The Chemours Company (CC) | The Buildout — AI Infrastructure
The Verdict
Chemours is a specialty chemicals maker with three reporting segments. It sells refrigerants used in cooling equipment, titanium dioxide pigment used to deliver whiteness, brightness and opacity, and fluoropolymer resins used in demanding industrial and electronic applications. Its tie to the AI buildout runs through two of those segments: refrigerants sold into data-center chillers, and specialty materials sold into semiconductor fabrication and data-center applications. It also holds an early-stage two-phase immersion-cooling fluid, Opteon 2P50, that is being sampled and qualified rather than sold commercially. That last piece is the option the story increasingly leans on, and today it produces no commercial revenue.
| Market Cap | — |
| Revenue (TTM) | $5.8B |
| Revenue Growth | −1.4% |
| EBITDA Margin (TTM) | -1.1% |
| Net Debt | $3.4B |
| Earnings Beats | 4 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Data center, semiconductor, AI and advanced-electronics end markets are about 9% of combined TSS and APM sales, the CFO said, and more than 40% of Performance Solutions sales target those markets.
- Performance Solutions net sales grew 8% year over year in Q2 2026, even as total APM sales fell on the Capstone line closure and the Washington Works outage.
- Two-phase liquid-cooling trials rose 70% year over year; the NTT 12-month field trial finished with no fluid or equipment degradation, Samsung qualification was announced, and Navin Fluorine signed a manufacturing agreement for Opteon 2P50.
- TT pricing: three TiO2 price increases announced since December 2025, roughly 5% year-to-date local price realization, and a Q3 adjusted EBITDA guide of $70–80 million versus the $40–50 million guided a quarter earlier.
- Balance sheet: close to $270 million of the 2028 euro term loan repaid in Q2, $103 million more than communicated in Q1; Q2 free cash flow conversion above 40% and the full-year guide raised to above 25%.
What We’re Watching
- TSS aftermarket: volumes fell about 25% year over year and management cites a transition pick-up at "end of Q1 2027." A larger competitor described aftermarket mix gains in the second half, and management declined to engage on whether the weakness is destocking or share loss.
- TSS Q3 guide: net sales down mid-teens to 20% sequentially and adjusted EBITDA of $125–140 million, with mix less favorable on lower Opteon aftermarket. Management still stands behind "a 30-plus margin business."
- APM's $30–40 million adjusted EBITDA range is now framed more as a longer-term run-rate; Q3 APM adjusted EBITDA is guided to $20–30 million, including roughly $5 million pulled forward into Q2.
- Legal and regulatory: the North Carolina PFAS settlement is $455 million over 15 years, with Chemours' 50% share about $180 million on a net present value basis and covered by existing accruals; a Cape Fear River PFAS class action is nearing jury trial and securities-fraud investigations were announced in August and September 2026.
The near-term direction reset lower: FY2026 adjusted EBITDA guidance moved from $800–900 million to $775–825 million, and Q3 is guided to a sharp sequential decline on TSS aftermarket destocking. What holds or improves is TT, where pricing and coming ore and chlorine cost changes are doing the work, and the balance sheet, where debt is coming down faster than planned. The long-term story — liquid cooling, next-generation refrigerants, Performance Solutions and a $1 billion adjusted EBITDA ambition — is intact in narrative but not yet in numbers. The open question is whether the TSS aftermarket drawdown is a transition-year timing issue, as management frames it, or the loss of share.
Earnings Beat
The quarter's revenue was $1,591 million, down about 1.5% from $1,615 million a year earlier, with gross margin of 18.0% versus 17.2% in the year-ago quarter. Management said adjusted EBITDA exceeded expectations on APM mix and operational performance, lower corporate costs and TT pricing. The standout negative was TSS, where stationary air-conditioning aftermarket volumes fell about 25% year over year. The company repaid close to $270 million of the 2028 euro term loan in the quarter and reported free cash flow conversion above 40%.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.6B | $1.4B | $1.6B | −1.5% |
| Gross margin | 18.0% | 15.6% | 17.2% | +80bps |
| EBITDA | −$133M | $143M | $152M | −187.5% |
| EPS | $-1.81 | $-0.19 | $-2.54 | −28.7% |
| TSS aftermarket volume | -25% y/y | n/a | n/a | about -25% |
| Performance Solutions net sales | +8% y/y | n/a | n/a | +8% |
Liquid cooling has taken off in data centers… but it's not two-phase. What you see today is the single-phase. So there is not any — today any share in the commercial market. So that's all upside.— Denise Dignam, CEO, The Chemours Company, 2026-08-05
Management tone: Tone shifted between the two calls in the evidence. On TSS, management went from expecting year-over-year growth in the business while being "appropriately cautious on residential demand" to guiding Q3 net sales down mid-teens to 20% sequentially. On TT the framing moved the other way: management said TT "has really outperformed where we expected coming into the year" and raised the Q3 EBITDA guide. The free cash flow conversion guide was moved back up, from above 20% to above 25%, and the leverage target wording shifted from "below 3.8x" to "around 3.8x." A new element was portfolio-optionality language, with the CEO saying no portfolio action is off the table. In Q&A, management was direct on settled points such as the resolved Washington Works permit and the free cash flow ceiling, and reframed or declined on unresolved ones — whether TSS weakness is structural, whether it reflects share loss, and liquid-cooling content per data center.
Management Guidance
For full-year 2026, management guides net sales growth of 1–5% over 2025, adjusted EBITDA of $775–825 million, capital expenditures of $250–280 million, free cash flow conversion above 25%, and a net leverage ratio around 3.8x by year-end. Q3 2026 guidance, initiated on the Q2 call, is consolidated net sales of -5% to flat sequentially. Segment guidance for Q3 is TSS net sales down mid-teens to 20% sequentially with adjusted EBITDA of $125–140 million, TT net sales up low-to-mid single digits sequentially with adjusted EBITDA of $70–80 million, and APM net sales up mid-to-high single digits sequentially with adjusted EBITDA of $20–30 million including roughly $5 million pulled forward into Q2. The assumptions behind it are that aftermarket inventory reduces and seasonal restocking begins ahead of the next cooling season, cited at "end of Q1 2027"; that TT volumes rise year over year in the second half across all end markets outside China; and that structural ore and chlorine cost changes arrive but are not yet visible in earnings.
Trajectory
Trailing twelve-month revenue is $5,797 million with EBITDA of negative $66 million on the reported basis, a figure that includes a negative fourth quarter of 2025 and a negative second quarter of 2026. The near-term direction is down: management cut FY2026 adjusted EBITDA guidance to $775–825 million from $800–900 million and guided Q3 2026 consolidated adjusted EBITDA to $175–205 million, with TSS net sales down mid-teens to 20% sequentially and TSS adjusted EBITDA of $125–140 million. TSS swung from a record first quarter — net sales up 22% year over year at a 33% adjusted EBITDA margin — to slightly down year over year in the second quarter. The offsets are TT, where three price increases since December 2025 produced roughly 5% year-to-date local price and the Q3 EBITDA guide rose to $70–80 million from $40–50 million, and APM, where Performance Solutions net sales grew 8% year over year on backlog conversion. Cash improved: the full-year free cash flow conversion guide was raised to above 25% and second-quarter conversion was above 40%.
The Model
The model projects FY+1 revenue of $5,980 million with EBITDA of $801 million, a 13.4% margin, and FY+2 revenue of $6,344 million with EBITDA of $990 million, a 15.6% margin. FY+1 EBITDA sits inside management's FY2026 adjusted EBITDA guidance of $775–825 million, and FY+1 revenue is about 3% above trailing twelve-month revenue of $5,797 million. The step up to FY+2 rests on the pieces management has pointed to: TSS aftermarket normalization after the cited end-of-Q1-2027 pickup point, APM order-book conversion and the Performance Solutions mix shift, TT structural ore and chlorine cost changes that management says are not yet visible in earnings, and the two-phase liquid cooling and next-generation refrigerant options that management excludes from its current base.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $5.8B | $6.0B | $6.3B |
| YoY Growth | — | +3.0% | +6.1% |
| EBITDA | $242M | $801M | $990M |
| EBITDA Margin | 4.2% | 13.4% | 15.6% |
Projections are the median of 5 independent model runs. The model’s revenue sits 0.1% below analyst consensus.
For full-year 2026, management guides net sales growth of 1–5% over 2025, adjusted EBITDA of $775–825 million, capital expenditures of $250–280 million, free cash flow conversion above 25%, and a net leverage ratio around 3.8x by year-end. Q3 2026 guidance, initiated on the Q2 call, is consolidated net sales of -5% to flat sequentially. Segment guidance for Q3 is TSS net sales down mid-teens to 20% sequentially with adjusted EBITDA of $125–140 million, TT net sales up low-to-mid single digits sequentially with adjusted EBITDA of $70–80 million, and APM net sales up mid-to-high single digits sequentially with adjusted EBITDA of $20–30 million including roughly $5 million pulled forward into Q2. The assumptions behind it are that aftermarket inventory reduces and seasonal restocking begins ahead of the next cooling season, cited at "end of Q1 2027"; that TT volumes rise year over year in the second half across all end markets outside China; and that structural ore and chlorine cost changes arrive but are not yet visible in earnings.
What Could Go Right — and Wrong
- TSS aftermarket restocking arrives on the cited "end of Q1 2027" timeline, moving the segment back toward GDP-plus growth and mid- to high-single-digit annual aftermarket growth.
- Two-phase liquid cooling converts from sampling to commercial orders; management says the product has no commercial share today, so any design-in volume is additive to the base.
- APM drives past the $30–40 million adjusted EBITDA range and data center and semiconductor sales exceed 40% of Performance Solutions.
- TT holds pricing and volumes recover in the second half outside China, with the ore and chlorine structural cost changes showing up in the margin bridge.
- Debt reduction continues at the Q2 pace, leverage moves toward the longer-term goal of sustainably below 3x, and the company announces a portfolio action.
- TSS aftermarket weakness persists past the cited end of Q1 2027 because the problem is share loss rather than channel inventory.
- Chinese TiO2 export volumes keep global supply running ahead of end-market consumption, and TT pricing actions are offset by volume declines.
- APM's recovery stalls and the segment stays below the $30–40 million adjusted EBITDA range.
- Legal and environmental costs escalate — the Cape Fear River PFAS class action reaches trial and the securities-fraud investigations advance.
- Leverage slips from the around-3.8x year-end 2026 target if EBITDA falls short or cash flow is weaker than guided.
Looking Ahead
The next twelve months turn on whether the TSS aftermarket reset proves temporary. Management expects inventory to reduce and seasonal restocking to resume ahead of the next cooling season, with "end of Q1 2027" cited as the pickup point, and guides Q3 TSS adjusted EBITDA to $125–140 million on the way there. TT and APM are expected to improve from the third quarter, and Q4 should not carry the Washington Works inventory and absorption costs. On the AI side, two-phase liquid-cooling capacity is targeted "toward the end of the year" for sampling and process refinement, and the Opteon ZE and Opteon 515B chiller refrigerants launched in August 2026. The balance sheet is the other moving part: the company is targeting net leverage around 3.8x by year-end 2026 and has said it wants to get sustainably below 3x longer term. The remaining Kuan Yin land parcel, targeted for 2026, drew no update on the Q2 call.
- Q3 2026Q3 2026 results — Tests the TSS guide of $125–140M EBITDA and the TT guide of $70–80M.
- End of 2026Two-phase capacity online — Capacity for sampling and process refinement of Opteon 2P50.
- End of Q1 2027Aftermarket restocking — Management's cited pickup point for stationary AC aftermarket demand.
- 2028DeLisle chlorine supply — Long-term supply contract begins, aimed at lower-cost chloride TiO2.
- No date setCape Fear River trial — PFAS class action is nearing jury trial; outcome could add or remove liability.
- No timing givenPortfolio action — CEO says no portfolio action is off the table; no specifics or timing given.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $5.8B | $5.8B | $5.8B | -0.1% |
| Gross Margin | 19.9% | 15.4% | 15.3% | 443bps |
| EBITDA | $741M | $242M | −$66M | -67.3% |
| EBITDA Margin | 12.8% | 4.2% | -1.1% | 859bps |
| Net Income | $79M | −$386M | −$304M | -588.6% |
| Free Cash Flow | −$993M | $51M | $125M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)15.3%
- EBITDA Margin (TTM)-1.1%
- Net Margin (TTM)-5.2%
- ROIC-7.1%
- SBC / Revenue0.4%
The Company
Chemours makes three families of specialty chemicals: refrigerants, titanium dioxide pigment, and fluoropolymer resins. The FY2025 10-K describes a global provider of performance chemicals that are key inputs in end-products and processes, sold into refrigeration and air conditioning, paints and coatings, plastics, transportation, semiconductor and consumer electronics, general industrial, and oil and gas markets. The AI linkage runs through two of the three. Opteon refrigerants go into data-center chillers, and the Performance Solutions portfolio inside Advanced Performance Materials sells specialty materials into semiconductor fabrication and data-center applications, described as addressing "critical needs across the AI infrastructure ecosystem." A third piece — the two-phase immersion-cooling fluid Opteon 2P50 — is at the sampling and qualification stage rather than in commercial sale. Titanium Technologies has no meaningful AI linkage.
The company is vertically integrated in titanium dioxide, operating or leasing its own ore mines and mineral separation plants at Jesup and Nahunta, Georgia; Offerman, Georgia; and Starke, Florida, feeding TiO2 production at New Johnsonville, Tennessee. Fluoropolymers are made at Fayetteville Works in North Carolina and the Washington Works complex in West Virginia, with shared TSS and APM production at the Dordrecht Works complex in the Netherlands and TSS production at Villers St. Paul, France. A long-term chlorine supply contract starting in 2028 will serve the DeLisle site after the company cancelled a planned on-site chlorine project in March 2026. The aim, management says, is to remain one of the lowest-cost chloride TiO2 producers worldwide.
Business Segments
Competitive Landscape
Chemours competes segment by segment, and the 10-K names the field in each. In thermal and specialized solutions the named competitors are Solstice Advanced Materials, Arkema, Orbia, Daikin and Chinese F-gas producers, plus to a certain extent other industrial gas producers. In titanium technologies they are Tronox, LB Group, Kronos Worldwide and INEOS. In advanced performance materials they are Daikin, Syensqo, AGC, Gujarat Fluorochemicals and Dongyue. The live competitive question sits in TSS: an analyst noted that a larger competitor had described aftermarket mix gains in the second half, and management declined to engage, saying only "There's a huge difference in the comparatives." Management's framing is that the aftermarket decline is destocking tied to the prior-year U.S. AIM Act channel fill rather than share loss. In TiO2, an analyst pointed to Chinese exports running ahead of end-market consumption, and management pointed instead to fair-trade markets and its chloride cost position.
- Named in the 10-K as a TSS competitor. Its refrigerants sales were reported at $473M, up 13% year over year, and it said "the aftermarket for HFOs in North America has not kicked in yet." It is developing next-generation two-phase direct-to-chip and immersion cooling molecules.
- Tronox Holdings plcNamed in the 10-K as a TT competitor and referenced by an analyst in the TiO2 discussion; not otherwise discussed.
- LB Group Co. Ltd.Named in the 10-K as a TT competitor. Management said its UK approval had "a small impact," possibly "next year," on assets that are "very high cost to operate."
- Kronos Worldwide, Inc.Named in the 10-K as a TT competitor; not discussed.
- Daikin Industries, Ltd.Named in the 10-K as a competitor in both TSS and APM; not otherwise discussed.
Supply Chain
Chemours buys chlorine, ore and other chemical inputs and sells refrigerants and fluoropolymers to chiller makers, HVAC distributors, semiconductor equipment suppliers and industrial customers. One neighbor has named the company publicly: Olin described a long-term supply deal with Chemours starting in 2028. Most downstream relationships are inferred rather than disclosed.
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