Are Cabot's growth investments keeping pace with industry growth, or are they expanding ahead, and what is their share within the industry?

Battery Materials is a top priority, with Cabot uniquely positioned due to its broad portfolio and global footprint. They aim to synchronize capacity additions with customer gigafactory startups and have been growing above the market rate, expecting this trend to continue. “More recently, we've been growing above the market rate, and we would have expectations that we continue to perform at that level.”

Is the trend of lessening tire import headwinds continuing, and can normalization be expected by year-end/next fiscal year?

The EU's implementation of antidumping duties (24-45%) on Chinese tire imports is positive, with potential countervailing duties by August/December. EU imports are down 16% YoY through April. North America imports are down 3% YoY, and US imports down 2% YoY through April. Trends are encouraging. “The first I would say is that we're encouraged by the EU's decision to implement antidumping duties on Chinese tire imports... most of the companies fall inside the range of 24% to 45% antidumping duty.”

Is there a specific end market (EVs vs. data storage) that uses more of Cabot's products or offers higher margins, or is it universal?

There are diverse performance requirements across battery applications (EVs, energy storage, industrial) and chemistries (LFP, NCM, solid-state). Conductive additives are required in all. Cabot's broad portfolio allows tailoring solutions for specific performance needs (e.g., fast charge vs. range). “In each of those chemistries, in every single one, conductive additives are required. So at a real basic level, I would say we're agnostic from a demand level.”

CBT

Cabot (CBT) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q3 FY26)· Materials· Aug 4, 2026

Source: earnings call transcript

Executive summary

Cabot Q3 FY26 — Strong Performance Chemicals and Battery Materials Growth

Cabot delivered solid Q3 FY26 results, driven by strong Performance Chemicals performance and rapid scaling of Battery Materials, despite challenging market conditions and raw material volatility. The company is navigating a dynamic environment with disciplined execution, strategic investments in battery materials capacity, and a focus on long-term value creation, while also managing a planned CEO transition.

Highlights

Adjusted EPS of $1.67, an increase of 4% sequentially.
Performance Chemicals segment EBIT of $68 million, up 19% year-over-year.
Reinforcement Materials global volumes increased 5% year-over-year, with Asia Pacific up 10% and Americas up 4%.
Battery Materials EBITDA reaffirmed at approximately $40 million for FY26, with trailing 12-month EBITDA margins of approximately 24%.
Received Platinum sustainability rating from EcoVadis for the sixth consecutive year, placing Cabot among the top 1% of companies in its category.

Concerns

Reinforcement Materials EBIT of $97 million, down from $128 million in the prior year quarter, primarily due to lower gross profit per ton from 2026 annual tire customer agreements.
Higher net working capital of approximately $44 million associated with rapidly rising raw material costs.
Expected modest sequential decline in Reinforcement Materials EBIT in Q4 due to lower seasonal demand and less favorable regional product mix.
Expected lower seasonal volumes and normalization of gross profit per ton in Performance Chemicals in Q4 as raw material costs catch up to pricing actions.

Guidance & targets

Category	Target	Timeline	Confidence
Adjusted Earnings Per Share	$6.15 to $6.45 per share high materiality	FY26 · 2026	Medium
Operating Tax Rate	28% to 30% medium materiality	FY26 · 2026	Medium
Capital Expenditures	$200 million to $215 million high materiality	FY26 · 2026	High
Battery Materials EBITDA	approximately $40 million high materiality	FY26 · 2026	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Reinforcement Materials Year-over-year decline in earnings was primarily driven by lower gross profit per ton resulting from 2026 annual tire customer agreements. These impacts were partially offset by higher volumes and a more favorable regional product mix. Americas volumes benefited from the Mexico acquisition and higher base business volumes. Asia Pacific volumes benefited from new capacity in Indonesia and underlying demand, plus an easier comparison to a particularly weak Q3 FY25 in China. EBITDA: $117 millionEBITDA margin: 20%Global volumes growth YoY: 5%Asia Pacific volumes growth YoY: 10%Americas volumes growth YoY: 4%	—	—	—	EBIT $97 million
Performance Chemicals Strong quarter with EBIT increasing by $11 million year-over-year, driven by both higher volumes and higher gross profit per ton. Volume growth was led by battery materials (electric vehicle and battery energy storage applications) and fumed metal oxides (electronics-related applications). Gross profit per ton improved due to a favorable product mix and proactive pricing actions implemented ahead of rising raw material costs. EBIT growth YoY: $11 millionVolume growth: led by battery materials and fumed metal oxidesGross profit per ton: improved compared to prior year	—	—	—	EBIT $68 million

Orderbook & backlog

Infrastructure Applications Order Backlog (Wire and Cable) record Q3 FY26

Driven by grid renewal, alternative energy growth, and power demand from the AI super cycle, which is driving demand for conductive carbons and compounds.

Deals & partnerships

Undisclosed Acquisition of an asset in Mexico

The recently acquired asset in Mexico contributed to the 4% year-over-year volume increase in the Americas for the Reinforcement Materials segment.

Capital programs

Battery Materials Conductive Additive Capacity Expansion underway approximately $125 million

Benefit:new conductive additive capacity

Program advanced in Q3 FY26. Redefined from a previously contemplated greenfield facility in Michigan to brownfield capacity additions at 2 existing U.S. manufacturing sites, plus investments in China. This approach provides flexibility and capital efficiency to support customer growth and synchronize capacity with customer start-up dates. This allocation of growth CapEx is already contemplated in the total CapEx envelope.

Risks & headwinds

Lower gross profit per ton in Reinforcement Materials Q3 FY26

EBIT down from $128 million to $97 million YoY

Mitigation:Operational performance focus, process technology expertise, customer engagement, restructuring and other cost actions.

Raw material cost volatility Ongoing

$44 million higher net working capital in Q3 FY26

Mitigation:Disciplined execution, proactive pricing actions, managing factors within control.

Geopolitical uncertainty and mixed demand Near-term dynamics

Impacts reflected in adjusted EPS guidance assumptions

Mitigation:Adapting to changing market conditions, supporting customers, advancing strategic initiatives.

Reinforcement Materials Q4 seasonal decline Q4 FY26

Expected modest sequential decline in EBIT

Performance Chemicals Q4 seasonal decline and margin normalization Q4 FY26

Gross profit per ton expected to normalize

What to watch in Q4 FY26

Public Bond Refinancing

Q4 FY26

Current Public bond matures in September

Target Refinancing completed

Why it matters

Ensures continued financial flexibility and disciplined liquidity management.

In the fourth quarter, we expect to refinance our public bond, which matures in September.

Find out whether CBT delivers this. Inve re-checks your case every morning.

Q&A highlights

How is Cabot managing pricing for Specialty Carbons given oil volatility, and will they hold prices until oil settles?

Management stated they have a strong track record of managing pricing in dynamic raw material environments, as demonstrated by Q3 execution. They expect margins to normalize in Q4 as higher raw material costs catch up with pricing actions. Pricing is based on value delivered but must respond to raw material movements.

“As we move forward, we would expect margins to normalize in Q4 as the higher raws catch up. with the pricing. That said, the environment is very, very dynamic. And so we remain on guard here and make sure that we're moving appropriately to manage pricing as oil moves.”

asked by John Ezekiel Roberts · answered by Sean Keohane

2 min read 6 chapters

Detailed narrative

Leadership Transition

Sean Keohane announced his retirement as President and CEO effective September 30, 2026, after nearly 25 years with Cabot. Erica McLaughlin, current CFO and Head of Corporate Strategy, has been appointed as the next President and CEO, effective upon Keohane's retirement.

A search for a new CFO has been initiated. This transition is described as a thoughtful and well-planned succession process, providing continuity in strategy and execution for the company's next phase of growth.

Battery Materials Growth Strategy

Battery Materials is a key part of Cabot's growth strategy, fueled by strong underlying market momentum. Global battery demand is expected to more than double by the end of the decade, driven by electric vehicles, battery energy storage systems, and emerging applications like drones and robotics.

Approximately 30% of current demand is derived from non-EV applications. Cabot aims to capitalize on this broad-based growth through its diverse product portfolio and global manufacturing footprint, which enables it to support customers as they localize battery production.

Sustainability Recognition

Cabot earned a Platinum sustainability rating from EcoVadis for the sixth consecutive year, placing it among the top 1% of companies in the basic chemicals manufacturing category. EcoVadis is the world's largest provider of business sustainability ratings, assessing over 150,000 companies globally. This recognition reflects Cabot's continued commitment to transparency and responsible business practices, providing independent validation of its sustainability performance to customers and stakeholders.

Reinforcement Materials Market Dynamics

The Reinforcement Materials segment delivered $97 million EBIT despite challenging market conditions and pricing headwinds from 2026 annual tire customer agreements. Global volumes increased 5% year-over-year, with Asia Pacific up 10% and Americas up 4%, benefiting from new capacity in Indonesia and the recently acquired asset in Mexico.

The EU's implementation of antidumping duties (24-45%) on Chinese tire imports, with potential countervailing duties by August/December, is seen as a positive development for the European tire industry.

Performance Chemicals End-Market Trends

The Performance Chemicals segment is experiencing mixed demand across its end markets. While battery materials, infrastructure applications (wire and cable), and electronics (semiconductors, AI-driven demand) show strong tailwinds, automotive OE production and housing/construction are facing headwinds. Overall, the segment is expected to achieve low single-digit volume growth this fiscal year.

In a normalized environment, the portfolio is anticipated to grow at approximately 1.5 to 2 times GDP.

Capital Allocation Framework

Cabot remains committed to a balanced capital allocation framework. This includes maintaining its world-class asset base, funding high-confidence growth projects such as battery materials, and returning cash to shareholders through dividends and share repurchases. The company also prioritizes preserving balance sheet strength and financial flexibility, as evidenced by its strong liquidity position and plans to refinance its public bond maturing in September.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.