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    Earnings call· Jun 2026(Q2 FY26)

    Chemours Q2 FY26 earnings call CC

    Aug 5, 2026 Source

    Executive summary

    The Chemours Company Q2 FY26 — Strong Pricing and Operational Performance Offset Softer Residential AC Demand

    Chemours delivered a mixed second quarter, with strong pricing execution and operational improvements in Titanium Technologies and Advanced Performance Materials offsetting softer demand in the Thermal and Specialized Solutions residential aftermarket. The company continues to advance its Pathway to Thrive strategy, focusing on balance sheet de-risking, debt reduction, and portfolio transformation, with an emphasis on high-value growth markets like data centers and semiconductors. Management is exploring all strategic options to unlock shareholder value.

    Highlights

    5

    • Adjusted EBITDA exceeded expectations, supported by stronger operational performance and improved product mix in APM, lower corporate costs, and pricing strength in TT.

    • Pricing improved across all businesses, including a 5% year-to-date price increase in TT due to three announced TiO2 price increases since December 2025.

    • APM's Performance Solutions portfolio net sales grew 8% year-over-year, driven by high-value specialty applications for data center and semiconductor end markets.

    • Strong cash generation enabled repayment of close to $270 million of the 2028 euro term loan, with $103 million beyond prior communication.

    • Notable progress resolving legacy litigation, including settlements with the U.S. EPA and West Virginia DEP, derisking the balance sheet.

    Concerns

    5

    • Net sales were slightly below expectations due to softer residential stationary AC demand in Thermal and Specialized Solutions (TSS).

    • TSS aftermarket customers built additional inventory in 2025 due to AIM Act channel fill, leading to an oversupplied channel and destocking in Q2 2026.

    • Residential demand in TSS is pressured by higher interest rates, affordability challenges, and a slower housing market, weighing on Q2 order activity.

    • APM net sales were down year-over-year primarily due to lower volumes from the SPS Capstone line closure in Q3 2025.

    • APM Adjusted EBITDA declined year-over-year due to lower sales volumes from the line closure and higher costs from a now-resolved Washington Works outage.

    Guidance & targets

    19
    CategoryTargetConfidence
    Full-year Net Sales Growth
    1% to 5%
    high materiality
    High
    Full-year Adjusted EBITDA
    $775M to $825M
    high materiality
    High
    Full-year Capital Expenditures
    $250M to $280M
    medium materiality
    High
    Full-year Free Cash Flow Conversion
    above 25%
    high materiality
    High
    Net Leverage Ratio
    around 3.8x adjusted EBITDA
    high materiality
    High
    Long-term Adjusted EBITDA
    at least $1B
    high materiality
    High
    Long-term Free Cash Flow Conversion
    exceeding 40%
    high materiality
    High
    TSS Net Sales Growth
    decline mid-teens to 20%
    medium materiality
    High
    TSS Adjusted EBITDA
    $125M to $140M
    medium materiality
    High
    TT Net Sales Growth
    increase low to mid-single-digit percentage
    medium materiality
    High
    TT Adjusted EBITDA
    $70M to $80M
    medium materiality
    High
    APM Net Sales Growth
    increase mid- to high single-digit percentage
    medium materiality
    High
    APM Adjusted EBITDA
    $20M to $30M
    medium materiality
    High
    Consolidated Net Sales Growth
    decrease 5% to flat
    high materiality
    High
    Consolidated Adjusted EBITDA
    $175M to $205M
    high materiality
    High
    Corporate Expenses
    $40M to $45M
    low materiality
    High
    Capital Expenditure
    $65M
    medium materiality
    High
    Free Cash Flow
    at least $50M
    high materiality
    High
    Consolidated Adjusted EBITDA
    $170M to $220M
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Thermal and Specialized Solutions (TSS)
    Net sales were slightly down due to lower volumes from reduced aftermarket sales of Opteon blend in North America, partially offset by higher pricing in Freon refrigerants. OEM volumes for Opteon grew. Adjusted EBITDA and margins increased year-over-year due to higher pricing and timing of certain costs. Aftermarket is working through elevated inventory from 2025 channel fill.
    Opteon OEM volumes growth: year-over-yearFreon refrigerants pricing: higherAftermarket inventory: elevatedAftermarket destocking: ongoingStationary aftermarket growth target: mid- to high single-digit percentage annually (long-term)
    		slightly down——increased year-over-year
    Titanium Technologies (TT)
    Net sales increased slightly due to global pricing strength. Adjusted EBITDA improved year-over-year, while margin was flat, driven by pricing offsetting higher costs from inflation. The business is managing production to demand and optimizing manufacturing.
    Global pricing strength: increasedTiO2 price increases: 3 since Dec 2025Year-to-date price increase: approximately 5%Volumes: lower (across key end markets, except Asia ex-China and Latin America)
    		increased slightly——improved year-over-year
    Advanced Performance Materials (APM)
    Net sales were down primarily due to lower volumes from the SPS Capstone line closure in Q3 2025 and higher costs from a resolved Washington Works outage. Performance Solutions showed strong momentum in high-value data center and semiconductor end markets.
    Performance Solutions net sales growth: 8% year-over-yearPerformance Solutions sales to targeted markets (data center, semiconductor, AI, advanced electronics): >40%
    		down——declined year-over-year

    Operational metrics

    14
    TiO2 Price Increase
    5%vs. start of year
    YTD

    Reflects disciplined commercial execution and pricing actions in Titanium Technologies.

    2-phase liquid cooling product trials
    70%year-over-year increase
    Q2 FY26

    Supporting continued progress through product trials for sampling across 2-phase applications with several customers.

    Debt Repayment (2028 Euro Term Loan)
    $270M$103M beyond prior communication
    Q2 FY26

    Part of disciplined capital allocation and debt reduction strategy.

    TSS Aftermarket Volume Drop
    25%vs. prior year
    FY26

    Significant change in market size for the aftermarket due to destocking and macroeconomic factors.

    TSS Aftermarket Pre-buy Sales (Prior Year)
    $65Mallocated to current year
    Q2-Q3 FY25

    Sales that realistically should have been allocated to the current year, but were pulled forward due to AIM Act transition and inventory constraints.

    Sales into Data Center, Semiconductor, AI, Advanced Electronics
    9%of total sales
    Q2 FY26

    Reflects expanding exposure to high-growth markets for differentiated solutions.

    APM Performance Solutions Sales into Targeted Markets
    more than 40%of Performance Solutions sales
    Q2 FY26

    Reinforces focus on higher-value markets with stronger growth and margin potential.

    APM Performance Pulled Forward
    $5Minto Q2
    Q2 FY26

    Performance pulled forward into Q2 from Q3 due to sales timing, impacting Q3 EBITDA guidance.

    Long-term Net Leverage Ratio Target
    below 3xsustainably
    long-term

    Longer-term goal for balance sheet strength.

    TT Mid-cycle EBITDA Potential
    over $400M
    mid-cycle

    Analyst-derived figure confirmed by management as a floor for mid-cycle EBITDA.

    APM EBITDA Potential
    $160M
    potential

    Analyst-derived figure for APM's potential EBITDA contribution.

    TSS EBITDA Potential
    $800M
    potential

    Analyst-derived figure for TSS's potential EBITDA contribution.

    TSS Long-term Margin
    30%+
    long-term

    Management's view on the underlying profitability of the TSS business.

    Free Cash Flow Conversion
    above 40%
    Q2 FY26

    Strong cash flow characteristics for the quarter.

    Industry KPIs

    2
    MetricValueDetails
    Volume vs price split—
    Productivity cost savings program—

    Orderbook & backlog

    1
    APM Performance Solutions Order BookstrongQ2 FY26

    Driven by long-term sustainable demand tailwinds in data center and semiconductor end markets.

    Product announcements

    1
    ProductTypeDetails
    2-phase liquid cooling productsmilestone

    Risks & headwinds

    7
    Softer Residential Stationary AC DemandQ2 FY26, potentially continuing through the year

    Net sales slightly below expectations

    Mitigation: Disciplined commercial execution, focus on OEM growth, expectation of aftermarket normalization and seasonal restocking ahead of next year's cooling season.

    Elevated Aftermarket Inventory (TSS)Continuing through the year, normalizing by Q1 2027

    oversupplied channel heading into 2026

    Mitigation: Aftermarket expected to begin normalizing as inventory levels are reduced and seasonal restocking begins.

    Macroeconomic Headwinds (TSS)Q2 FY26, potentially continuing

    higher interest rates, affordability challenges, slower housing market

    Mitigation: Focus on long-term fundamentals, advantaged market position, regulatory tailwinds.

    Inflationary Pressures (TT)Ongoing

    higher costs from inflation

    Mitigation: Strong commercial execution, disciplined cost management, realized pricing gains (5% YTD price increase) more than offsetting headwinds.

    SPS Capstone Line Closure Impact (APM)Q2 FY26 (closure in Q3 2025)

    lower volumes, net sales down

    Mitigation: Shifting portfolio mix to Performance Solutions, focusing on higher-value markets with stronger growth and margin potential.

    Washington Works Outage (APM)Q2 FY26 (now resolved)

    higher costs, Adjusted EBITDA declined

    Mitigation: Return to normal operating levels at Washington Works, anticipated earnings growth beyond Q3.

    Sulfuric Acid Price Increase (TT)Ongoing trend, exacerbated by war

    input cost of sulfur increasing

    Mitigation: Helpful from a pricing standpoint, focus on fair trade markets where customers value reliability.

    What to watch in Q3 FY26

    5

    TSS Aftermarket Inventory Normalization

    next quarter (Q3 FY26) and into Q1 2027
    Currentelevated inventory levels
    Targetbeginning to normalize

    Why it matters

    Normalization of aftermarket inventory is crucial for TSS volume recovery and margin improvement, as it currently pressures sales and mix.

    Looking ahead, we would expect the aftermarket to begin normalizing as inventory levels are reduced and seasonal restocking begins ahead of next year's cooling season.

    Q&A highlights

    6

    Why are Q3 TSS margins guided lower (high 20s vs. historical 30%+), and is this a temporary or resetting baseline?

    Shane Hostetter attributed the lower Q3 margins primarily to a less favorable mix due to softer aftermarket sales in residential and light commercial. He stated that the business is still fundamentally a "30-plus margin business" and expects restocking in 2027 to help.

    “I don't look at the margin sequentially from Q2 to Q3. I kind of look at it compared to prior year. Certainly, we'd be guiding to lower margins. And really, this goes hand-in-hand with the discussions we had on the script whereby we're seeing really slower business in the aftermarket, specifically in residential, light commercial in TSS. And that's really a mixed attribute. That's really the predominant driver there.”

    asked by Peter Osterland · answered by Shane Hostetter

    2 min read6 chapters

    Detailed Narrative

    01

    Q2 Performance Highlights

    Chemours reported Q2 results with net sales slightly below expectations, mainly due to softer residential stationary AC demand in TSS. However, Adjusted EBITDA exceeded expectations, driven by strong operational performance and improved product mix in APM, lower corporate costs, and robust pricing in Titanium Technologies. The company emphasized disciplined commercial execution and the positive impact of its Pathway to Thrive strategy.

    02

    TSS Market Dynamics

    The Thermal and Specialized Solutions (TSS) business saw solid Q2 results, but net sales were down year-over-year due to lower volumes from reduced aftermarket sales of Opteon blend in North America. This was partially offset by higher pricing in Freon refrigerants. The aftermarket is experiencing destocking after initial channel fill in 2025 related to the U.S. AIM Act, compounded by higher interest rates and a slower housing market. OEM volumes for Opteon grew year-over-year.

    03

    Titanium Technologies (TT) Resilience

    The TT segment demonstrated strong execution in a challenging, inflationary market. Net sales increased slightly year-over-year, primarily due to global pricing strength, which increased across all regions. Volumes were lower in most key end markets, except for Asian markets (excluding China) and Latin America. Three TiO2 price increases have been announced since December 2025, contributing to approximately a 5% year-to-date price increase.

    04

    Advanced Performance Materials (APM) Transformation

    APM's Q2 net sales were down year-over-year, mainly due to the SPS Capstone line closure in Q3 2025 and higher costs from a resolved Washington Works outage. However, the Performance Solutions portfolio showed strong momentum, with net sales up 8% year-over-year, driven by demand in data center and semiconductor end markets. Over 40% of Performance Solutions sales are now focused on these high-growth markets, and sales into AI infrastructure represent a high single-digit percentage of total APM and TSS sales.

    05

    Balance Sheet and Capital Allocation

    Chemours continued to strengthen its financial position through strong cash generation and disciplined capital allocation. The company repaid nearly $270 million of its 2028 euro term loan in Q2, exceeding prior commitments. Progress was also made in resolving legacy litigation, including settlements with the U.S. EPA and West Virginia DEP, which are seen as de-risking the balance sheet and improving financial flexibility.

    06

    Pathway to Thrive Strategy

    The company is halfway through its Pathway to Thrive strategy, which aims to strengthen its foundation, improve resilience, and create strategic portfolio options. Management highlighted significant progress in de-risking the balance sheet, advancing portfolio transformation, and establishing a stronger operating model through lean principles. The strategy is intended to create greater flexibility for future portfolio actions, with "no portfolio action off the table" to unlock step-change value for shareholders.

    AI-generated summary of the company’s earnings call. Not investment advice.