Solstice Advanced Mat (NASDAQ:SOLS) reported fourth-quarter and full-year 2025 results that management said exceeded expectations, marking the company’s first earnings call following the completion of its spin-off from Honeywell on Oct. 30. Executives highlighted momentum across end markets tied to nuclear energy, AI, data centers, and defense, while also outlining near-term margin headwinds tied to the refrigerants transition and separation-related costs.
Fourth-quarter results: sales growth, margin pressure
For the fourth quarter of 2025, Solstice posted net sales of $987 million, up 8% year over year. Organic sales growth was 6%, including roughly 2.5% from volume and 4% from pricing, plus an additional 2% benefit from foreign currency translation, according to CFO Tina Pierce.
Full-year 2025: sales up, EBITDA down, capital spending ramps
For full-year 2025, Solstice reported net sales of $3.9 billion, up 3% year over year. Pierce said that excluding opportunistic nuclear sales in the first half of 2024 previously discussed at the company’s Investor Day, sales would have been up 6%.
Adjusted standalone EBITDA for 2025 was $957 million, down 4% year over year, with an adjusted EBITDA margin of 24.6%, consistent with the approximately 25% margin framework shared at Investor Day. Management said the year-over-year decline was primarily driven by the ongoing mix and product transition in refrigerants, which more than offset favorable pricing.
Solstice reported full-year net income attributable to the company of $237 million, with Pierce citing higher income tax expense linked to “frictional taxes” associated with the spin-off and interest expense on new separation-related debt.
Capital expenditures totaled $408 million in 2025, up 38% year over year, reflecting increased investment in growth projects. Adjusted standalone EBITDA less CapEx was $549 million, down 21%, and cash conversion ended the year at 57%.
Segment performance: nuclear strength and electronic materials growth
In Refrigerants and Applied Solutions, fourth-quarter net sales were $710 million, up 10% year over year. Segment adjusted EBITDA was $190 million, down 25%, with margin of 26.8% (down 1,225 basis points). Management cited transitory costs, stationary refrigerants mix shifts, and plant downtime/under-absorption, including in healthcare packaging amid customer destocking.
- Refrigerants: Q4 sales rose 20% to $367 million, driven by pricing and volume. Management pointed to aftermarket exposure and diversification, including accelerating demand tied to data centers.
- Nuclear: Q4 sales increased 39% to $111 million, driven by higher volumes and favorable pricing, with management emphasizing a robust backlog.
- Building solutions and intermediates: Q4 sales were $181 million, down 5%, reflecting softness in construction markets.
- Healthcare packaging: Q4 sales fell 25% to $52 million, tied to expected customer destocking; management said order patterns in early 2026 suggest destocking is largely behind them.
Electronic and Specialty Materials reported fourth-quarter net sales of $277 million, up 4% year over year. Segment adjusted EBITDA was $51 million, down 11%, with margin of 18.4%, pressured by plant downtime and transitory costs.
- Electronic materials: Q4 sales grew 19% to $112 million on volume, supported by demand tied to semiconductors, AI, and data centers. CEO David Sewell highlighted “remarkable” leading-edge node demand and emphasized the company’s copper manganese sputtering targets.
- Safety and defense solutions: Q4 sales declined 10% to $43 million, which management attributed to order timing. The company reiterated expectations for long-term growth and said it is expanding capacity for its Spectra products.
- Research and performance chemicals: Q4 sales decreased 3% to $121 million amid softer demand, particularly in specialty additives.
Nuclear business focus: capacity expansion planning and loan repayment headwind
Management devoted significant time to the nuclear conversion business, also referred to as Alternative Energy Services. Sewell said Solstice’s Metropolis Works facility is the only UF6 conversion site in the United States, and the company expects to increase production in 2026 by about 20% over planned 2024 capacity, targeting more than 10 KT of production. He said the facility is “largely contracted through 2030,” supported by $2 billion+ of backlog.
Solstice said it is evaluating additional capacity expansion options and has retained an engineering, procurement and construction provider for initial analysis. In Q&A, Sewell said the company is engaged in customer discussions to assess demand beyond 2030 and that potential expansion could involve “brick-and-mortar new capacity,” though he did not quantify a specific expansion percentage.
Management also described a near-term headwind tied to product loans taken when the facility was idled in 2017. The final loan return is scheduled for the second half of 2026 and is expected to reduce 2026 revenue by about $30 million. On the call, management said the EBITDA impact would be roughly $10 million based on segment margin profiles. Despite the headwind, Sewell said the company expects “low- to mid-single-digit” nuclear growth in 2026, and reiterated expectations for double-digit EBITDA growth CAGR through 2030 based on current backlog and production levels.
Capital allocation and 2026 guidance: dividend initiated, margins expected to recover
Solstice announced the initiation of a quarterly dividend of $0.075 per share. Pierce said year-end 2025 long-term debt was $2.0 billion and cash and equivalents were $534 million, resulting in net debt of about $1.4 billion and net leverage of approximately 1.5x EBITDA. The company also reported $1 billion of revolver availability, bringing total liquidity to roughly $1.5 billion. Management reiterated capital allocation priorities including organic growth investment, maintaining a strong balance sheet, selective M&A, and returning excess capital to shareholders.
For full-year 2026, Solstice guided to:
- Net sales of $3.9 billion to $4.1 billion
- Adjusted EBITDA of $975 million to $1.025 billion
- Adjusted diluted EPS of $2.45 to $2.75
- Capital expenditures of $400 million to $425 million
The outlook assumes a stable macro environment and includes the estimated $30 million revenue impact from the nuclear loan repayment, as well as an approximately $30 million cost impact from transition services agreements (TSAs).
For the first quarter of 2026, the company guided to net sales of $935 million to $985 million and adjusted EBITDA of $235 million to $245 million, implying an adjusted EBITDA margin of about 25%. Pierce said the first-quarter outlook assumes continued momentum in refrigerants, nuclear, and electronic materials, and reflects sequential margin improvement as certain costs roll off, partially offset by year-over-year headwinds from refrigerants mix as the HFO transition continues.
On refrigerants, management said the mix has shifted to being “stronger in HFO sales than HFCs,” describing HFOs as roughly 60% of sales and anticipating an approximate 80/20 HFO/HFC split over the next couple of years. Sewell said the company expects to return to margin neutrality over time as the HFO installed base grows and aftermarket demand builds, with more robust aftermarket contribution anticipated in the second half of 2026.
Management also indicated it plans to host a webinar later in 2026 focused on the nuclear business.
About Solstice Advanced Mat (NASDAQ:SOLS)
Solstice Advanced Materials is a leading global specialty materials company that advances science for smarter outcomes. Solstice offers high-performance solutions that enable critical industries and applications, including refrigerants, semiconductor manufacturing, data center cooling, nuclear power, protective fibers, healthcare packaging and more.
