Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 30, 2026 · Beat 1 of last 3 quarters
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Solstice's results underscore the breadth of the AI infrastructure buildout, spanning semiconductor materials (sputtering targets, TIMs) and data center thermal management (refrigerants). The company's accelerating electronic materials growth and capacity expansion in Spokane directly serve leading-edge semiconductor demand, while its nuclear and data center cooling businesses address the power and thermal challenges of AI infrastructure. The pending Element Solutions acquisition further deepens exposure to electronics and AI end markets.
Solstice delivered a strong Q2 with net sales of $1.148B, up 11% YoY, and adjusted EBITDA of $290M, up 2% YoY, both above guidance. Growth was broad-based, with 6 of 7 businesses growing and 4 at double-digit rates, led by refrigerants (+13%), nuclear (+27%), healthcare packaging (+24%), and electronic materials (+15%). RAS segment EBITDA declined 6% YoY due to plant turnaround timing and prior-year production incentive credits, while ESM segment EBITDA grew 24% YoY on volume and productivity. The company generated $461M operating cash flow in H1 and $248M free cash flow, and raised full-year guidance.
Management raised full-year 2026 guidance: net sales of $4.125B–$4.185B, adjusted EBITDA of $1.035B–$1.055B, and adjusted EPS of $2.75–$2.95. They also set CapEx guidance at $420M–$440M. For Q3, they guided net sales of $990M–$1.03B, with margins expected around 25% and small sequential margin growth. The company expects continued strength in refrigerants and Electronic Materials, with nuclear softer in the back half due to the final return of product loans (~$30M revenue headwind, skewed to Q4). Management reiterated confidence in mid-30% RAS segment EBITDA margins in H2 as the HFO aftermarket develops, and expects the Element Solutions acquisition to close in H1 2027 with rapid deleveraging to below 3x EBITDA within 18 months post-close.
“The same secular trends powering our results this quarter include artificial intelligence, data centers, semiconductor manufacturing and thermal management are precisely what makes this combination so compelling.”
on Element Solutions acquisition rationale
“We are seeing positive momentum in this business, reinforced by new supply agreements with 3 small modular reactor developers.”
on Nuclear growth
“We are already having initial discussions on are we going to need to do another expansion even beyond this.”
on Electronic materials capacity
In Refrigerants, how do you see sales and EBITDA growth unfolding in the back half of the year? And what kind of margin impact do you expect from incremental unit sales given the transition to HFO?
Management expects continued sequential margin expansion, with mid-30s margins in H2. They noted sequential margin expansion in Q2 over Q1, continued strong demand, and an acceleration from HFCs to HFOs. The aftermarket for HFOs in North America has not yet kicked in, providing additional upside.
I just wanted to ask about the second half guidance. So you gave sales but not EBITDA for 3Q. So I'm not sure why you didn't give that, just considering we don't have a ton of history. So can you help us either with a specific kind of range for 3Q EBITDA or a way to think about phasing just given the moving parts here?
Management said margins have been consistent around 25%, so investors can back into EBITDA from the revenue range. They expect small sequential margin growth in H2.
So I wanted to dig into the RAS margins. Admittedly, they came in a little lighter than we expected in 2Q and yet you're looking for mid-30s in the back half. And that, I think, comes despite that uranium loan giveback. So I guess, can you help unpack the 2Q maybe coming in a little bit on the lighter side and how you get to those mid-30 margins even with that loan giveback, which I would think is at least a little bit of a drag.
Management explained Q2 had heavy plant turnarounds, with one campaign shifted to H2 providing an absorption benefit. Prior-year production incentive credits created a difficult comp, but going forward those will be more linear. Q2 was the most significant outage quarter; fall outages will be minor. They reiterated confidence in mid-30s margins for H2.