Element Solutions raises 2026 adjusted EBITDA guidance to $720 million as third-quarter sales rise 52%

Element Solutions Inc. (ESI) reported record third-quarter results on Wednesday, with net sales of $995.3 million, up 52% from a year earlier. The company also raised its full-year 2026 adjusted EBITDA guidance to approximately $720 million, a regulatory filing showed.

Third-quarter results

Here's how the company did:

• Net sales: $995.3 million vs. $656.1 million a year earlier
• Net income: $65.7 million vs. $39.3 million a year earlier
• GAAP diluted EPS: $0.27 vs. $0.16 a year earlier
• Adjusted EPS: $0.50 vs. $0.41 a year earlier
• Adjusted EBITDA: $191.0 million vs. $146.9 million a year earlier

Net sales rose 52% on a reported basis and 13% on an organic basis. Acquisitions contributed 25 percentage points of the reported growth and pass-through metals pricing 14 points, according to the filing's reconciliation.

Net income rose 67% to $65.7 million from $39.3 million. The net income margin widened 60 basis points to 6.6%.

Adjusted EBITDA rose 30% to $191.0 million, or 29% on a constant currency basis. The adjusted EBITDA margin was 28.2%, up 50 basis points.

Cash flows from operating activities were $159.2 million in the quarter. Free cash flow was $135 million, up from $84.1 million a year earlier.

Guidance raised

The company now expects full-year 2026 adjusted EBITDA of approximately $720 million. The outlook includes full-year contributions from the Micromax and EFC acquisitions and assumes stable exchange rates and metal prices. It also expects adjusted EPS growth of over 20% for the full year.

CEO Benjamin Gliklich said, “Our team continued to execute exceptionally well and delivered another quarter of record results.” He added, “Demand across AI infrastructure and other high-performance electronics applications drove broad-based double-digit organic growth in each of our Electronics verticals.”

Gliklich also said, “Our standalone, independent trajectory has only improved, and, as a result, we are raising our 2026 adjusted EBITDA guidance to approximately $720 million.”

Segment results

Here's how the segments did during the quarter:

• Electronics: net sales up 68% to $780 million, including 30% from acquisitions and 18% organic growth
• Specialties: net sales up 13% to $216 million, including 12% from acquisitions net of divestitures and 1% organic growth

Electronics adjusted EBITDA rose 46% to $148 million, or 45% on a constant currency basis. The filing says the Micromax business had a positive impact of 19% on constant currency adjusted EBITDA growth. Pass-through metals pricing added $94.4 million to Electronics net sales in the quarter.

Specialties adjusted EBITDA fell 6% to $43 million, and the decline was also 6% on a constant currency basis. The EFC Gases & Advanced Materials business had a positive impact of 16% on constant currency adjusted EBITDA growth.

Acquisition, integration and transaction expenses were $21.9 million in the quarter, up from $11.0 million a year earlier. Restructuring expense was $3.3 million, compared with $1.5 million.

Nine-month results

For the nine months, net sales were $2,813.2 million, up 50% from $1,875.0 million, with organic growth of 13%. Net income was $199.0 million, up 8% from $184.8 million. Adjusted EBITDA was $536.8 million, up 31% from $411.3 million, and adjusted EPS was $1.38, against $1.12 a year earlier.

Acquisitions and balance sheet

Acquisitions, net of cash acquired, totaled $864.2 million in the third quarter and $865.8 million for the nine months, the cash flow statement shows.

Cash and cash equivalents were $224.9 million at Sept. 30, down from $626.5 million at Dec. 31, 2025. Total debt was $2,094.7 million, and net debt was $1,869.8 million. The company repurchased $37.7 million of its common stock in the quarter.

Solstice agreement terminated

The company disclosed that it terminated a proposed transaction with Solstice. It entered into an Agreement and Plan of Merger with Solstice on July 6, 2026. On Aug. 27, the two companies signed a termination agreement.

Under that agreement, the parties mutually agreed to end the merger. Subject to customary exceptions, they mutually released each other from claims of liability tied to the deal. The filing does not give the terms of the proposed transaction.

Gliklich said, “I am particularly proud of this quarter's results considering the risk of distraction from the proposed and subsequently terminated Solstice transaction.”