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    NGVT
    Earnings call· Jun 2026(Q2 FY26)

    Ingevity Q2 FY26 earnings call NGVT

    Jul 30, 2026 Source

    Executive summary

    Ingevity Q2 FY26 — Strong Performance, Raised Outlook, and Portfolio Transformation Progress

    Ingevity delivered a strong second quarter, marked by significant adjusted EBITDA and EPS growth, driven by portfolio optimization and operational excellence across all segments. The company raised its full-year outlook, reflecting confidence in its strategy, while continuing to advance the strategic review of Advanced Polymer Technologies and executing on its share repurchase commitment.

    Highlights

    5

    • Sales, excluding the Road Markings divestiture, increased 5% with growth across all 3 segments.

    • Adjusted EBITDA increased nearly 14% to $115 million, with margins expanding to 36.6%.

    • Performance Materials delivered exceptional results with EBITDA margins approaching 54%.

    • Adjusted EPS increased to $1.74, benefiting from stronger operating performance, lower interest expense, and reduced share count.

    • Net leverage improved to 2.5x, reaching the upper end of the target range.

    Concerns

    3

    • Pavement Technologies faced headwinds from softer demand in China and South America due to higher asphalt prices impacting project costs and causing delays.

    • Expected normalization of Performance Materials plant utilization in H2 FY26 due to lower expected auto production and planned maintenance outages.

    • The macroeconomic environment remains dynamic, influencing the cadence of H2 results.

    Guidance & targets

    4
    CategoryTargetConfidence
    Full-year Adjusted EBITDA
    $380 million to $400 million
    high materiality
    High
    Full-year Adjusted Earnings Per Share
    $5.00 to $5.45
    high materiality
    High
    Full-year Free Cash Flow
    $220 million to $245 million
    medium materiality
    High
    Share Repurchase Program
    $300 million
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Performance Materials
    Driven by higher volumes, favorable mix (shift to hybrid vehicles), and annual pricing actions. Strong plant utilization and solid demand. Expects normalization of plant utilization in H2 due to lower auto production and planned maintenance.
    Segment EBITDA: $86 million
    		$161 million4%—53.6% EBITDA margin
    Pavement Technologies
    Renamed from Performance Chemicals. Reported sales declined 22% due to Road Markings divestiture. Excluding divestiture, sales increased due to favorable pricing and volume growth, led by North America. Partially offset by softer demand in China and South America due to higher asphalt prices. EBITDA margin expanded 300 bps ex-Road Markings.
    Segment EBITDA: declined by $3.4 million (reported)Road Markings earnings in prior year: ~$6 millionEvotherm growth: 8% YoY
    		—3% (excluding Road Markings)—24.4% EBITDA margin (excluding Road Markings impact)
    Advanced Polymer Technologies
    Meaningful year-over-year improvement. Benefited from pricing surcharges, improved mix towards higher-value derivative products, higher asset utilization, and absence of 2025 operational downtime. Also benefited from competitor supply disruptions due to Middle East conflict, which has normalized. Strategic alternatives process is in advanced stage.
    Segment EBITDA: $11 million
    		$49 million14%—22.7% EBITDA margin

    Operational metrics

    11
    Adjusted EBITDA
    $115 millionincreased 14% YoY
    Q2 FY26

    Driven by higher pricing, favorable product mix, improved asset utilization and disciplined operational execution.

    Adjusted EBITDA Margin
    36.6%expanded over 600 basis points YoY
    Q2 FY26

    Reflects the earnings power of the portfolio.

    Adjusted EPS
    $1.74increased YoY
    Q2 FY26

    Benefiting from stronger operating performance, lower interest expense and reduced share count.

    Free Cash Flow per Share
    $2.52increased YoY
    Q2 FY26

    Reflects stronger earnings and reduced share count.

    Capital Expenditures
    $10 million
    Q2 FY26

    Remained disciplined.

    Trailing 12-month Adjusted EBITDA
    $403 millionincreased YoY
    TTM Q2 FY26

    Used for net leverage calculation.

    Net Leverage Ratio
    2.5ximproved YoY
    Q2 FY26

    Reached the upper end of target leverage range.

    Share Repurchases
    $35 million
    Q2 FY26

    Part of the $300 million commitment by end of 2027.

    Remaining Share Repurchase Authorization
    $211 million
    Q2 FY26

    Available under current authorization.

    Stranded Cost Elimination
    $10 million
    YTD Q2 FY26

    Costs left over from Industrial Specialties and Road Markings sales. Expected to eliminate at least $15 million of the initial $20 million.

    Asphalt Price Increase
    almost 50%
    Q2 FY26

    Due to higher oil prices, impacting project costs, especially internationally.

    Industry KPIs

    2
    MetricValueDetails
    Volume vs price splitSales increased 5% (ex-Road Markings)%
    Productivity cost savings program$10 millionUSD

    Product announcements

    1
    ProductTypeDetails
    PFAS Filtration Technologymilestone

    Deals & partnerships

    3
    nullSale of Road Markings product line

    Completed on April 15.

    nullSale of Industrial Specialties business

    Completed earlier this year.

    nullStrategic alternatives process for Advanced Polymer Technologies

    Priority remains achieving the best outcome for shareholders while continuing to sharpen strategic focus.

    Risks & headwinds

    5
    Lower North American auto productionH2 FY26

    Expected to be weaker in the back half of the year

    Mitigation: Performance Materials' structural shift to hybrid vehicles (higher value product mix) provides some offset.

    Planned maintenance outages at Performance Materials facilitiesH2 FY26

    Will execute at 2 facilities

    Mitigation: Factored into the updated full-year outlook and expected normalization of plant utilization.

    Dynamic macroeconomic environmentH2 FY26

    Influences the cadence of results

    Mitigation: Company is focused on commercial and operational excellence to maximize value.

    Higher asphalt pricesQ2 FY26 and potentially ongoing

    Up almost 50%

    Mitigation: Impacted international projects more significantly (e.g., China down 80%), less so North America. Evotherm technology continues to gain penetration.

    Normalization of competitor supply disruptionsH2 FY26

    Benefited APT in Q2, now normalized

    Mitigation: APT's improved mix towards higher-value derivative products and higher asset utilization are expected to support performance.

    What to watch in Q3 FY26

    5

    Performance Materials Plant Utilization

    H2 FY26
    CurrentEfficient utilization in Q2 FY26
    TargetNormalization reflecting lower auto production and planned maintenance

    Why it matters

    Impacts segment profitability and overall earnings cadence.

    For the remainder of the year, we expect plant utilization to normalize, reflecting lower expected auto production as well as the execution of planned maintenance outages.

    Q&A highlights

    5

    How to think about short-term margins in PM given expected auto production decline and planned outages, and medium-term impact from PFAS and other opportunities.

    Management expects some short-term pressure in H2 due to softer auto production and planned outages, but the structural shift to hybrids (higher-value carbon solutions) and emerging filtration opportunities are long-term positives for PM margins. Full-year PM margins are expected in the mid-50s.

    “For the remainder of the year, we expect plant utilization to normalize, reflecting lower expected auto production as well as the execution of planned maintenance outages. While this dynamic benefited second quarter profitability, it represents a timing shift that is reflected in our expectations for the back half of this year.”

    asked by Lee Jagoda · answered by David Li

    2 min read6 chapters

    Detailed Narrative

    01

    Portfolio Transformation Progress

    Ingevity is nearing completion of its portfolio transformation strategy, having divested the Road Markings product line in Q2 and Industrial Specialties earlier in the year. These actions aim to improve portfolio quality and sharpen strategic focus on higher-return opportunities. The strategic alternatives process for Advanced Polymer Technologies is also in an advanced stage, with the company prioritizing the best outcome for shareholders.

    02

    Strong Operational Performance

    The company delivered strong commercial and operational performance across all three segments. Excluding divestitures, sales increased 5%, and adjusted EBITDA grew nearly 14% to $115 million, with margins expanding to 36.6%. This performance was driven by higher pricing, favorable product mix, improved asset utilization, and disciplined operational execution.

    03

    Performance Materials Strength

    The Performance Materials segment continued its exceptional profitability, with EBITDA margins approaching 54%. This is largely attributed to a structural shift in consumer buying habits towards hybrid vehicles, which require more advanced and higher-value carbon solutions, contributing to a favorable product mix and sustainable earnings power.

    04

    Emerging Growth Opportunities

    Ingevity is seeing encouraging commercial validation for several organic growth initiatives, particularly in filtration. The company secured its first municipal water treatment contract for PFAS filtration, demonstrating differentiated performance and potential for long-term growth. Other opportunities include warm mix asphalt technologies and energy storage.

    05

    Capital Allocation and Balance Sheet

    The company maintained a disciplined and balanced capital allocation strategy, repurchasing $35 million of shares in the quarter and remaining ahead of pace for its $300 million share repurchase commitment by the end of 2027. Net leverage improved to 2.5x, reaching the upper end of the target range, strengthening financial flexibility.

    06

    Updated Full-Year Outlook

    Due to strong first-half execution, Ingevity raised its full-year adjusted EBITDA guidance to $380 million to $400 million and adjusted EPS to $5.00 to $5.45. The free cash flow guidance low end was also raised to $220 million to $245 million, reflecting improved earnings partially offset by higher inventory levels and seasonal builds.

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