Core Insights - Perimeter Solutions, SA reported quarterly earnings of $0.82 per share, exceeding the Zacks Consensus Estimate of $0.68 per share, and showing a significant improvement from a loss of $0.61 per share a year ago, resulting in an earnings surprise of +20.59% [1] - The company achieved revenues of $315.44 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 22.50% and increasing from $288.42 million year-over-year [2] - Perimeter Solutions, SA has consistently outperformed consensus EPS estimates over the last four quarters [2] Earnings Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $83.9 million, and for the current fiscal year, it is $1.22 on revenues of $576.07 million [7] Industry Context - The Chemical - Specialty industry, to which Perimeter Solutions belongs, is currently ranked in the bottom 34% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Financial Performance - Third quarter net sales increased by 9% to $315.4 million, compared to $288.4 million in the prior-year quarter[6] - Fire Safety net sales rose by 9% to $273.4 million, while Specialty Products net sales increased by 15% to $42.0 million[6] - Adjusted EBITDA for the third quarter was $186.3 million, reflecting a 9% increase from $170.4 million in the prior-year quarter[6] - The company reported a net loss of $90.7 million, or $0.62 loss per diluted share, compared to a net loss of $89.2 million, or $0.61 loss per diluted share in the prior year[6] - Year-to-date net sales increased by 16% to $550.1 million, compared to $474.7 million in the prior year period[6] - Non-GAAP adjusted earnings per diluted share for the third quarter was $0.82, up from $0.75 in the prior year[6] - The Fire Safety Segment Adjusted EBITDA increased by 13% to $177.2 million, while the Specialty Products Segment Adjusted EBITDA decreased by 29% to $9.1 million[6] Year-to-Date Performance - Year-to-date non-GAAP adjusted earnings per share was $1.24, compared to $0.99 in the prior year[6] - Adjusted EBITDA for the nine months ended September 30, 2025, was $295,738 thousand, compared to $247,420 thousand for the same period in 2024, reflecting a year-over-year increase of 19.5%[27] - For the nine months ended September 30, 2025, the GAAP net loss was $66.14 million, significantly improved from a loss of $150.08 million in the same period of 2024[34] - Adjusted Net Income for the nine months ended September 30, 2025, was $186.78 million, compared to $144.34 million in 2024, indicating a 29.5% increase[34] - Adjusted Earnings Per Share (diluted) for the nine months ended September 30, 2025, was $1.24, up from $0.99 in 2024, marking a 25.3% increase[34] Assets and Liabilities - Total assets increased to $2,645,439 thousand as of September 30, 2025, up from $2,416,394 thousand at December 31, 2024, representing an increase of 9.5%[21] - Total current liabilities rose to $263,646 thousand as of September 30, 2025, compared to $62,488 thousand at December 31, 2024, indicating a significant increase[21] - The total stockholders' equity decreased to $1,111,348 thousand as of September 30, 2025, down from $1,157,270 thousand at December 31, 2024[21] Cash Flow and Expenditures - Cash and cash equivalents at the end of the period were $340,647 thousand, up from $223,053 thousand at the end of September 2024, marking a 52.7% increase[23] - Capital expenditures during the quarter were $5.0 million[8] - The company repurchased common stock amounting to $40,370 thousand during the nine months ended September 30, 2025[23] Expenses - The company reported a depreciation and amortization expense of $53,610 thousand for the nine months ended September 30, 2025, compared to $49,215 thousand for the same period in 2024[23] - The company incurred stock-based compensation expenses of $11,428 thousand for the nine months ended September 30, 2025, compared to $8,048 thousand for the same period in 2024[27] - The company incurred $0.6 million in restructuring and other non-recurring costs for Q3 2025, down from $1.7 million in Q3 2024[31] Advisory Fees and Shares - Founders advisory fees payable increased to $151,582 thousand for the current period, up from $6,677 thousand at the end of the previous year[21] - As of September 30, 2025, a maximum of 2.4 million shares were issuable within 12 months under the Founders fixed advisory fee[29] - A maximum of 10.7 million shares were issuable within 12 months under the Founders variable advisory fee as of September 30, 2025[30] Tax and Adjustments - The tax impact of non-GAAP adjustments for Q3 2025 was a benefit of $53.80 million, compared to a benefit of $1.95 million in Q3 2024[31]

Core Insights - Perimeter Solutions, Inc. reported a net loss of $90.7 million for the third quarter of 2025, with an adjusted net income of $125.5 million [1][5][26] - The company achieved an adjusted EBITDA of $186.3 million, reflecting a 9% increase compared to the previous year [1][5][22] - The loss per diluted share was $0.62, while the adjusted earnings per diluted share improved to $0.82 from $0.75 in the prior year [1][5][26] Financial Performance - Net sales for the third quarter increased by 9% to $315.4 million, compared to $288.4 million in the same quarter last year [5][16] - Fire Safety segment net sales rose by 9% to $273.4 million, while Specialty Products segment net sales increased by 15% to $42.0 million [5][16] - Year-to-date net sales reached $550.1 million, a 16% increase from $474.7 million in the prior year [5][16] Segment Performance - Adjusted EBITDA for the Fire Safety segment increased by 13% to $177.2 million, while the Specialty Products segment saw a 29% decrease to $9.1 million [5][16] - Year-to-date adjusted EBITDA rose by 20% to $295.7 million, with the Fire Safety segment contributing $265.0 million, a 24% increase [5][16] Capital Expenditures and Investments - The company invested $5.0 million in capital expenditures during the third quarter [12] - On September 12, 2025, Perimeter's Specialty Products segment acquired assets and technical data rights for certain product lines for $12.0 million [12] Cash Flow and Liquidity - Cash and cash equivalents at the end of the period were $340.6 million, up from $198.5 million at the beginning of the period [18][21] - Net cash provided by operating activities was $219.5 million for the nine months ended September 30, 2025 [20]

Core Insights - Carillon Tower Advisers reported a continued upward trend in equity markets, driven by AI advancements, reduced inflation from tariffs, and potential interest rate cuts by the U.S. Federal Reserve [1] - The Russell 2000® Growth Index increased by 12.19% in Q3 2025, slightly underperforming the Russell 2000 Value Index, which rose by 12.60% [1] Company Overview: Perimeter Solutions, Inc. (NYSE:PRM) - Perimeter Solutions, Inc. specializes in manufacturing and distributing firefighting products and lubricant additives, with a market capitalization of $3.144 billion as of October 28, 2025 [2] - The stock experienced a one-month return of -4.11% but gained 58.22% over the past 52 weeks, closing at $21.47 per share [2] Performance and Strategic Developments - The stock price of Perimeter Solutions was positively influenced by a strong earnings report, showcasing effective operational execution and contributions from recent acquisitions [3] - A new multi-year agreement with the largest customer in its fire-retardant business was announced, indicating a more stable business model than previously perceived [3] Hedge Fund Interest - Perimeter Solutions was held by 28 hedge fund portfolios at the end of Q2 2025, a decrease from 37 in the previous quarter, indicating a decline in popularity among hedge funds [4] - While the company has potential as an investment, certain AI stocks are viewed as having greater upside potential and lower downside risk [4]

Core Viewpoint - Perimeter Solutions will release its financial results for Q3 2025 on October 30, 2025, before market opening [1] Financial Results Announcement - The company will host a conference call at 8:30 a.m. ET on the same day to discuss the results [2] - The call will be led by CEO Haitham Khouri, CFO Kyle Sable, and Head of Investor Relations Seth Barker [2] - Access to the live webcast will be available on Perimeter's investor relations website [2] Company Overview - Perimeter Solutions is headquartered in St. Louis, Missouri, and operates in the Fire Safety and Specialty Products industries [3] - The company has two operating segments: Fire Safety and Specialty Products [3] - The Fire Safety segment offers fire retardants, firefighting foams, and related specialized equipment and services [3] - The Specialty Products segment focuses on non-fire safety markets, with a significant application in Phosphorus Pentasulfide (P2S5) based lubricant additives [3] - The Specialty Products segment also includes IMS, which manufactures electronic or electro-mechanical components for various end markets, emphasizing aftermarket repair and replacement [3]

Core Insights - The Lazard US Systematic Small Cap Equity ETF (SYZ) has an annualized total return of 3.56% since its inception, outperforming the benchmark Russell 2000 Index, which has a return of -0.04% [1] - The ETF was converted from a mutual fund on September 12, 2023, and has been trading for 17 days as an ETF [1] - The ETF's portfolio consists of 427 small-cap stocks selected through a proprietary automated process, with market caps ranging from $54.5 million to $15.9 billion [6] Investment Opportunities - The ETF's valuation metrics show an average price-to-cash flow ratio of 9.93x, significantly lower than the Russell 2000's 15.07x, and a free cash flow yield of 6.57%, compared to the index's 1.98% [7] - Notable holdings in the ETF include Mueller Industries (MLI), which has nearly doubled its market cap from $5.5 billion to $10.9 billion in 22 months, and is trading at 14.6 times its 2025 earnings per share estimate of $6.75 [9] - Perimeter Solutions (PRM), the ETF's seventh-largest holding, has seen a 73% increase in its stock price in 2025, with sales growth of 26% to $234.7 million in the first half of 2025 [10][11] - Willdan Group (WLDN) has a market cap of $1.4 billion and reported a 27.5% increase in net revenues to $180.3 million in the first half of 2025, with a full-year revenue guidance of $345 million [17][19] Market Context - The ETF's recent performance is set against a backdrop where U.S. stocks experienced a decline for the first time in eight trading sessions, while gold prices reached a record high of over $4,000 [5] - The small-cap sector is gaining attention as large-cap stocks have become expensive, prompting a shift in focus towards smaller companies [4]

Core Insights - Perimeter Solutions has signed a transformative five-year agreement with the USDA, enhancing wildfire response capabilities and providing over $150 million in savings to the federal government and taxpayers [1][12] Company Developments - The contract ensures a full conversion to Perimeter's powder retardant technology and includes significant upgrades to air tanker base capacity and capabilities, transitioning to full-service operations at most federal tanker bases [2] - Under the agreement, 100% of Perimeter's retardant for federal use will be manufactured in the United States, reinforcing support for American manufacturing and supply chain diversification [3] Industry Impact - The partnership aims to modernize the federal fire retardant specification and qualification process, setting new standards for performance, safety, and reliability in wildfire management [5] - The agreement is seen as a commitment to American firefighters and communities, enhancing the operational excellence and fiscal responsibility in wildfire management [4]

Group 1 - Perimeter has increased approximately 6% since the last recommendation three weeks ago, indicating positive market performance [1] - The quarterly results and management commentary provide further support for the initial investment thesis, highlighting operational leverage in Fire Safety and continued growth in Specialty Products [1] - The focus is on small and midcap companies with asymmetric upsides, suggesting a strategic investment approach in these sectors [1] Group 2 - The analyst has a diverse background, having worked in the Industrials and chemicals sector, as well as in finance and technology at a Canadian charity, which enriches the analysis [1] - The combination of execution experience and analytical skills is emphasized as a key factor in enhancing investment insights [1]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 reached $91.3 million, reflecting a 41% increase year-over-year, while year-to-date adjusted EBITDA was $109.4 million, up 42% [4][20][25] - Q2 GAAP loss per share was $0.22 compared to GAAP earnings per share of $0.14 in the prior year quarter, while adjusted EPS for Q2 was $0.39, up from $0.25 [20][21] - Year-to-date GAAP earnings per share improved to $0.16 from a loss of $0.42 in the same period last year [21] Business Line Data and Key Metrics Changes - Fire Safety segment revenue for Q2 was $120.3 million, a 22% year-over-year increase, and year-to-date revenue was $157.4 million, up 27% [16] - Specialty Products segment Q2 net sales were $42.4 million, a 47% increase from the prior year, with year-to-date net sales reaching $77.2 million, up 23% [19] - Fire Safety's adjusted EBITDA for Q2 was $77.7 million, representing a 40% increase over last year, while Specialty Products adjusted EBITDA rose to $13.7 million from $9.3 million in the prior year [18][20] Market Data and Key Metrics Changes - U.S. wildfire activity was approximately normal in the first half of 2025, with expectations that the full season will not be exceptionally mild [18][34] - International operations, including Canada, Europe, the Middle East, and Asia Pacific, contributed positively to revenue growth due to severe conditions [17] Company Strategy and Development Direction - The company aims to provide high-quality products and exceptional service while delivering private equity-like returns with public market liquidity, focusing on three operational pillars: owning exceptional businesses, applying operational value drivers, and decentralized management [5][6][8] - Significant capital investment of nearly $62 million was made in Q2, including capital expenditures, share repurchases, and asset purchases to support the retardant business [4][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of Q2 performance, indicating that there were no one-time factors affecting results [50] - The company is committed to resolving operational challenges at the Saje plant and expects ongoing impacts until control is regained [58] Other Important Information - The company settled litigation with Compass Minerals for $20 million, which included the acquisition of surplus assets and the return of intellectual property [10][59] - Capital expenditures for Q2 were $12.8 million, with a focus on growth and productivity initiatives [24][26] Q&A Session Summary Question: What is the range of normal wildfire activity? - Management indicated that a normal fire season is roughly 6 million to 7 million acres burned in the contiguous U.S., excluding Alaska [32][34] Question: Is there an inverse relationship between revenue per acre burned and acres burned? - Management confirmed that large swings in acres can lead to muted changes in retardant usage due to resource availability and operational factors [38][40] Question: How has resource availability evolved? - Management noted that California has expanded its air tanker fleet, which improves resource availability, and emphasized the importance of contract structures to support resource availability [44][45] Question: How sustainable is the Q2 performance in Fire Safety? - Management stated that Q2 performance is sustainable and not driven by one-time factors [50] Question: What was the impact of the Saje plant outages on financial performance? - Management acknowledged significant impacts from ongoing operational issues at the Saje plant, which are expected to continue until control is regained [58]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 reached $91.3 million, reflecting a 41% increase year-over-year, while year-to-date adjusted EBITDA was $109.4 million, up 42% [4][19][24] - Q2 GAAP loss per share was $0.22 compared to GAAP earnings per share of $0.14 in the prior year quarter, while adjusted EPS for Q2 was $0.39, up from $0.25 [19][20] - Year-to-date GAAP earnings per share improved to $0.16 from a loss of $0.42 in the same period last year [20] Business Line Data and Key Metrics Changes - Fire Safety segment revenue for Q2 was $120.3 million, a 22% year-over-year improvement, and year-to-date revenue was $157.4 million, a 27% gain [15] - Specialty Products segment Q2 net sales were $42.4 million, a 47% increase from the prior year, with year-to-date net sales reaching $77.2 million, up 23% [18] - Fire Safety's adjusted EBITDA for Q2 was $77.7 million, representing a 40% increase over last year, while Specialty Products adjusted EBITDA rose to $13.7 million from $9.3 million in the prior year [17][19] Market Data and Key Metrics Changes - U.S. wildfire activity was approximately normal in the first half of 2025, with expectations that the full season will not be exceptionally mild [17][18] - International operations, including Canada, Europe, the Middle East, and Asia Pacific, contributed positively to revenue growth due to severe conditions [15][16] Company Strategy and Development Direction - The company aims to provide high-quality products and exceptional service while delivering private equity-like returns with public market liquidity [5] - The strategy is built on three operational pillars: owning exceptional businesses, applying operational value drivers, and operating in a decentralized manner [6] - Significant investments were made in capital expenditures, with nearly $62 million allocated in Q2, including the opening of a new retardant production facility in Sacramento, California [4][9][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the normalized fire activity and the operational performance of the business, while remaining prepared for varying conditions [17][18] - The company is committed to resolving operational challenges at the Saje plant and expects ongoing impacts until control is regained [12][55] - Management highlighted the importance of expanding the air tanker fleet to improve resource availability and support fire suppression efforts [39][42] Other Important Information - The company settled litigation with Compass Minerals for $20 million, which included the return of intellectual property and acquisition of surplus assets [10][56] - Capital expenditures for Q2 were $12.8 million, with a focus on growth and productivity initiatives [24][25] - The company repurchased 2.9 million shares for approximately $32 million in Q2, indicating a strategic approach to share repurchases [26] Q&A Session Summary Question: Clarification on normal wildfire activity range - Management confirmed that a normal fire season is roughly in the range of 6 million to 7 million acres burned in the contiguous U.S., excluding Alaska [29][30] Question: Inverse relationship between revenue per acre burned and acres burned - Management acknowledged the complexity of the relationship, noting that large swings in acres can lead to smaller changes in retardant usage due to resource availability [34][39] Question: Sustainability of Q2 Fire Safety performance - Management indicated that the performance in Q2 is sustainable and not driven by one-time factors [47][48] Question: Impact of outages on Specialty Products growth - Management noted that ongoing operational issues at the Saje plant have negatively impacted performance, but the IMS acquisition contributed positively to growth [50][55] Question: Details on the $20 million settlement with Compass - Management confirmed that the settlement included both intangibles and assets valued at approximately $5 million [56] Question: Changes in contract structure with government for fire suppression - Management is working on mutually beneficial changes to de-variabilize the business and improve predictability in cash flows [59][60]