Qnity Raises 2026 Guidance as Q3 Sales Rise 22%

Qnity Electronics, Inc. (NYSE: Q) raised its full-year 2026 guidance across sales, adjusted operating EBITDA, adjusted earnings per share and adjusted free cash flow after reporting double-digit third-quarter growth. The electronics materials company said demand related to advanced semiconductor nodes, advanced packaging, thermal management and artificial-intelligence printed circuit boards supported the performance.

Third-quarter net sales rose 22% to $1.56 billion from $1.28 billion a year earlier, while organic sales also increased 22%. Adjusted operating EBITDA climbed 36% to $503 million from $370 million, lifting the adjusted operating EBITDA margin to 32.3% from 29.0%.

Adjusted EPS increased 55% from the prior-year period. Qnity did not provide the absolute adjusted EPS figures in the presentation. Adjusted gross margin reached 47.8%, an improvement of 270 basis points, which the company attributed to higher volumes, product mix and productivity.

The year-earlier non-GAAP comparisons were presented on a pro forma basis as though Qnity’s spin-off from DuPont de Nemours had occurred on Jan. 1, 2025. Qnity completed the separation on Nov. 1, 2025. Prior-year net sales were derived from carve-out financial statements because the business was not yet operating as a stand-alone company.

Growth Across Both Business Segments

Semiconductor Technologies sales increased 15% to $797 million from $693 million. Adjusted operating EBITDA rose 21% to $285 million, and the segment’s margin expanded to 35.8% from 34.1%. Adjusted gross margin improved 210 basis points to 50.2%.

Advanced-node sales grew 25% and accounted for about 44% of semiconductor-related revenue. Qnity also cited strong performance from Kalrez, its semiconductor-equipment consumables business primarily tied to deposition and etch processes. The company said advanced-node growth produced higher volumes and a more favorable mix.

Interconnect Solutions recorded faster growth, with sales rising 30% to $759 million from $583 million. Adjusted operating EBITDA increased 57% to $236 million, while the adjusted operating EBITDA margin widened to 31.1% from 25.7%. Adjusted gross margin was 45.3%, up 380 basis points.

Qnity said thermal management, advanced packaging and AI PCBs led the segment’s performance, with strength across data centers, industrial applications and premium consumer electronics. New product launches contributed to volume growth and favorable mix.

Management said the company’s broader portfolio and customer engagement were generating additional Process of Record wins. It also pointed to rising Qnity content per device as semiconductor manufacturers adopt technologies that shrink circuitry and stack components.

Full-Year Guidance Increased

Qnity now expects 2026 net sales of $5.77 billion to $5.83 billion, compared with its second-quarter guidance of $5.55 billion to $5.65 billion. The midpoint increased by $200 million.

Full-year adjusted operating EBITDA is projected at $1.785 billion to $1.805 billion, versus the previous range of $1.675 billion to $1.725 billion. Adjusted EPS is expected to be $4.95 to $5.05, up from the prior $4.40-to-$4.60 range.

The company also raised its adjusted free cash flow forecast to between $800 million and $900 million from $600 million to $700 million. Qnity cited strong customer engagement, end-market demand and operating execution in support of the updated outlook.

Additional full-year assumptions include capital expenditures of about $450 million to $470 million, net interest expense of $240 million to $250 million and a non-GAAP base tax rate of approximately 20%. Qnity expects depreciation of $195 million to $200 million, intangible amortization of $200 million to $205 million and a diluted weighted-average share count of about 210.2 million.

The company said organic reinvestment remains its capital-allocation priority, balanced with capability-enhancing acquisitions, leverage management and capital returns.

Qnity did not provide GAAP reconciliations for its forward-looking non-GAAP measures, citing uncertainty and the difficulty of estimating potential adjustments. Risks identified by the company include competition, geopolitical and trade restrictions, international operations, regulatory requirements, the cost and execution of its multi-year transformation plan, and potential liabilities, disputes or unanticipated expenses connected with the DuPont separation.