Ingevity reports full year and fourth quarter 2025 financial results

Highlights:

• Strong business performance in 2025 drove higher earnings and robust cash flow, enabling meaningful debt reduction and return of capital to shareholders
• Completed sale of North Charleston crude tall oil refinery assets and the majority of Performance Chemicals Industrial Specialties product line
• Concluded portfolio review and initiated the exploration of strategic alternatives for Advanced Polymer Technologies segment and the Performance Chemicals Road Markings product line

Full Year:

• Total net sales of $1.3 billion, from continuing and discontinued operations, decreased 8% from prior year; net sales from continuing operations of $1.2 billion, down 3% versus prior year
• Net loss of $167.1 million and diluted loss per share of $4.61 driven primarily by $293.1 million in non-cash pre-tax special charges, related to Advanced Polymer Technologies and Road Markings
• Total adjusted earnings of $167.0 million, from continuing and discontinued operations, and total diluted adjusted earnings per share (EPS) of $4.55; adjusted earnings from continuing operations of $151.5 million and diluted adjusted EPS from continuing operations of $4.13
• Total adjusted EBITDA of $397.5 million, from continuing and discontinued operations, improved 10% over last year, with adjusted EBITDA margin of 30.8%. Adjusted EBITDA from continuing operations was $373.0 million, with margin expanding to 31.9%
• Operating cash flow of $331.2 million; free cash flow of $273.5 million; net leverage improved to 2.6 times

Fourth Quarter:

• Total net sales of $278.0 million, from continuing and discontinued operations, declined 7% from prior year; net sales from continuing operations of $255.1 million, down 3% versus prior year
• Net loss of $84.6 million and diluted loss per share of $2.37 largely driven by $109.3 million in pre-tax non-cash special charges related to Road Markings
• Total adjusted earnings of $23.3 million, from continuing and discontinued operations, and total diluted adjusted EPS of $0.64
• Total adjusted EBITDA of $75.0 million, from continuing and discontinued operations; Adjusted EBITDA from continuing operations was $70.3 million, with margin expanding to 27.6%
• Operating cash flow of $97.1 million and free cash flow of $73.5 million

Ingevity Corporation (NYSE:NGVT) today reported its financial results for the full year 2025 and fourth quarter.

The results and guidance in this release include non-GAAP financial measures, several of which present results on a combined basis inclusive of continuing and discontinued operations. Additional information, including definitions and reconciliations to the most comparable GAAP measures, can be found in the section titled "Use of non‑GAAP financial measures." Unless otherwise stated, all comparisons below are made versus the same period in 2024 and are presented on a continuing operations basis.

Full Year 2025 Continuing Operations

Net sales of $1.2 billion declined 2.7%. The decline was driven by softness in Advanced Polymer Technologies, where indirect tariff impacts weighed on demand in key customers' end markets. Performance Materials maintained sales year-over-year despite supply chain disruptions in the auto industry, while the Performance Chemicals Pavement Technologies product line delivered 1% sales growth. The company reported a full year net loss of $150.3 million, which included $336.8 million in pre-tax special charges mainly related to non-cash asset impairments in Advanced Polymer Technologies and Road Markings. Full year adjusted EBITDA of $373.0 million was consistent with 2024, and adjusted EBITDA margin expanded by 50 basis points to 31.9%. Full year diluted loss per share was $4.15 compared to $3.34 in the prior year. Full year diluted adjusted EPS increased 1.7% to $4.13, reflecting resilient underlying business performance.

Fourth Quarter 2025 Continuing Operations

Net sales of $255.1 million declined 3.2%. The decline was driven primarily by lower sales in Advanced Polymer Technologies and Performance Materials, which more than offset growth in Performance Chemicals. The company reported a net loss of $78.8 million and diluted loss per share of $2.21 in the fourth quarter, due largely to $109.3 million of non-cash special charges in Road Markings. Adjusted EBITDA was $70.3 million, a decrease of 12%, driven by lower volumes in both Advanced Polymer Technologies and Performance Materials. Fourth quarter adjusted EBITDA margin was 27.6% with diluted adjusted EPS of $0.58.

"Despite a volatile macro environment, which included tariff uncertainty and supply chain disruptions, Ingevity delivered very strong business and financial results, and our disciplined execution generated robust free cash flow. We also took decisive steps to reshape and optimize our portfolio with the sale of our North Charleston refinery and the majority of our Industrial Specialties product line, as well as the decision to pursue strategic alternatives for Advanced Polymer Technologies and Road Markings. We enter 2026 with momentum and confidence as we continue to drive our strategy to build Ingevity into a premier specialty materials company," said Ingevity President and CEO, David Li.

Segment Results for Full Year and Fourth Quarter Continuing Operations

Performance Materials

Full year sales of $606.9 million were essentially flat with the record prior year performance. Full year segment EBITDA was $326.3 million, down 2%, with segment EBITDA margin of 53.8% versus 54.7% in the prior year. The modest decline in profitability reflected lower global auto production driven by tariff uncertainty and supply chain challenges as well as higher selling, general and administrative (SG&A) expenses. In the fourth quarter, Performance Materials sales were down 3% to $151.2 million due to lower North American volumes resulting from supply chain disruptions in the auto industry. Segment EBITDA for the fourth quarter was $78.0 million, with segment EBITDA margin of 51.6%.

Performance Chemicals Continuing Operations

Full year sales, which excluded Industrial Specialties, were flat year over year at $400.5 million, as pricing actions in Pavement Technologies were offset by competitive price pressure in Road Markings. Also, improved dispersant product mix was offset by lower volumes. Full year segment EBITDA of $60.3 million was up 12.3%, driven by Pavement Technologies pricing actions, favorable dispersant product mix, and lower raw material costs slightly offset by higher SG&A. Fourth quarter sales were $67.4 million, up 6.5% as volume growth driven by an extended paving season benefitting Pavement Technologies and Road Markings was slightly offset by weaker pricing in Road Markings. Segment EBITDA of negative $1.2 million declined as volume growth for the segment was more than offset by weak performance in Road Markings where competitive pricing pressure, lower plant utilization to manage inventory and higher SG&A negatively impacted year over year results.

Advanced Polymer Technologies

Full year sales of $160.2 million declined 15% for the year driven primarily by continued pressure from indirect tariff impacts that depressed demand in customers' end markets. Segment EBITDA for the year was down 18% to $32.1 million due primarily to lower volumes that more than offset gains from operational efficiencies and foreign exchange. Full year segment EBITDA margin was 20.0%. In the fourth quarter, sales were $36.5 million, down 17%. Segment EBITDA declined 21% to $5.5 million with segment margin of 15.1% as lower volumes again more than offset operational efficiencies and favorable foreign exchange.

Corporate and Other

Corporate and other expenses, which are not included in segment financial results, were $31.2 million in 2025 compared to $27.3 million in 2024 driven primarily by higher variable compensation expense reflecting improved business performance. Indirect costs, which represent stranded costs associated with the divested Industrial Specialties product line, were $14.5 million, a decline of $7.6 million primarily due to cost reduction actions executed in the prior year.

Liquidity/Other Continuing and Discontinued Operations

Full year operating cash flow, inclusive of continuing and discontinued operations, was $331.2 million, an increase of $202.6 million year over year, generating free cash flow of $273.5 million. The improvement in cash generation was driven by higher earnings and the absence of cash outflows in 2024 related to the Performance Chemicals repositioning actions.

Share repurchases totaled $56 million for the full year, with $31 million in the fourth quarter. The company ended the year with $297 million remaining capacity under its current share repurchase authorization. Net leverage improved sequentially to 2.6 times from 2.7 times at the end of the third quarter and improved nearly one full turn from 3.5 times at the end of 2024.

Full Year 2026 Outlook:

The company expects full year 2026 net sales between $1.1 billion and $1.2 billion, adjusted EBITDA between $380 million and $400 million and adjusted EPS between $4.80 to $5.20. Free cash flow is expected to be between $225 million and $250 million, excluding approximately $95 million in pre-tax litigation-related payments to BASF. The company intends to utilize the strong free cash flow to reduce leverage and return cash to shareholders in 2026. The 2026 outlook includes full year financial results for Advanced Polymer Technologies and Road Markings but excludes the divested Performance Chemicals Industrial Specialties product line.

Additional Information: The company will host a live webcast on Thursday, February 26, at 10:00 a.m. (Eastern) to discuss fourth quarter and full year 2025 fiscal results. The webcast can be accessed via the investors section of Ingevity's website. Participants may pre-register for the event here.

Participants may also listen to the conference call by dialing 833 470 1428 (inside the U.S.) and entering access code 102386. Callers outside the U.S. can find global dial-in numbers here. For those unable to join the live event, a recording will be available beginning at approximately 2:00 p.m. (Eastern) on February 26, 2026, through February 25, 2027, at this replay link.

Purify, Protect, Enhance

Ingevity (NYSE:NGVT) is a global specialty materials company that develops advanced carbon and engineered material solutions that improve mobility, strengthen and extend the life of infrastructure and enhance industrial processes. With a 90‑year legacy of innovation, we work closely with customers to solve technical challenges and deliver materials that improve performance and environmental outcomes in essential applications. Our portfolio includes Performance Materials activated carbon technologies for emissions control and filtration, Performance Chemicals solutions that support efficient agriculture and high‑performance pavement systems and Advanced Polymer Technologies specialty polymers for coatings and industrial applications. Headquartered in North Charleston, South Carolina, Ingevity operates from 24 locations worldwide and employs approximately 1,500 people. Learn more at ingevity.com.

Use of non-GAAP financial measures: This press release includes certain non‐GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non‐GAAP financial measures to GAAP financial measures are provided within the Appendix to this press release. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided. The company does not attempt to provide reconciliations of forward-looking non-GAAP guidance to the comparable GAAP measure because the impact and timing of the factors underlying the guidance assumptions are inherently uncertain and difficult to predict and are unavailable without unreasonable efforts. In addition, Ingevity believes such reconciliations would imply a degree of certainty that could be confusing to investors.

Forward-looking statements: This press release contains "forward looking statements" within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements generally include the words "will," "plans," "intends," "targets," "expects," "outlook," "guidance," "believes," "anticipates" or similar expressions. Forward looking statements may include, without limitation, the potential benefits of any divestiture, acquisition or investment transaction, leadership transitions within our organization, expected financial positions, guidance, results of operations and cash flows; financing plans; business strategies and expectations; operating plans; capital and other expenditures; competitive positions; growth opportunities for existing products; benefits from new technology and cost reduction initiatives, plans and objectives; litigation-related strategies and outcomes; and markets for securities. Actual results could differ materially from the views expressed. Factors that could cause actual results to materially differ from those contained in the forward looking statements, or that could cause other forward looking statements to prove incorrect, include, without limitation, our ability to adjust our cost and operating structure after giving effect to any transactions that result from our announced review of strategic alternatives for our Road Markings product line and Advanced Polymer Technologies segment; adverse effects from general global economic, geopolitical and financial conditions beyond our control, including inflation, global trade tensions, and the Russia-Ukraine war and conflict in the middle east; risks related to our international sales and operations, including changes in tariffs; adverse conditions in the automotive market; competition from substitute products, new technologies and new or emerging competitors; worldwide air quality standards; a decrease in government infrastructure spending; adverse conditions in cyclical end markets; the limited supply of or lack of access to sufficient raw materials, or any material increase in the cost to acquire such raw materials; issues with or integration of future acquisitions and other investments; risks related to co-located operations; the provision of services by third parties at several facilities; supply chain disruptions; natural disasters and extreme weather events; or other unanticipated problems such as labor difficulties (including work stoppages), equipment failure or unscheduled maintenance and repair; planned and unplanned production slowdowns and shutdowns, turnarounds and outages, attracting and retaining key personnel; dependence on certain large customers; legal actions associated with our intellectual property rights; protection of our intellectual property and other proprietary information; information technology security breaches and other disruptions; complications with designing or implementing our new enterprise resource planning system; government policies and regulations, including, but not limited to, those affecting the environment, climate change, tax policies, tariffs and the chemicals industry; losses due to lawsuits arising out of environmental damage or personal injuries associated with chemical or other manufacturing processes; and the other factors detailed from time to time in the reports we file with the Securities and Exchange Commission (the "SEC"), including those described in Part I, Item 1A. Risk Factors in our most recent Annual Report on Form 10 K as well as in our other filings with the SEC. These forward-looking statements speak only to management's beliefs as of the date of this press release. Ingevity assumes no obligation to provide any revisions to, or update, any projections and forward-looking statements contained in this press release.

Ingevity Corporation

Non-GAAP Financial Measures

Ingevity has presented certain financial measures, defined below, which have not been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and has provided a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP on the following pages. These financial measures are not meant to be considered in isolation nor as a substitute for the most directly comparable financial measure calculated in accordance with GAAP. Investors should consider the limitations associated with these non-GAAP measures, including the potential lack of comparability of these measures from one company to another.

We believe these non-GAAP financial measures provide management as well as investors, potential investors, securities analysts, and others with useful information to evaluate the performance of the business, because such measures, when viewed together with our financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance, liquidity measures, and projected future results.

Ingevity uses the following non-GAAP measures:

Adjusted earnings (loss) from continuing operations is defined as net income (loss) from continuing operations plus restructuring and other (income) charges, net, goodwill impairment charges, long lived asset impairment charge, acquisition and other-related (income) costs, pension and postretirement settlement and curtailment (income) charges, (gain) loss on strategic investments, debt refinancing fees, litigation verdict charges, proxy contest charges, portfolio realignment costs, and the income tax expense (benefit) on those items, less the provision (benefit) from certain discrete tax items.

Adjusted earnings (loss) from discontinued operations is defined as net income (loss) from discontinued operations plus restructuring and other (income) charges, net, goodwill impairment charges, loss on CTO resales, CTO supply contract termination charges, (gain) loss on strategic investments, and the income tax expense (benefit) on those items, less the provision (benefit) from certain discrete tax items.

Total adjusted earnings (loss) is defined as Adjusted earnings (loss) from continuing operations and Adjusted earnings (loss) from discontinued operations.

Diluted adjusted earnings (loss) from continuing operations per share is defined as diluted earnings (loss) from continuing operations per share plus restructuring and other (income) charges, net, per share, goodwill impairment charges per share, long lived asset impairment charge per share, acquisition and other-related (income) costs per share, pension and postretirement settlement and curtailment (income) charges per share, (gain) loss on strategic investments per share, debt refinancing fees per share, litigation verdict charge per share, proxy contest charges per share, portfolio realignment costs per share, and the income tax expense (benefit) per share on those items, less the provision (benefit) from certain discrete tax items per share.

Diluted adjusted earnings (loss) from discontinued operations per share is defined as diluted earnings (loss) from discontinued operations per share plus restructuring and other (income) charges, net, per share, goodwill impairment charges per share, acquisition and other-related (income) costs per share, loss on CTO resales per share, CTO supply contract termination charges per share, (gain) loss on strategic investments per share, and the income tax expense (benefit) per share on those items, less the provision (benefit) from certain discrete tax items per share.

Total diluted adjusted earnings (loss) per share is defined as diluted adjusted earnings (loss) from continuing operations per share and diluted adjusted earnings (loss) from discontinued operations per share.

Adjusted EBITDA from continuing operations is defined as net income (loss) from continuing operations plus interest expense, net, provision (benefit) for income taxes, depreciation, amortization, restructuring and other (income) charges, net, goodwill impairment charges, long lived asset impairment charge, acquisition and other-related (income) costs, litigation verdict charges, (gain) loss on strategic investments, proxy contest charges, portfolio realignment costs, and pension and postretirement settlement and curtailment (income) charges, net.

Adjusted EBITDA from discontinued operations is defined as net income (loss) from discontinued operations plus interest expense, net, provision (benefit) for income taxes, depreciation, amortization, restructuring and other (income) charges, net, goodwill impairment charges, (gain) loss on strategic investments, loss on CTO resales, and CTO supply contract termination charges.

Total adjusted EBITDA is defined as Adjusted EBITDA from continuing operations and Adjusted EBITDA from discontinued operations.

Adjusted EBITDA margin from continuing operations is defined as Adjusted EBITDA from continuing operations divided by Net sales from continuing operations.

Adjusted EBITDA margin from discontinued operations is defined as Adjusted EBITDA from discontinued operations divided by Net sales from discontinued operations.

Total Adjusted EBITDA Margin is defined as Total Adjusted EBITDA divided by Total net sales.

Total Net Sales is defined as Net sales from continuing operations and Net sales from discontinued operations.

Net Debt is defined as the sum of notes payable, short-term debt, current maturities of long-term debt and long-term debt including finance lease obligations less the sum of cash and cash equivalents, restricted cash associated with our new market tax credit financing arrangement, and restricted investment associated with certain finance lease obligations, excluding the allowance for credit losses on held-to-maturity debt securities held within the restricted investment.

Net Debt Ratio is defined as Net Debt divided by the last twelve months Total Adjusted EBITDA.

Free Cash Flow is defined as the sum of net cash provided by (used in) the following items: operating activities less capital expenditures.

Ingevity's management also uses the above financial measures as the primary measures of profitability and liquidity of the business. In addition, Ingevity believes Total Adjusted EBITDA and Total Adjusted EBITDA Margin are useful measures because they exclude the effects of financing and investment activities as well as non-operating activities.

GAAP Reconciliation of 2026 Adjusted EBITDA Guidance

A reconciliation of net income to Total Adjusted EBITDA as projected for 2026 is not provided. Ingevity does not forecast net income as it cannot, without unreasonable effort, estimate or predict with certainty various components of net income. These components, net of tax, include further restructuring and other income (charges), net; additional acquisition and other-related (income) costs; litigation verdict charges; additional pension and postretirement settlement and curtailment (income) charges; and revisions due to legislative tax rate changes. Additionally, discrete tax items could drive variability in our projected effective tax rate. All of these components could significantly impact such financial measures. Further, in the future, other items with similar characteristics to those currently included in Total Adjusted EBITDA, that have a similar impact on the comparability of periods, and which are not known at this time, may exist and impact Total Adjusted EBITDA.

Net Debt Ratio Calculation (Non-GAAP)

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Contact:

Caroline Monahan

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Investors:

Surabhi Varshney

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