things with prior cost programs. But this is a new program. And the genesis of the program really is, I believe our EBITDA margins need to be above 18% and pushing 20% eventually. And we're in the sort of mid-teens space right now.
And I've been in the role now for about 18 months. And I think visibility overall to how the company is operating, some things that kind of jump out to me are spans and layers. We had maybe added some layers of management that weren't there before. One of my philosophies was to bring the decision-making closer to the customer.
I really would like to have our culture be one of working managers or hands-on working managers. So -- so just some general like bringing clarity to the org structure and looking at areas where there's redundancy, maybe there's a little bit of load. We've addressed that and are addressing that. I mean this is also about Mike, there's tremendous complexity still lingering from when Quaker and Houghton came together in 2019. That was a huge transformational deal. And while we've integrated very well, we've had great customer retention, and we're able to aspire our customers, I think -- there's also the reality that our master data is a little messy that creates a lot of inefficiency, that creates a lot of manual work.
We looked at our business processes and just certain things like how we process intercompany charges amongst ourselves and how many times our customer service people have to touch an order before it gets to the customer; it's really inefficient. And so the key thrust of this is around business process optimization and making sure that we have a Quaker Houghton way of doing things, tied very closely to that is our master data.
And we have a very good line of sight to where that's going. And actually think that there's efficiency that's at the end of that process that will -- we can start to leverage things like AI and shared services type program. to make the business more competitive. This is not a reaction to what's happening in the Middle East. This is something that I feel we need to do. It's the right thing to do for the business. We've got to be more efficient. We got to have a more modern employee and customer experience.
And it's time to kind of bring the company forward and so we can really start to take advantage of a more modern set of tools.
That makes sense. And then I guess last question for now is just -- as always, I'm trying to get a little bit of a sharper view on how you guys are thinking about EBITDA for the next quarter? You mentioned the gross margin pressure. Typically, you guys would see some seasonal improvement in EBITDA, but it sounds like maybe that could be completely offset by gross margin pressure.
So is it fair to say we're probably looking at an EBITDA number in the second quarter that's pretty similar to what you guys just reported in Q1?
Mike, I think that's fair. I do think the volume aspect of this surprisingly, in the market that we're in, you would think as volatile as it is, our volume is very strong. So I feel -- I do feel confident that second quarter volumes will sequentially improve, that even where I sit today, I would expect year-over-year improvement. There's visibility to our order book. There's visibility to business that we've won and sort of the wrap effect of that, what's in the pipeline.
I mean we have a couple of parts of our business where we're actually adding labor to boost up some of our off shifts to keep up with demand. So the demand aspect of it is very good. And we're putting price in. That price will not all be in, in the second quarter, and there's another phase coming. But I do think from a volume perspective, we expect it to be better and seeing some of that normal seasonality that you see but there will be the slide of gross margin. And I think the math would say we're going to be within range, right, of where we landed in Q1.
Our next question comes from the line of Jonathan Tanwanteng with CJS Securities.
I was wondering if you could talk about the expanded credit agreement you did recently and your thoughts maybe on capital allocation from here. Did you update that? I know that it was becoming current, but the expanded size, did you do that to accommodate your expected operational organic growth? Or did you see more of an opportunity maybe to do share repurchases or M&A here? Maybe just give us a little more color on the opportunities that you see going forward and how you're addressing that? .
Yes. John, this is Tom. I'll share some thoughts on that. I would say, first and foremost, the update to the credit agreement was really about an opportunity to extend maturities, right? So we were going current here in June of this year with maturity of our existing facility in June of 2027.
So this gave us an opportunity to extend that out to April of 2031 and add some additional years with respect to the facility. It does add additional capacity for us to really continue to be flexible and use all the available tools from a capital allocation standpoint. We continue to be focused on investing in growth, both from an inorganic standpoint as well as organic growth, things like our new plant in China. And then I think, as I said in my prepared remarks, we continue to weigh how we deploy capital for growth as well as return capital to shareholders through opportunistic share buybacks and continue to pay dividends and those sorts of things. And so I think it's a combination of extending our maturities, some additional capacity, which gives us more flexibility from a capital allocation standpoint. We also improved terms as part of this refinancing of the facility and we have a great and supportive bank group that enabled us to accomplish those things in terms of the maturity and the additional capacity in the improved terms.
Got it. And maybe just to be a little more focused here, do you see opportunity just given the market volatility, whether it's in your own shares or in potentially acquiring tuck-ins or larger players? .
Yes. I'd say, John, yes to both, right? I think we have done -- it's been a couple of quarters since we've done anything meaningful on share repurchase. But we're not going try to do that. Balance sheet is in a good position. So if the opportunity presents itself, we expect we will do that. I would also say that the M&A pipeline as always, remains active. There are a number of sort of bolt-on tuck-in type of opportunities out there that we think will give us more things in the portfolio that we could sell to our existing customers and those types of deals have been very accretive for the company in the past.
And part of our strategy -- it will be part of our strategy going forward. So I would say yes to both questions. And we're really happy we got the financing on it. When we got it done and that the terms and additional flexibility that came with it.
Our next question comes from the line of Laurence Alexander with Jefferies.
It's Dan Rizzo on for Lawrence. A couple of things. As you aim for your 18% to 20% EBITDA margins, once I guess, some of this volatility may be kind of subsides and your restructuring is in place, how should we think about incremental margins kind of in the mid-cycle? I mean it's obviously increasing. I was wondering how we should kind of -- how we could quantify it.
Yes. Dan, it's Tom. Thanks for the question. I think as we're thinking about driving towards that 18% plus EBITDA margin. I think our assumptions relative to our targeted gross margin range remain consistent in that 36% to 37%. I think what you heard us talk about in our prepared remarks and some of Joe's comments is really around this opportunity from a transformational and restructuring program to focus on cost and complexity reduction with respect to our G&A functions, our manufacturing and sledging network. And so as we look out over the next couple of years, where we see some leverage is really as we think about SG&A as a percent of sales, those G&A functions and driving some of that cost and complexity out of the business.
And that's really the pathway towards that 18% as well as volume growth and continuing to work around net share gains and some of the things that we've been able to successfully execute.
I'm sorry, did you mention that I not hear what the cash cost of the plan is, the new plan?
No, we didn't mention anything specific about the cash cost of the plan. I think the -- what I said was we will pace this out over time. So for instance, we're not planning to put a big new ERP system in, right? So it's not going to be a huge outlay. I think what's typical here is 1 to 1.5x to achieve the types of synergies that we're looking at. So we're not planning any sort of extraordinary type of investment to get there, Dan. Hopefully, that answers that question.
No, that does. That's helpful. And then my final question. So you guys have done a good job, obviously always of increasing market share. But you have a lot of new products from Houghton and Dipsol. I was wondering how much of your share growth is increased sales to existing customers versus going into like kind of different customers? And how that kind of breaks out?
It's a really great question, Dan. -- it's much easier to go in and what we say is grab a share of the wallet versus opening up a new door with someone that you don't have a relationship with. So proportionately, most of the gains that we're getting are coming from share gain within existing customers, growing that share of wallet, right? It's the customer who may be buying a lubricant from us that we could sell them, grease, specialty grease, fire resistant hydraulic, finishing -- metal finishing type of chemical.
So it's really the majority -- high majority is coming from that growing with existing customers, new parts of the portfolio.
That's very helpful.
Our next question comes from the line of Arun Viswanathan with RBC Capital Markets.
Yes, sorry about that. I hope you guys are well. Congrats on the quarter. I guess, I understand the couple of hundred basis points of gross margin compression, maybe that you're expecting for Q2 because of the lag in pricing for us. I would have 2 questions. So first off, do you expect to fully recover that in the second half, which -- and does that imply that you have to actually price above inflation? And then secondly, I know you guys were successful in recouping inflation in the last inflationary cycle in '22, '23, and you were able to price seemingly above inflationary levels. .
But is the demand picture now maybe slightly choppier or less robust and would make that a little bit more difficult or take longer to recoup those margins? Or how should we think about that?
Yes. No, good question, Arun. Thanks for those. I would say, the goal overall is we have these target gross margin ranges. I've talked about the 18% EBITDA, and we're pretty committed to that, right? So that would imply in this type of environment that you've got to stay ahead of inflation a little bit. That being said, we volume to make sure we retain and we don't have a lot of churn and we can continue to stack the wins and the growth that we're seeing going forward is also part of it. About 1/4 of our pricing is on index. So it takes away a lot of the emotional aspects of this. Our customers, I think, understand the situation that we're in right now. And we've also said, look, if things recess.
In the cost side, we will act accordingly. And we're not trying to gorse them in any way, we're trying to be very responsible about it, as I said previously. The demand environment right now, surprisingly, is very strong. And will that change? It's possible it will in any type of inflationary environment like that, it could happen but through, say, the first 4 months of the year and visibility to where we are with our demand currently, we're not seeing that. We think will be okay. And then the margin question specifically, we do think by the end of the year that we would get back into the 36% to 37% range. And that's our goal.
Okay. Great. And then I guess a follow-up, maybe I can just ask about the volumes. You said that the volume environment is -- the demand environment is quite strong. Maybe you can just kind of describe that a little bit more in detail because is it steel utilization rates are really holding up and aluminum maybe as well, automotive? Maybe you can just touch on some of the end markets. And also regionally, it seems like, obviously, Asia Pacific has remained relatively strong, and you're benefiting from some wins.
But North America and Europe, are you also seeing some improvement? Or how should we think about that?
Yes. No. Look, I think the main takeaway here is we're really punching above our weight. And let's focus on Asia because -- the results are very, very strong, double-digit volume growth. I mean, that's against a backdrop of industrial production actually declined in China in the first quarter and we've seen light vehicle builds really in all regions down between 2% and 4%.
So we are outperforming the markets that we're in. We've seen some improvement on the metal side, steel and aluminum production, that can, at times, be a precursor that automotive is going to swing back, right? -- end of Q1, I think, as I mentioned, North America seemed to pick up and little bit in North America will drive our Americas segment? And then typically, as you head out of Q1 in areas like Asia, you put the Lunar holiday behind you and you get into normal seasonality patterns. And I think they had a tough first part of the year, China especially, but areas outside of China; India, Vietnam, Thailand, actually, they had pretty good performance.
And so that offsets a little bit what's happening in China. So all in all, like as we head into the second quarter, as I said, I think this sort of normal seasonality returns. That's what it feels like right now. And then us taking share, consistently taking share above market, we would expect that would continue into the year.
Our next question comes from the line of David Silver with Freedom Capital Markets.
Yes. Good morning. Thank you. a couple of questions. I have a couple of questions. First one, tactical, second one, maybe a little bit longer term. But on the tactical one, and I apologize in advance that this sounds very naive. But I'm leaning on your long experience on the commercial side, Joe. And I'm sure that your company has a very detailed playbook for operating in conditions such as the one we're facing now with volatile feedstock cost pressures.
And I'm just kind of scratching my head and I'm saying, why not a surcharge, I guess? In other words, something that can be pegged to something clearly visible to both sides. It might halt some of that 200 to 300 basis point erosion on the way up and the customer gets the assurance that when the relevant cost pressure abates that the pricing that persisted before this will quickly return. But I'm sure your company has a long playbook. Maybe if you could just share some of your thinking about how quicker typically goes about recouping cost pressures in fast-moving markets, such as the one here.
Yes. No, good question. So we do use surcharges. That is something that we do -- and really, you're able to put some of that in immediately, especially when it comes to things like freight. Other parts of the business, I mean, we have to go in and really show the data to the customer. just as our suppliers come to us, we push back and say, well, why is this going up? And I'm going to shop it around and that happens when we talk to our customers as well. So I think the nature of how we in our relationship. We're not a commodity, right? We are really kind of embedded in these plants. We're sitting in the morning meeting. We are part of the really -- become part of their operations in some cases.
So we have to bring the data. We have to give them justification. And a lot of times, we have to give them options about what we're going to do about it, right? Can we do something to offset it in other ways through service or bundling a product. So it's a laborious process, but it's also very, very necessary. I think if you're going to have long-term trusting relationships with your customers, that's really the only way we can kind of approach it. We would love to be able to be more efficient and quicker with these things, but it's extremely volatile. And then you run into these situations where every Friday, something changes, right, and have to kind of adjust to that as well. But I think over the long term, David, our goal is to get back to this target range gross margin. That's something that we've always done and have also been pretty open about the fact that it does take us a quarter or two lag to catch up.
Okay. Great. I have a longer-term question or a question about a longer-term topic. But one of the trends that's going to become increasingly apparent, I guess, over the next couple of years, we'll be reassuring and onshoring of heavy industry here. So with your global footprint, I'm guessing that Quaker has about as good a view on automakers and primary metals activities that might be showing up in the U.S. from some offshore companies. And I was just wondering, does Quaker have a playbook currently to maybe capture a little more than your share of this new investment coming to, let's say, the United States. Is there a process?
Do you have to qualify 12 or 18 months in advance? Just -- what is the playbook that Quaker is developing to maybe take full advantage of the coming wave of large investments in automotive and other kind of heavy industry assets here?
Yes, great question. We do have a playbook. And I think that playbook is pretty consistent regardless of what region new capacity is coming online. Look, we are seen as the industry leader. We participate in industry technical groups and forums. And when -- and we maintain relationship with the mill builders in the equipment suppliers. And so when a new installation comes on and you rightly point out that there's a lot of investment in North America right now.
We generally know about it in the early phases. We try to be involved on the front end in the design of those systems and more often than not when new capacity comes online, we're the incumbent supplier. So that is something that is part of our playbook. How do we make sure that, that's a valuable approach for our customers. We have our own CNC machines. We have a pilot rolling mill in the company, and we can really do some things on the front end to test and ensure that we're going to have success when they start these mills up and that's something that's really important.
I think the other aspect of this is there's been a shift, right? I mean if you look at metal production in China, I think more steel is made there than the rest of the world combined. And when you look at the trends just in the past few years, automotive production in China is starting to really take off. And you're seeing the Chinese brands be more prominent in Africa and Southeast Asia and even in Europe and not so much here yet, but -- but we've always said we're kind of agnostic of where it gets me. And I think just my point is, as that part of the business grows, I think we're very pleased with our ability to kind of grow in a differential way right now in that part of the world. That's something that's been very intentional.
Okay. Great. I appreciate all the color.
Our next question comes from the line of Jon Tanwanteng with CJS Securities.
I apologize if you already addressed this, but I was wondering if you could talk about the potential for demand destruction or disruption at your customers and what you planned for in your scenario analysis as you consider what would happen if you run or the mid compute was extended. Have you talked to your customers about them? And what contingencies might be and what your earnings profile and the revenue profile might look like if that would happen? .
Yes, John. I mean, look, we talk to our customers every day about that. We're watching that as closely as we can. I think it's a tough thing to predict. I would say right now, there's an equal chance that this thing is prolonged or not prolonged. There's -- I would also say there's an equal chance that there is going to have some impact on demand that could be very, very disruptive or it's going to have no impact, right? And so when we talk about our sort of our model and how we're looking at the year, I'm basing it upon what the most -- the information I have today, which is, as we head into -- we're now well into the second quarter, visibility on what we have, I'm not seeing that sort of catastrophic demand disruption on the horizon. We're not hearing that from our customers, so we're not expecting it at this point.
Is it possible it happens? Absolutely. The longer this thing goes on, and the higher inflation goes, it's not necessarily good for anyone's business, right, if that continues. But I think we can't necessarily bake that scenario in although, as I said earlier, there's probably an equally likely chance that happens or it doesn't happen right now. So based upon that, our outlook is kind of like with all the information we have today, the best thing we know and looking at all the empirical evidence we have, we're not seeing that yet. So we didn't bake that into our guide.
And we have -- there are no further questions at this time. I would like to turn the floor back over to Joe Berquist for closing comments.
Thank you. Yes, we, again, really appreciate the interest in Quaker Houghton. I want to thank all of our employees for what they continue to do in these really volatile times and especially our employees that were impacted in this -- the region close to the conflict and the amazing work that they've done to keep our customers supplied.
So -- appreciate the questions. If there's any follow-up, don't hesitate to reach out to John Dalhoff, and we'll be happy to answer any additional questions you have. Thanks.
Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Quaker Chemical Corporation — Q1 2026 Earnings Call
Quaker Chemical Corporation — Q4 2025 Earnings Call
1. Management Discussion
Greetings. Welcome to Quaker Houghton's Fourth Quarter 2025 Results Conference Call. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to John Dalhoff, Investor Relations. Thank you, Mr. Dalhoff, you may begin.
Thank you. Good morning, and welcome to Quaker Houghton's Fourth Quarter and Full Year 2025 Earnings Conference Call. Joining us on the call today are Joe Berquist, our President and Chief Executive Officer; Tom Coler, our Executive Vice President and Chief Financial Officer; and Robert Traub, our General Counsel. Our comments relate to the financial information released after the close of the U.S. markets yesterday, February 23, 2026. Our press release and accompanying slides can be found on our Investor Relations website. Both the prepared commentary and the discussion during this call may contain forward-looking statements, reflecting the company's current view of future events and their potential effect on Quaker Houghton's operating and financial performance. .
These statements involve uncertainties and risks, which may cause actual results to differ. The company is under no obligation to provide subsequent updates to these forward-looking statements. This presentation also contains certain non-GAAP financial measures, and the company has provided reconciliations to the most directly comparable GAAP financial measures in the appendix of the presentation materials, which are available on our website. For additional information, please refer to our filings with the SEC. Now it's my pleasure to hand the call over to Joe.
Thank you, John, and good morning, everyone. I am pleased with our fourth quarter results, which resulted in our second consecutive quarter of year-over-year EBITDA improvement. Adjusted EBITDA was up 11% and adjusted earnings per share increased 24% compared to the prior year. Our results were driven by new business wins in all regions highlighted by strong organic volume growth in the Asia Pacific region, where our planned strategic efforts continue to deliver consistently strong results. For the full year, net sales in Asia Pacific grew 13% and while organic volume grew 5% despite persistent soft market conditions, demonstrating how our go-to-market approach and expansion of capabilities in the region are driving growth. Market conditions in the Americas and EMEA remain soft as uncertainty from tariffs and extended customer outage in North America and seasonal impacts affected us in the fourth quarter.
Despite the challenging environment, our total organic volume was down less than 1% versus the prior year, but would have been flat if not for some operational challenges that occurred in our U.S. plants in December. -- net share gains of approximately 4% mitigated the soft market and collective headwinds we experienced in the quarter, and we achieved slight organic volume growth for the full year. Gross profit increased by 6% compared to the prior year quarter. Gross margin percentage was flat with some variation in regional mix. Our EMEA region gross margins improved by 280 basis points due to favorable price/mix and lower raw material costs. And Asia Pacific had margin growth on an organic basis. This favorability was offset by negative impacts from absorption along with higher maintenance, repairs and raw material disposal costs in North America.
Sequentially, gross margins were down 150 basis points compared to the third quarter but our product margins remained steady globally. Raw material costs stabilized in the latter part of the year, and we are able to successfully implement targeted price increases in parts of Asia Pacific in the fourth quarter. The company generated $47 million in operating cash flow in the fourth quarter, down from $63 million in the prior year period due to higher restructuring costs and negative impacts to working capital. For the full year, we generated $136 million in operating cash flow compared to $205 million in 2024.
In addition to higher year-over-year restructuring charges of $29 million, the company made temporary increases to inventory in the EMEA segment in the fourth quarter. As we begin to execute network optimization actions in Europe. We recently announced the closure of our German manufacturing facility in Dorman as part of a broader set of network initiatives. The volume from the Dorman plant will be absorbed into existing excess capacity in our European network. We anticipate cost savings of approximately $2 million from this action in 2026 with annual ongoing cost savings of approximately $5 million beginning in 2027. The company also booked approximately $7 million of costs related to the assessment of multiple acquisition opportunities in the latter part of the year. We do not anticipate that the acquisition-related work will result in specific transactions at this time.
Focusing on the quarter, our performance was in line with expectations despite a persistently challenging economic environment. Year-over-year organic volumes fell less than 1% but outpaced our major end markets, which declined by a low to mid-single-digit percentage. Persistent tariff uncertainty continues to disrupt global trade flows and negatively influence our customers' operations. Net share gains, disciplined cost measures and a positive contribution from recent acquisitions helped offset market weakness. Our acquisition of Dipsol completed in the second quarter, continues to perform as expected, contributing $21 million to net sales in the fourth quarter. Organic sales volumes in Asia Pacific grew 4% in the quarter. This was the tenth consecutive quarter of year-over-year volume growth in that region.
Asia Pacific growth offset organic volume decline in EMEA and the Americas, which was driven by overall market softness and an extended customer outage in North America. Lingering demand from tariffs were compounded by weather -- lingering demand impacts from tariffs were compounded by weather-related operational challenges in December. We believe total company organic sales volumes would have been flat to the prior year in Q4 when adjusting for these factors. The company continues to execute cost savings initiatives which led to a 4% year-over-year decline in organic SG&A at constant currency. Total SG&A costs increased 4%, primarily due to the impact of acquisitions and foreign exchange.
Our previously announced complexity and cost reduction plan generated approximately $25 million of run rate savings for the full year. We will continue to evaluate additional cost savings opportunities and execute in a prudent and disciplined manner towards continuously improving our EBITDA margins over the long term. We made progress reducing complexity and transforming our cost structure in 2025. But there is more work to be done. We have identified specific new initiatives that will streamline and harmonize our global business processes, enhance and further rationalize our global manufacturing network and finish immigration of past acquisitions. These foundational steps are already enabling better efficiency and more effective cross-selling across the portfolio.
As we continue to sharpen and refresh our core portfolio of products and services, we have also begun to consolidate and strengthen our product brands across the organization. Our balance sheet is strong, gives us flexibility to continue to evaluate acquisitions that could expand our offering, increase our total addressable market, enhance innovation, add new capabilities and provide access to new customers and geographies. We completed 3 acquisitions in 2025, adding approximately $95 million of annualized revenue. We will continue to evaluate strategic acquisitions in a disciplined manner as M&A remains a core tenet of our capital allocation strategy that prioritizes investments for growth.
Quaker Houghton continues to demonstrate operating resilience. Since 2020, we have weathered the COVID-19 pandemic, a global supply chain crisis, uncertainty due to tariffs and ongoing geopolitical instability. Our markets have not returned to pre-COVID operating levels, yet we have delivered profitable growth and are well positioned to sustain that momentum. As our underlying markets stabilize and improve, we will accelerate future growth by unlocking the leverage and strength that is inherent in our company. The cost actions we have taken over the past few years have positioned the company to strategically invest in our global team of technical experts, driving innovation and new capabilities. Quaker Houghton is poised to build upon our well-known reputation of differentiated customer service as we continue to evolve into an even more responsive, nimble and efficient company.
We are excited about the strong momentum we have created in Asia Pacific where our intentional focus on high-growth markets and key market segments is paying off. Notably, we are winning with new metalworking customers and growing our share in the electric vehicle OEM and component sector. We have taken steps to proportionately scale our organization to achieve sustainable growth in Asia Pacific. It will open a new manufacturing facility in China later this year. Our investments in emerging markets like China, India, Asia and Africa demonstrates our commitment to serving customers locally while delivering the full capabilities we have built as a leading process fluid and service provider to industrial manufacturing companies in the world.
I am optimistic as we head into 2026 and excited about our momentum. In the past year, we have made substantial progress strengthening and stabilizing our customer intimate sales and service capabilities. Our service-intensive approach is clearly working. Our sales growth was bolstered by innovative progress achieved in the development of our fluid intelligence capabilities. Food intelligence is an evolution and enhancement of Quaker Houghton's service offering, empowered by new and innovative measurement, automation and digital tools. Our Fluid Intelligence offering is amplifying the impact of our technical teams and enabling customers to gain insights to optimize how our fluids perform.
Looking forward, our external markets are not expected to improve in the near future. We anticipate underlying markets to remain flat in 2026 and with the potential for some incremental growth in the second half of the year. We remain confident in our ability to deliver net share gains within our target range of 2% to 4% as we execute our sales pipeline, benefit from the ramp of new business wins gained in 2025 and gained the full year impact of acquisitions, primarily dips in our results. Our visibility into the sales pipeline in our recent history give us confidence that we will continue to win new business at rates that exceed underlying market growth. Our business foundation remains strong as we move into 2026. We do not expect operational issues that occurred in the fourth quarter in North America to carry into the first quarter.
Raw material costs are expected to remain steady in the first part of the year, and we anticipate gross margin percentage will be within our targeted range of 36% to 37% for the full year. We will deliver positive share gains and organic growth in all our segments in 2026. On the cost side, variable compensation and inflation will result in higher SG&A year-over-year. We plan to partially offset this by continuing to execute transformational initiatives and making improvements to our cost structure to support our long-term goal of sustaining EBITDA margins above 18%. This journey has begun already, and we expect modest investment and careful planning will be required to fully reach our profitability margin target in the next few years.
We anticipate our third consecutive quarter of year-over-year EBITDA improvement in the first quarter of 2026, which will come from share gains, gross margin improvement and run rate impact of acquisitions. For the full year, we expect to improve top line performance, leading to year-over-year adjusted EBITDA growth. I am proud of what we have accomplished and grateful for the contributions are approximately 4,700 global employees delivered to our customers and quicker outs many stakeholders. Our people remain our greatest asset, and their unwavering commitment to serving our customers continues to drive our success.
Even in challenging economic times, we stay grounded in our core values, and demonstrate our dedication to the communities in which we operate. Reflected in recognition we received being named one of America's most responsible companies in 2025. We will continue to move forward together and are committed to driving growth and long-term value for our customers and shareholders. With that, I would like to pass it to Tom to discuss the financials in more detail.
Thank you, Joe, and good morning, everyone. Fourth quarter net sales were $468 million, a 6% increase from the prior year. Organic volumes declined less than 1%, but were boosted by share gains across all regions. In the fourth quarter, total company share gains were approximately 4%. Acquisitions contributed an additional 6% to sales primarily related to Dipsol. Selling price and product mix were 1% lower than the prior year, consisting of impacts from both product, service and geographic mix as well as pricing, largely associated with indexes. Gross profit dollars increased year-over-year on a non-GAAP basis, while gross margin was 35.3% compared to 35.2% in the first quarter -- in the fourth quarter of 2024.
Product margins in the fourth quarter remained healthy in all geographies and increased year-over-year in both EMEA and Asia Pacific. Q4 2025 gross margin was impacted by seasonality and unfavorable manufacturing absorption as well as higher maintenance, repairs and raw material disposal costs in North America. On a non-GAAP basis, SG&A increased approximately $4 million or 4% in the fourth quarter compared to the prior year, mainly due to acquisitions and the impact of foreign currency. Excluding these items, organic SG&A was approximately 4% lower in the fourth quarter and 2% lower for the full year in 2025 as we effectively executed on our cost savings and optimization plan. We delivered $72 million of adjusted EBITDA in the fourth quarter, an increase of 11% compared to the prior year.
Adjusted EBITDA margin of 15.3%, improved 75 basis points year-over-year but was lower than the prior quarters due to adverse impacts on gross margin in North America in Q4 of 2025. Switching now to our segment results. We continue to see strong positive momentum in our Asia Pacific segment, which delivered its 10th consecutive quarter of organic volume growth and has now experienced organic net sales growth in 9 of the last 10 quarters. New business wins continue to be the primary catalyst for this growth. Asia Pacific sales in the fourth quarter increased 15% year-over-year as the impact of our acquisition of Dipsol complemented organic volume growth of 4%, partially offset by unfavorable price and mix.
For the full year, sales increased 13% as the impact of our acquisition and a 5% increase in organic sales volume offset unfavorable price and mix. Segment earnings in Asia Pacific increased approximately $3 million or 11% in the fourth quarter compared to the prior year. This was driven by higher net sales, partially offset by lower operating margin due to unfavorable impacts from product mix and service revenue. Fourth quarter net sales in the EMEA segment increased 7% year-over-year despite continued market softness due to an increase in sales from our acquisitions, favorable selling price and product mix and favorable foreign currency impacts. These items were partially offset by a 2% decline in organic sales volumes, which outpaced underlying market declines due to net share gains.
Segment earnings in EMEA increased approximately $3 million or 17% in the fourth quarter compared to the prior year. This was the result of higher net sales and improved operating margin due to favorable pricing and product mix and lower raw material costs. Fourth quarter net sales in the Americas segment were flat to the prior year as an increase in sales from acquisitions and favorable impact from foreign currency were offset by lower organic sales volumes. Net share gains in the region during the quarter were offset by overall market softness and specific factors, including the outage at a major North American metal producer impacts from tariffs on demand and several operational disruptions that delayed shipments in Q4.
Segment earnings in the Americas were flat in the fourth quarter compared to the prior year as slightly lower sales volumes were offset by higher operating margin. Turning to nonoperating costs. Our interest expense was $11 million in the fourth quarter, which was consistent with the prior quarter. Our cost of debt remained approximately 5% in the quarter. Our effective tax rate, excluding nonrecurring and noncore items, was approximately 25% in the fourth quarter of 2025 while our full year effective tax rate was in line with expectations at approximately 28%. The Q4 effective tax rate was lower than the full year rate due to the timing of certain tax incentives related to our operations in China.
In the fourth quarter, our GAAP diluted earnings per share were $1.18, and our non-GAAP diluted earnings per share were $1.65, a 24% increase year-over-year. For the full year, we had a GAAP diluted loss per share of $0.14, which included an $89 million noncash goodwill impairment charge and $35 million of restructuring charges related to our cost savings program. Adjusting for these and other non-GAAP items, our full year non-GAAP diluted earnings per share were $7.02. Cash generated from operations was $47 million in the fourth quarter and $136 million for the full year compared to $205 million for the full year in 2024.
The primary drivers of lower cash generation compared to the prior year are higher net outflows from restructuring activities and an increase in working capital. The working capital increase was due to higher inventories related to operational issues in North America and the closure of our manufacturing facility in Dortman, Germany, along with the timing of supplier payments and accrued liabilities in Q4. Capital expenditures were approximately $22 million in the fourth quarter, consistent with the prior year and were $56 million for the full year. This represents an increase of approximately $14 million over the prior year, mainly due to the construction of our new facility in China, which is on track to begin operations in the second half of 2026.
Capital expenditures are once again expected to be between 2.5% and 3.5% of sales in 2026. This includes continued investment in organic growth initiatives, along with the completion of our China production facility and moving our corporate headquarters and combining our R&D labs in a new location in the Philadelphia area. During the fourth quarter, we paid approximately $9 million in dividends and repurchased approximately $5 million of shares. For the full year, we returned $76 million to shareholders through $42 million of share repurchases and $34 million of dividend payments, which reflects our 16th consecutive year of increasing our annual dividend payout. Our balance sheet and liquidity remains strong, our net debt at year-end was $691 million, and we continued to lower our net leverage ratio following the Dipsol acquisition, steadily reducing it to 2.3x our trailing 12 months adjusted EBITDA at the end of the year.
We had another strong year in 2025. Despite continuing macroeconomic and geopolitical challenges, we continue to gain share and slightly increase organic sales volumes while executing on our cost savings actions. The 3 acquisitions that we closed during the year complemented our business results and continue to perform in line with expectations. We remain disciplined with our capital allocation strategy, and we'll continue to return cash to shareholders and work towards reducing net leverage following last year's acquisitions. With that, I'll turn it back over to Joe.
Thank you, Tom. We made significant progress toward achieving our strategic objectives in 2025, and we look forward to growing revenues and adjusted EBITDA in 2026. With that, we'd be happy to take your questions.
[Operator Instructions] Our first question is from Mike Harrison with Seaport Research Partners.
2. Question Answer
Joe, you mentioned the weather-related operational issues that impacted Q4, and it sounds like they're now resolved. I'm curious, is there -- can you help quantify that for us? And I guess, looking out to Q1, I'm sure you guys have a bunch of snow right now in the Philadelphia area. And I'm just curious, is it possible that we have some additional weather-related impacts to keep in mind as we start thinking about what Q1 looks like. .
Yes. Thanks, Mike. Yes. In the fourth quarter, I think, particularly in December, we had some usual things that you see in plants, frozen pipes, issues with trucks and the like, a boiler, not to get too specific, but that if you think about the impact of that, did set us back a couple of days, I guess, in the month. And as we said in the comments earlier, you think overall, the impact of that was somewhere around 1% on our volume, and we would have been essentially flat. That's really been resolved as we head into the first quarter. Now we had this big snow event yesterday. Most of that was on the East Coast. And thankfully, our manufacturing is really in the center of the country in Ohio and Michigan, Illinois for the most part. So there is a ripple effect with these things as trucks and raw materials move around the country and it impacts our customers as well as us. But I don't expect that to be anything real impactful at this point, Mike.
All right. And then you mentioned that you, it sounds like during Q4, you were getting some pricing in Asia which is good because I know that price/mix number has been under some pressure. But I was curious if you could give us a sense of your expectations for pricing there and maybe also wrap in some commentary on what you're seeing in raw materials, I believe, some of these Oleochemicals that have been pressuring your margins back kind of in the middle of the year. seem to have started to come lower, but maybe just some thoughts on kind of price versus raw material cost dynamics into the next couple of quarters.
Sure, Mike. Yes, from a raw material standpoint, I mean, we're seeing things stabilize. Our outlook into Q1, Q2 at this point is relative stability. I think what you saw in the fourth quarter is timing of some of our contracts there. We had issues throughout the year last year in Asia Pacific particularly some of those issues just took a while to resolve because we had contracts and we had to negotiate new contracts in the fourth quarter and get some pricing. I am not really looking at pushing pricing right now. I think it's -- things have stabilized and overall should be a pretty flat market as far as that goes.
All right. And then I guess just in terms of your outlook and expecting EBITDA growth in 2026, it looks like the sell-side consensus right now is looking for something close to 10% growth over 2025. And -- and I'm just curious, is that what you're targeting internally? Or would you say that the market outlook at this point probably supports a lower growth rate of that type of percent that's baked into consensus?
Yes. I mean, we don't give specific guidance on that, but what I could tell you, Mike, is just kind of the algorithm that I think about the markets that we're in, are -- we're not expected to really grow. Like so underlying markets, I think, potentially could even be slightly down in the first half of the year, maybe slightly up in the second half of the year, but overall kind of flat. We have been very happy with how the share gain, the new business acquisition has gone over the past several quarters and feel pretty confident as we head into this year that we'll be able to continue that pace we mentioned in the comments earlier, our target there is sort of 2% to 4% outgrowth of the market, and we've been on the higher end of that. and I would expect that to continue with the visibility that I have to the pipeline and how things are looking on that end.
We made some acquisitions last year. Those really didn't come into play until the second quarter, so we will have an extra quarter of those in our numbers. And so call that a 1% to 2% kind of tailwind. We think there's perhaps a percent favorability overall with FX for the year, some puts and takes there, so some higher costs, but also some translation that helps us. I do expect our gross margins to be -- to recover to -- from the fourth quarter to be in that range of 36% to 37%. And then overall, I think we mentioned also there is a little bit of variable comp rebuild a little bit of inflation. We have some -- Tom mentioned in his comments, the new Radnor facility or the new facility here in Philadelphia. So some depreciation and things like that coming online. But overall, really the algorithm that we're shooting for is a sort of mid-single-digit volume and revenue growth if we could do a little bit better than that, great. and then get that leverage, as you said, to the high-single digits on EBITDA as we kind of scale everything into the business.
Our next question is from Laurence Alexander with Jefferies. .
Could you characterize the M&A pipeline and I guess also, can you give us some sense of the regional mix in the pipeline?
Yes, Lauren. I think we mentioned earlier that we had -- we did have some activity in the fourth quarter. Really, it was related to kind of second half of the year, multiple opportunities that we looked at -- those were not really regional opportunities, I would call them multiregional or global opportunities. They were larger and as I also mentioned, we don't anticipate any of those to lead to a transaction, nothing is imminent. The overall pipeline itself remains healthy. I would say, Laurence, there's always a balance for us. We look at things in kind of 2 different angles, right? Where we've had a good track record of doing these bolt-on type of transactions, things that add, help us grow our total addressable market, give us capabilities that we don't have, really expanding that wallet that we could sell to our customers transformational things. I think they come along few and far between. When they do come along, we like to participate.
Our balance sheet is strong. We have the ability to do those types of things, but we're also going to be very disciplined and not do something that doesn't make sense for our shareholders.
And just I guess on a regional basis, can you give a sense for -- are your share gains fairly evenly distributed? Or -- is it kind of more in one region? Is it tied to a particular customer end market mixes and customers with end markets or competitors of certain end market exposure? Just trying to get a sense for whether there's any kind of generational or limiting factor on the share gains that we should be aware of? .
I mean I'd say the share gains themselves have been pretty broad based. It's been all 3 regions, so Americas, EMEA and Asia Pac. The basis of it, Asia Pac is definitely higher than EMEA and Americas, I mean, call it on almost a 2x basis higher in Asia Pac versus those other regions. Some of that is just what's happening there, right? You have a lot of growth in markets like India, China is not growing the way it used to in the past, but it's still growing, right? And relative to the Americas and EMEA. That means new lines coming on, even new customers that didn't exist, and we make it an intentional part of our strategy to be the incumbent when these new plants come online. So that really speaks to some of the reasons why we're seeing higher conversion rates in Asia Pac than the other parts of the world. But overall, it's all 3 regions. And I think the sales engine is working pretty well for us right now.
Our next question is from David Begleiter with Deutsche Bank.
I mentioned you expect some markets to be maybe down slightly in the first half of the year. Which markets are those? Which markets could be up in the first half of the year?
Yes. I mean I think I would say the Americas and EMEA both were sluggish toward the end of the fourth quarter, and we've seen that carry into Q1. there may be some weather disruptions here in Q1 for Americas. I don't think that's going to be anything that's material. But we're just not seeing any kind of broad-based recovery in the manufacturing segment in Americas or EMEA right now, PMIs dipped below 50 and are hovering right around that number. So it's just there's not a lot happening, David, in those markets right now. And there's a normal seasonality that you have in Asia Pacific due to the Lunar holiday that happens in February. But on balance, I think when you put all that together, we think things are going to be relatively flat or if they are down to be very, very small incrementally down. The one area I would say is we have some specific customer issues in Americas that related to events that took place at their facilities last year. Those will probably carry into the second quarter as far as what we know right now.
So that's an additional sort of headwind, I think, on Americas. But again, if I had to put a magnitude around it, I think it's very low-single-digit type of headwind.
Got it. And I was going to ask on that Americas volume being down 4%. Can you parse out underlying growth -- underlying volumes in that business? And what that could be in Q1 and Q2 as well ex the customer outage?
Yes. Underlying growth for Americas, so the markets that we're in, the composite, I think we had it down about 1%. Metals market being up a couple of percent, but auto down. When we talk about the metals market, even though that metals market was up a couple of percent, there was the specific customer issue that then impacted us in North America. It's also a mix of the flat-rolled content versus construction, I beams, rebar, we tend to participate a lot more on the flat rolled side. So overall, down about 1% in the fourth quarter and a mix of different things there. The one other angle I would tell you, David, is just uncertainty around tariffs, I think, has impacted this USMCA region, Mexico, particularly with maybe a little bit lower demand down there just from the tariff impact.
And just to be clear, your Q1 -- our Q4 volumes in Americas would have been down roughly 1% ex the customer outage. Is that fair?
We think we have been flat, excluding the customer outage in North America. So there was organic share gain. Markets were down. We had organic share gains and then we had these operational issues as well as the specific customer out of. So all of that on balance, we think would have been flat.
Our next question is from John Tanwanteng with CJS Securities.
I just wanted to clarify, you mentioned that the M&A expenses for diligence and several opportunities that aren't expected to close any or result in anything anytime soon. Does that mean you're still too early in the process? Or did they trip up in diligence for one reason or another? And what is the outlook for your M&A this year following that?
Yes, I wouldn't -- so I'm not going to say anything more specific on that, John, other than we don't anticipate any of those costs carrying into Q1. And there is no imminent transaction, nothing imminent unfortunately.
Okay. Fair enough. And then I might have missed it if you called it out specifically. I think you just talked about the customer plant fire. But I was wondering if you could quantify the gross profit or the EBITDA impact associated with that, the disposal and the weather in the quarter if you kind of have a normalized kind of earnings or profitability number? .
I don't have that number. I think the impact on gross margin, I guess, or operating margin in the Americas was call it, a little over 1% on the gross margin percentage. The revenues, it's hard to quantify that, but it's less -- I'd say less than $10 million. somewhere between $5 million and $10 million in that range.
Okay. And that's for all 3 issues together.
Yes. Yes.
Our next question is from Arun Viswanathan with RBC Capital Markets.
I hope you guys are well. So I guess I just wanted to I understand the outlook for both Q1 and the full year. So I guess, for Q1, you mentioned for the first half, maybe you'd be flat to slightly down or you don't really see much change in the underlying markets? I guess you'll continue to see share gains and business wins in Asia Pacific, but would that be offset by weakness in the other regions or softness in the other regions? And then maybe could you see some improvement in growth in the second half. And so you would be up for the year? Or is the year-on-year growth mostly from the absence of maybe 5 to 10 onetimers. How should we think about the opportunity for growth in '26?
No, I'd say overall, like all 3 of our segments, so all 3 regions, we expect to have positive share gains year-over-year, right? So it's not just Asia Pacific. Asia Pacific share gains are coming in at a higher rate maybe than those other 2 regions. But we do expect to perform in that 2% to 4% range. And we've been on a pretty good clip on the higher end of those ranges in the past several quarters.
As you mentioned, not expecting much help from the markets, but if there was going to be underlying market growth that would happen in the second half as far as we could tell it at this point in time. We do have the benefit now of full year run rate of these acquisitions that we made last year. So that's a 1% to 2% kind of tailwind there. And there's been business that we won last year, right, that sort of snowball effect as that rolls into the new year. So we're targeting to grow our business this year, have organic volume growth year-over-year, have revenue growth year-over-year and have EBITDA growth year-over-year in all 3 of our segments. And just other than that, just it's not coming from the market. It's really coming from our sales development in the pipeline and continuing to execute in that area.
Yes. And Arun, this is Tom. I would just add that remember, we acquired Dipsol, that deal closed in April last year. So we do have the benefit of 1 additional quarter of acquisition from Dipsol here in Q1 of 2026.
Okay. And to clarify, what was the amount of nonrepeating items, I guess, in '25 that shouldn't be a drag for '26?
I don't think we specifically provided a number on that, Arun. I think what Joe had mentioned in his remarks is that we believe our volume in Q4 would have been roughly flat. Had it not been for the weather-related items in the customer outage.
Okay. And then could I just ask on margins as well? It looks like there were some -- again, maybe that was related to some of these extra costs. But I'm sure you're facing maybe some labor and benefits inflation, tariff uncertainty and so on. So from a margin perspective, I guess, would you still be on track at some point to get back to 18% EBITDA margins. I think you were down year-on-year in '25 versus '24, but do you expect margin growth in '26? And what would drive that? And do you need volume to, I guess, organic market-based volumes to improve in order to see that margin growth or other things that you can due to drive that?
Yes. Yes. Thanks, Arun. So what I would say specifically with respect to gross margin in Q4, I think which you mentioned is correct. There were some specific items that we had mentioned in our prepared remarks with respect to weather and some operational challenges that we had specifically in North America relative to production. I would say underlying that, our product margin remains healthy in all 3 regions. And so I would characterize some of the margin impact in Q4 of this year as operational in nature as we have transitioned even now through January here in 2026 we see that margin profile has recovered as some of those operational issues have been resolved. And then with respect to our longer-term goals around 18% EBITDA margin growth, I'll let Joe answer that. .
Yes. I mean that's -- it's definitely still the target, Arun. We referenced the plant closure of Dortman earlier. So that's something -- as an example, we're looking at our network around the world. This is particularly in Europe, we have excess capacity, and we have too many nodes in -- that's an example of where on the manufacturing cost side, there's an opportunity for improvement. It's not just in North America. We think that will come in play in other regions as well. there's a line of sight to specific cost initiatives, mostly in these functional support areas. We're working on things like fixing our master data, streamlining our business processes, and integrating these businesses that we've acquired over the past few years. So there's still opportunities there, I think, to look at combining R&D operations, combining sales offices, looking at combining even the sales organization and getting some benefits there.
So really, yes. I mean volume will help us get to 18%, but there's still some self-help, I think, in there that we think tangible actions that we could take that will make a meaningful movement in the next year or two.
There are no further questions at this time. I would like to turn the call back over to Joe for closing remarks.
Okay. Thank you. Thanks, everyone, for joining our call today. We appreciate your continued interest in Quaker Houghton. I want to sincerely thank all of our colleagues around the world for their hard work in 2025 and their commitment to success in 2026. Please reach out to John, if you have any additional follow-up questions. Thank you.
Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.
Quaker Chemical Corporation — Q4 2025 Earnings Call
Quaker Chemical Corporation — Q3 2025 Earnings Call
1. Management Discussion
Greetings. Welcome to the Quaker Houghton Third Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Jeffrey Schnell, Vice President of Investor Relations. Mr. Schnell, you may begin.
Thank you. Good morning, and welcome to Quaker Houghton's Third Quarter 2025 Earnings Conference Call. Joining us on the call today are Joe Berquist, our President and Chief Executive Officer; Tom Coler, our Executive Vice President, and Chief Financial Officer; and Robert Traub, our General Counsel.
Our comments relate to the financial information released after the close of the U.S. markets yesterday, October 30, 2025. Our press release and accompanying slides can be found on our Investor Relations website.
Both the prepared commentary and discussion during this call may contain forward-looking statements, reflecting the company's current view of future events and their potential effect on Quaker Houghton's operating and financial performance.
These statements involve uncertainties and risks, which may cause actual results to differ. The company is under no obligation to provide subsequent updates to these forward-looking statements.
This presentation also contains certain non-GAAP financial measures, and the company has provided reconciliations to the most directly comparable GAAP financial measures in the appendix of the presentation materials, which are available on our website.
For additional information, please refer to our filings with the SEC. Now it's my pleasure to hand the call over to Joe.
Thank you, Jeff, and good morning, everyone. We had a strong performance in the third quarter with adjusted EBITDA up 5% and adjusted earnings per share up 10% year-over-year.
Our results were highlighted by another consecutive quarter of organic volume growth across all regions. This was amplified by ongoing strength in Asia Pacific and strong new business wins of 5% globally, enabling Quaker Houghton to outperform its underlying end markets.
Our earnings growth reflects the increase in organic sales, contribution from acquisitions, especially Dipsol and a sequential expansion in operating margins as we better leverage our scale.
The organization is balancing both operational discipline and strategic execution while advancing our key objectives. This is resulting in an acceleration of new business wins at appropriate levels of profitability across the portfolio.
These actions are building on our solid foundation and give us confidence in our ability to drive sustainable long-term outperformance.
Cash generation and capital discipline also remains strong. In the third quarter, we generated $51 million of operating cash flow and made progress on our capital allocation strategy, including reducing our net leverage to 2.4x and returning cash to shareholders through share repurchases and dividends.
Our business continues to perform well, and we remain focused on what we can control while navigating the dynamic and uncertain environment.
I am proud of the team's performance in 2025 as well as the organization's renewed focus in delivering meaningful productivity and results for our customers through innovation, technical expertise, and service.
Third quarter results were in line with our expectations despite markets being softer than anticipated. Uncertainty around tariffs continue to weigh on customer operating plans.
We estimate end market activity declined a low single-digit percentage compared to the prior year. And on a year-to-date basis, production levels across our major end markets, including steel, automotive, internal combustion engines and industrial products are down a low single-digit percentage globally compared to 2024.
Relative to our markets, we are outperforming. In the third quarter, we delivered a 7% year-over-year increase in sales on a 3% increase in organic sales volumes. This was most notable in Asia Pacific, which delivered another 8% increase in organic sales volumes.
Net share gains were also strong at 5% globally as the team is successfully executing our commercial strategy, capitalizing on the pipeline of cross-selling opportunities, reducing churn, and solving complex customer needs.
These wins and the evolution of the pipeline should provide continued benefit to the organization as we wrap into 2026.
Our organic growth was complemented by a contribution from acquisitions, namely Dipsol, which we closed in the second quarter. We are pleased with the ongoing integration of Dipsol. The business is performing in line with our expectations, and we are excited by the commercial opportunities it provides the combined organization.
Gross profit dollars increased compared to both the prior year and prior quarter. Importantly, gross margins improved from the second quarter and are within our targeted range, which promotes growth at solid levels of profitability.
We generated $83 million of adjusted EBITDA, an increase of approximately 5% year-over-year and 10% sequentially. This reflects the top line growth and operational improvements, including ongoing cost controls.
Adjusted EBITDA margins of 16.8% continue to improve towards our targeted range. When I stepped into the role a year ago, I set out 3 key priorities, underpinned by several initiatives aimed at strengthening the core of our organization.
Our strategy is working, and these actions are yielding results as demonstrated in the resilience of our earnings profile. From a commercial standpoint, we have doubled down on our commitment to serving the customer.
We have taken a focused strategic approach to customer segmentation and are advancing key initiatives to improve service levels and optimize our portfolio, scaling the organization to have the capabilities to deliver the right solutions and services to meet and exceed our customers' needs.
We have also increased our discipline in pursuing new business opportunities, leveraging innovation. For instance, in aluminum, where we recently introduced new products, cross-selling our leading portfolio and being more intentional with pricing.
Our teams are working diligently to reduce churn, which I am pleased has trended back to historic low single-digit levels and winning back previously lost business. These efforts are paying off with positive year-to-date organic volume growth and new business wins, which are at the high end of our targeted range.
To give some context to these actions, we are leveraging our global scale, footprint, and R&D capabilities. We have localized or transferred production of select products, for instance, in forging and specialty greases.
This flexible sourcing provides greater consistency, speed, and cost efficiency, enhancing our competitiveness.
When aggregated, these smaller wins add up and are meaningful contributors to the strong organic volume growth that we have delivered for the past 9 consecutive quarters in Asia Pacific.
We believe we are well positioned to continue to capitalize on the growth in China, India and Southeast Asia and will further benefit as our new China facility comes online in 2026.
Our new R&D lab in Brazil expands our global innovation network, strengthens technical capabilities for local customers and supports the growth of Advanced Solutions in the region.
These enhancements highlight some of the swift targeted actions we're taking to accelerate growth and provide the full portfolio in all regions. Our team is hyper-focused on growing our portfolio of Advanced Solutions.
In the third quarter, we delivered our fourth consecutive quarter of high single-digit or low double-digit organic volume growth in the product segment with a strong contribution across all regions.
We have significant opportunities ahead to continue to align the business towards these attractive areas of the portfolio, especially as we leverage our increased scale with Dipsol.
We have also maintained a clear emphasis on controlling what we can control. From a cost perspective, on a year-to-date basis, organic SG&A is down approximately 3% as we make progress on our cost and efficiency actions announced earlier this year.
We began to put in motion further network optimization actions aimed at unlocking the leverage in our model.
We have closed one manufacturing facility year-to-date in the Americas, and we consider further actions in our manufacturing footprint will be needed to improve our asset utilization, reduce manufacturing costs while maintaining the quality and service levels customers expect from us.
These actions support our ability to deliver adjusted EBITDA margins in the high teens as a percent of sales over time. We will continue to benefit from the ongoing cost actions in the fourth quarter and 2026.
And lastly, we are fully committed to executing on our disciplined capital allocation strategy. In the quarter, our outstanding debt balance was reduced by $62 million, and our net leverage ratio is below our targeted range of 2.5x.
Year-to-date, we have returned approximately $62 million to shareholders through dividends and share repurchases while maintaining our balance sheet flexibility to execute on strategic acquisitions.
The team is energized. We are executing on our strategy to deliver growth, reduce complexity and efficiently deploy capital to unlock our potential.
Turning to outlook. Macroeconomic trends have remained soft through 2025, and we expect them to remain so at least through Q4. We also expect a return to normal seasonal trends in the fourth quarter, and there is lingering uncertainty that continues to weigh on customer operating rates from tariffs and global trade.
We anticipate continued momentum driven by share gains and our ongoing cost actions will help mitigate these impacts.
Based on our current visibility in the fourth quarter, we expect to deliver another quarter of revenue and adjusted EBITDA growth on a year-over-year basis and should generate solid cash flow.
We have conviction in our strategy and are balancing the near-term and long-term needs of the organization. We have delivered strong results year-to-date despite a softer macro backdrop and current data suggests markets could begin to stabilize in 2026.
Irrespective, the share gains and cost actions we are delivering give me confidence that we are well positioned to return to growth in 2026 and beyond. With that, I'd like to pass it to Tom to discuss the financials in more detail.
Thank you, Joe, and good morning, everyone. Third quarter net sales were $494 million, a 7% increase from the prior year. Organic volumes increased 3% and were strong across all segments, driven by share gains of approximately 5%.
Acquisitions contributed an additional 5% to sales, primarily related to Dipsol, which closed in the second quarter of 2025. Selling price and product mix were 2% lower than the prior year.
This consists of impacts from both product, service, and geographic mix as well as pricing largely associated with indexes.
Gross profit dollars increased year-over-year and sequentially on a non-GAAP basis. Gross margins were 36.8% compared to 37.3% in the third quarter of 2024 and are comfortably within our targeted range.
Gross margins increased compared to the second quarter of 2025 due to some modest raw material cost favorability and productivity actions, partially offset by higher manufacturing costs and the impact of mix.
On a non-GAAP basis, SG&A increased approximately $5 million or 4% compared to the prior year. Excluding acquisitions, SG&A is approximately 3% lower on a year-to-date basis as we effectively manage costs.
We are making good progress on our previously announced cost actions without sacrificing our ability to serve customers and invest in our strategic initiatives as we expect more -- and we expect more benefit in Q4 and 2026.
We delivered $83 million of adjusted EBITDA in the third quarter, an increase of 5% compared to the prior year and 10% sequentially. Adjusted EBITDA margins of 16.8% are trending toward our targeted range driven by the top line growth and disciplined cost management.
Switching to our segment results. The momentum in our Asia Pacific segment is evident, and the business is consistently outperforming its markets.
The Asia Pacific segment has delivered positive organic sales growth in 8 of the last 9 quarters, including approximately 3% in the third quarter of 2025.
This is driven by a strong contribution from new business wins, winning trials with new and existing customers in higher-growth geographies like India, through cross-selling and in new areas of our portfolio like Advanced Solutions.
Asia Pacific segment sales increased 18% year-over-year as organic growth was amplified by a contribution from our acquisition of Dipsol, which is performing in line with expectations despite the challenging end market environment, particularly in automotive.
Sales and organic volumes increased approximately 4% in Asia Pacific sequentially. We are improving operating leverage in Asia Pacific as segment earnings increased 16% year-over-year on the improvement in sales and modest raw material deflation.
Segment earnings also increased more than 20% sequentially as we had some onetime acquisition-related items impacting margins in the prior quarter, which did not repeat.
We continue to have opportunities for growth across the region. While end market conditions remain the most challenged in EMEA, net sales grew compared to the prior year and prior quarter for the second consecutive quarter.
Organic sales grew 2% compared to the prior year across most product categories and once again delivered double-digit growth in Advanced Solutions. Segment earnings in EMEA also improved due to the increase in net sales and consistent segment operating margins.
Net sales in the Americas increased 1% year-over-year. Organic volumes were flat as new business wins, especially in Advanced and Operating Solutions, offset softer-than-expected end market activity, which we estimate declined a low single-digit percentage in the quarter, primarily in metalworking applications.
Americas segment earnings declined $3 million or 5% compared to the prior year, primarily driven by lower margins due to higher raw material and manufacturing costs as well as the impact of mix.
Segment margins were consistent with the second quarter of 2025. Overall, we delivered sales growth and an increase in organic sales volumes in all segments in the third quarter.
Our initiatives to return to growth and reduce complexity are gaining traction. Share gains are strong, and we are maintaining discipline around costs to better leverage our scale and footprint to drive adjusted EBITDA margins towards our targeted range.
Turning to nonoperating costs. Our interest expense was $11 million in the third quarter. Our cost of debt remained approximately 5% in the quarter.
Our effective tax rate, excluding nonrecurring and noncore items, was approximately 28%, and we expect our full year effective tax rate will be approximately 28%.
In the third quarter, our GAAP diluted earnings per share were $1.75. Our non-GAAP diluted earnings per share were $2.08, a 10% year-over-year increase.
Cash generated from operations was $51 million in the third quarter. Working capital was a modest use of cash as expected as we built some inventory related to ongoing manufacturing and network optimization actions.
We also had approximately $6 million of incremental restructuring-related cash outflows. Despite these items, cash conversion was within our targeted range, and we continue to expect to deliver another solid year of cash flow in 2025.
Capital expenditures in the third quarter were approximately $13 million, reflecting the timing of the construction of our new facility in China, which is expected to be online in the second half of 2026.
CapEx is expected to be between 2.5% and 3% of sales in 2025 as we make progress on the construction of our new China facility and consolidate our headquarters and labs in Pennsylvania.
In the quarter, we prioritized debt repayment, reducing our outstanding debt by $62 million. Our net debt at quarter end declined to $703 million, and our net leverage ratio improved to 2.4x our trailing 12 months adjusted EBITDA.
Our consistent cash generation capabilities provide ample balance sheet flexibility to support our growth aspirations. We have also returned to shareholders approximately $62 million year-to-date through dividends and share repurchases.
The third quarter was a positive reflection of our execution, improving our cost competitiveness, responsiveness and delivering value for customers.
While we expect macroeconomic conditions to remain soft in the fourth quarter, we are confident in our strategy and our ability to outperform underlying end market conditions by capitalizing on our pipeline, managing costs, improving margins, and generating strong cash flow. With that, I'll turn it back over to Joe.
Thank you, Tom. I am proud of the global Quaker Houghton team who continue to execute for our customers, our company, and our shareholders. We are making progress on our strategic initiatives and positioning the company for long-term above-market profitable growth. With that, we'd be happy to address your questions.
[Operator Instructions] And our first question is from the line of Mike Harrison with Seaport Research Partners.
2. Question Answer
Congrats on a nice volume quarter in a challenging environment. I was hoping that you could maybe give us some details on the Asia Pacific business and specifically on the margin performance.
I think last quarter, there were some mix issues. You mentioned the acquisition, maybe some initial integration costs there as well as oleochemical raw materials that were dragging last quarter.
Really nice sequential improvement this quarter, even though you still seem to be showing some negative price/mix. So I'm wondering, are there still some margin pressures that are happening even with the improvement that you saw?
I think we're just trying to get a sense of whether we could still see some further improvement in Asia Pacific margin over the next few quarters.
Yes. Thanks, Mike. Thanks for the question. Overall, Asia Pacific, I think, has been a really bright spot for the company. We continue to win new business. We're selling the whole portfolio, right? And in that portfolio, I think there's a mix of things across the margin range.
Not all of them are on the high end, not all of them are on the low end, somewhere in the medium. So there's some lumpiness at times. We have thought, I think, for a big part of the year, oleochemicals, especially in that part of the world.
And we tend to lag getting some pricing in. We do expect some of that is still coming in here toward the back part of the year. But overall, it's been a really good story for us.
There's some geographic things that come into play as well. I think our growth in India is also part of the story in Asia Pacific. It's not just a China thing.
So again, some lumpiness. I think overall, like targeted range of where we want to be in that business. We think we're in a good place to grow profitably, continue to win share in that part of the world.
Yes. And Mike, this is Tom. I would just add to Joe's comments. I think he hit on -- we're really pleased with the growth in Asia Pacific and our opportunity to continue to win new business there, opportunities in India, specifically on segment margins in the quarter, I would say there's 2 components.
Joe sort of talked about the raw material impact. We saw some slight deflationary impact associated with that in Q3. The other part of that is we had some nonrecurring onetime items in Q2 related to the acquisition of Dipsol. So that's sort of the other half of what you're seeing in the margin improvement from Q2 to Q3.
All right. Very helpful. And then you mentioned a couple of times, Joe, the Advanced Solutions strength, and you recently expanded that offering with Dipsol.
There's also just within the industry, one of the major players in surface treatment is going to be transitioning into private equity ownership, which can sometimes lead to disruption.
So I was just wondering, can you talk about how you're seeing the opportunity going forward to pick up further market share in Advanced Solutions and particularly in surface treatment and some of the metal treatment that you acquired with Dipsol?
Yes, Mike. I mean that part of our business is something, again, we're excited about because part of the play that we've been running over the past few years is our customers want to buy not just lubricants from us, they're actually looking to buy things across the portfolio to help them manufacture things better.
And -- so our entry into this Advanced Solutions space and our investment in that space is really a good opportunity for us to grow in different parts with our customers and in parts of their business that actually maybe are growing a little bit better than some of the traditional chemistries.
And I think from a Quaker Houghton perspective, I'd like to use the old baseball analogy, right? We're still in the really early innings with some of these acquisitions, even Norman Hay that we made back in 2019 in globalizing that.
It does take some time to transfer the technology into the sales force. It takes some time to build the supply chain to be competitive in all regions. And Dipsol, it's been performing, I think, as expected and maybe even a little bit better when you consider they're heavier weighted in Japan and -- with automotive, which has been a tougher place.
But we're excited about the opportunity to continue to roll that out across our other regions and provide that full offering to the market for -- and gives us an opportunity to grow, I think, as we look forward.
All right. And then I was just looking for a little bit of clarification on the Q4 outlook. Last Q4, I believe there were some strike-related issues and downtime, some unusual margin weakness associated with that. And then in the meantime, you've taken out costs. You've also done an acquisition.
So I guess just in terms of the view that Q4 should be up revenue and earnings year-on-year. Can you give us maybe a little more precision on how you're thinking about organic growth year-on-year in the fourth quarter and maybe on margin improvement year-on-year?
Yes. Thanks, Mike. Yes, I mean, look, we have really good momentum heading into Q4. I think we have confidence in the net business wins that we've collected throughout the year, and that should carry into Q4 and the wrap of the things that we've won in addition to things in our pipeline that we continue to convert.
There's just -- there's a normal seasonality that seems to be returning to the business. And when I talk about seasonality, it's really around holidays, primarily in Europe and in the Americas, you have less working days, you have some holiday outages.
So we'll expect to experience that again this year. As you mentioned, our costs are under control. We continue to work on that previously announced program with some more work to be done there, right?
So we would expect that to continue into Q4. Margin stability, again, you have a little bit of tug in a lower volume environment around capacity utilization.
But we've taken some good steps, I think, as you see sequential margin improvement, and I wouldn't expect anything other than stability from what I'm seeing today.
So overall, consider the fact that we have Dipsol, we didn't have Dipsol last fourth quarter, we feel pretty good about Q4.
But I think there's just a reality that we will see the sort of normal seasonality this year, which we saw last year, it was also compounded last year by some other factors that you mentioned.
Our next questions come from the line of Laurence Alexander with Jefferies.
I guess, first, just a short-term one. The -- where -- you mentioned sort of some optimism on 2026. Are there areas where you're hearing that from customers or -- either directly or indirectly, like they're seeing their customers do investments that they then now have to gear up production to satisfy or support? Or is that more just a general macro comment?
I think it's more of a general comment, Laurence. Look, as far as the market goes next year, I mean, we mentioned a couple of times, we think the markets that we've been in this year are down low single digit, right? And even stability next year would be -- we view that as a good thing, right?
I don't think anyone is saying, hey, next year is going to be underlying market growth, but we're also not seeing anything get any worse.
So we're kind of entering the year looking at our ability to continue to deliver above-market share gains and with visibility on the wrap that we've acquired this year, with visibility on the full annualization of the acquisitions that we've made and also knowing what we can control and are controlling and targeting around costs.
So that's where our kind of optimism is for 2026. It's not necessarily about a market improvement or any sort of inflection yet. There should be continued -- Asia should continue to be strong. Europe, I think, may have hit bottom, right?
So again, stability there would be a positive for us. And then Americas is a question mark, but we're not really factoring any big inflections, positive or negative at this point.
And then when you think about how -- what's driving the share gain dynamic, when end markets do accelerate, do you expect the rate of share gains to accelerate as well so that you get a double -- you get an amplified effect?
Or do you see kind of your focus moving to supporting the end markets and the rate of share gains decelerate because the end markets are healthier, and you're focused more on supporting kind of new business that's coming in the door?
Can you just give us a sense for how to think about modeling out what a recovery scenario might look like?
Yes. No, great question, Laurence. Look, I think over the long haul, I feel really good about our sales model, how we're going to market.
I think one of the things that we've really focused on is reducing our churn and getting our churn back to this low single-digit number and sort of stop shooting ourselves in the foot, and we've done that and feel really good about how we're serving our customers, number one.
Number two, returning to the customer, just really doubling down on this customer intimate model, making sure the whole organization is focused and pointed in that direction, that we're acting with a sense of urgency. I think we're doing that as well.
And I've been really pleased that the new business wins are coming in at that high end of our range. We talked about 2% to 4%. We've actually been a little bit above that.
I think it's possible, Laurence, with the mix and the new business that we've acquired that we could continue to grow on the top end of that range. These are still competitive markets. There's still a long sales cycle.
So there can have -- there can be lumpiness as well over time. We're going to try to get as much as we can with responsible levels of profitability. But I think we feel really good right now about sustaining at least kind of the levels that we're at into the next few quarters.
And then just -- I appreciate this might be a bit of a fuzzy question or might need a fuzzy answer. But if you think about the trends in the industrial markets in terms of robotics and additive manufacturing, do you have the right -- first of all, how -- do you have a sense for how significant those are for you currently?
But more importantly, do you have the right sales mix to be relevant to those markets? Or do you need to add on additional packages or technologies?
No, I think the good news there, I -- the -- your question about how have we quantified what that impact will be. We really haven't. That's something that, from a strategy standpoint, we're looking at and trying to understand that better.
But I think the great news there, Laurence, is we have -- we've been compiling some of these technologies through acquisitions. You talked about additive manufacturing, our Ultraseal business, which is related not only to die-casted product, but sealing products that are 3D printed or die cast, that's something that's really good.
Our growing presence with specialty greases around the world and some of these greases are going to play a really big part in robotics. They do already today. But as that robotic market grows, we think there's an opportunity there for some of the specialty greases that we produce.
Anything made out of metal has our products in the processing side of it. But now with the addition of Dipsol, when you get into plating of these things and the fasteners and even the anodizing of the parts, those are all things that we think will be a benefit for us as we go forward.
Haven't quantified exactly what that benefit will be over the long term, but we feel it's a positive thing.
Our next question is from the line of John Tanwanteng with CJS Securities.
Congrats on a nice quarter here. First off, if you could -- I was wondering if you could discuss just the sustainability of the share gains in new business you talked about. Can you clarify if you're expecting that to remain above that 2% to 4% range you historically had, number one?
And number two, how much is pricing and the margin you're willing to have on that new business has been a factor in gaining that share? Have you taken a little bit less margin there? Or is it still in that higher range versus your kind of target range?
Yes. Great question, John. Look, overall, I still think our range over the long term is this 2% to 4%. I'm really pleased that we've been doing better than that. And it's possible we sustain that. It's hard to say.
As I said earlier, it's still a competitive market and our sales cycle is a little bit longer. But we feel really good about that 2% to 4% range because we've done that consistently, and I would expect we would continue to do that as we go forward.
When it comes to pricing, complex question. I think what we have done is we've been very strategic about getting back to this sort of good, better, best offering with our portfolio, giving our customers some choices, especially as they're struggling in tough environments.
And we want to make sure that we're giving them the full range of -- there's a little bit of background noise there, sorry. But I think we haven't necessarily been aggressive, John, in like lowering price to gain market share. That has not been and will not be our approach really ever.
But also, I think being strategic with the portfolio and making sure we could sell things that are not only in the best technology range, but also in the good and better range. It helps us as we talk to our customers.
Got it. That's helpful, Joe. And then just a question on the outlook. I know you've guided to growth for Q4, but I noticed you declined to update, I think, the prior language around guidance, which was in the range of 2024 for earnings. Can you just help us understand where you stand relative to the prior outlook and if that's still valid?
Yes. I think -- look, we still feel, as I mentioned earlier, our fourth quarter is going to be better than it was last year, right?
In the third quarter, I think we got there on the overall sort of our expectations, how we got there was a little bit different in that the volume is up, but there's still some price/mix headwind.
I absolutely feel like within range, within range, how do I quantify that, John? It's hard to give you an exact quantification of that. But I feel like our fourth quarter, we are very confident is going to be better than last year.
Our second half of this year is, as we said, will be better than the first half of this year. And you layer in some things like our Dipsol acquisition, which we didn't have last year in the fourth quarter and the cost of -- the cost actions that we've taken, we think we can still come within range, let's say that, within range of last year.
Our next question is from the line of Arun Viswanathan with RBC.
I guess I'm just curious on the APAC beat now for a couple of quarters. Does that potentially signal what could happen in other regions? Why are you guys outperforming there?
Is that a combination of share gains and market growth? Or is it just one or the other? And does that -- again, would you expect similar kind of trajectory in other regions as you progress forward?
Yes, it's a good insight. It is a combination, right? Those markets are stronger, are growing, more investment in those areas. So in addition to really executing on the margin gain, but -- or not margin gain, sorry, the new business wins. So it's a combination of a strong market and executing the sales pipeline.
And then the pricing, you may have addressed this earlier, apologies, but are you kind of -- do you think that you've kind of finished giving back all that pricing that maybe flows through with lower raws?
And as you look ahead, what do you expect on the raws side? And would that also kind of -- if you do expect maybe some continued deflation, does that mean that pricing continue has to adjust lower?
And does that actually ultimately result in maybe some volume gain? Or could you keep this 3% going? Maybe just talk about the dynamic between -- or the trade-off between price and volume.
Yes. Thanks, Arun. This is Tom. I'll talk a little bit about that. So I think when we think about the price/mix dynamic, again, we saw that impact in Q3 is about 2%. It continues to moderate as we go through the year.
On a sequential basis, it was essentially no impact on our top line. I think as Joe had mentioned earlier, some of that pricing dynamic was -- wasn't as intentional as we focus on our -- the breadth of our portfolio and our ability to give customers options from a good, better, best perspective.
We also do have some targeted pricing actions where we've got sort of a fit-for-purpose pricing strategy in pockets of our portfolio in various geographies. So if we think about Q3, I would say price/mix was essentially half price and half mix.
The other component there on the mix side is really a combination of both just the dynamic of our portfolio and how we're selling that through to end customers and the mix associated with that.
Not all of our products have the exact same margin profile. And then also there's regional differences. So again, I think as we think about it going into 2026, we do expect the impact of this to lessen as we wrap some of these impacts.
But it is a dynamic market environment, and we are trying to be responsive to our customers in terms of our product offering and how we think about good, better, best.
Great. And then lastly, just curious on -- you mentioned ICE vehicles. How are you viewing your exposure there in relation to EVs? Are you expanding your offering with EVs?
If I recall correctly, maybe your performance would be better with an ICE. Could you just reiterate what would be -- what's more advantageous for you guys?
And I'm just curious because we've obviously seen stronger growth on the EV side. And are you increasing your exposure there or not necessarily?
Yes. I think that's one of the things that's really exciting about the Asia story is we're growing with some of these new winners in EV. And that's intentional. That's something that we recognize was coming.
It's certainly accelerated in that part of the world. It's maybe stalling a bit in other parts of the world. But we find it important that we grow with the new winners in that space, and we're doing that.
We've added some things to our portfolio that really position us very well for EV. The overall sort of -- as we look at that, a traditional ICE engine, if you call that par, an EV would use a little bit less of our traditional metalworking fluids.
A hybrid engine would use a lot more -- or not a lot, but a little bit more. So on balance, I think it's the algorithm that we look at is automotive production in general. And our opportunities for ICE and EV are both compelling and similar.
At this time, we've reached the end of our question-and-answer session. I'd like to turn the floor back over to Joe Berquist for closing comments.
Thank you. Thank you for joining our call today. We are excited about our future and excited for Quaker Houghton and all of our employees. Appreciate your continued interest in our company. And please reach out to Jeff if you have any additional follow-up questions. Thank you.
This will conclude today's conference. You may disconnect your lines at this time and have a wonderful day.
Quaker Chemical Corporation — Q3 2025 Earnings Call
Financial data from Quaker Chemical Corporation
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 1,975 1,975 |
8%
8%
100%
|
|
| - Direct Costs | 1,263 1,263 |
8%
8%
64%
|
|
| Gross Profit | 712 712 |
8%
8%
36%
|
|
| - Selling and Administrative Expenses | 524 524 |
8%
8%
27%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 288 288 |
10%
10%
15%
|
|
| - Depreciation and Amortization | 100 100 |
16%
16%
5%
|
|
| EBIT (Operating Income) EBIT | 188 188 |
7%
7%
10%
|
|
| Net Profit | 97 97 |
1,460%
1,460%
5%
|
|
In millions USD.
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Quaker Chemical Corporation Stock News
Company Profile
Quaker Chemical Corp. is engaged in the business of developing, producing and marketing formulated chemical specialty products. It operates through the following geographical segments: North America, EMEA, Asia/Pacific, and South America. Its products include can making lubricants, cleaners, coatings, cold rolling oils, corrosion preventives, die casting lubricants, dust suppressants, greases, ground control agents, hot rolling oils, hydraulic fluids, industrial lubricants, longwall fluids, metal forming fluids, metal removal fluids, pickle oils, surface treatments, temper fluids, and tin plating. The company was founded in 1918 and is headquartered in Conshohocken, PA.
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| Head office | United States |
| CEO | Mr. Berquist |
| Employees | 4,700 |
| Founded | 1918 |
| Website | home.quakerhoughton.com |


