Financial Data and Key Metrics Changes - In Q2 2025, adjusted EBITDA was just under $56 million, exceeding the high end of guidance range [12] - Adjusted free cash flow was a use of $2 million compared to a use of $14 million in 2024, with guidance raised to $70 million to $80 million for the year [17][21] - Net debt leverage ratio rose to 3.5 times from 3.2 times at the end of the prior quarter, primarily due to the acquisition and share repurchases [18][19] Business Line Data and Key Metrics Changes - Ecoservices sales increased by 14% compared to 2024, driven by favorable pricing and the addition of the Wagaman site [5] - Eco Services sales were $176 million, up $22 million year-over-year, with adjusted EBITDA for Eco Services at $49.8 million, unchanged from 2024 [14][15] - Advanced Silicas sales decreased to $24 million from $29 million in the prior year, primarily due to lower custom catalyst sales [15][16] Market Data and Key Metrics Changes - Demand fundamentals for Eco Services remained stable, with high refinery utilization supporting regeneration services [7] - The outlook for virgin sulfuric acid demand remains positive, with expectations for stronger sales in the mining sector as expansion projects come online [7][26] - Sales in the Zeolyst joint venture were projected to be strong, with expectations for hydrocracking catalyst sales to surpass 2024 levels [9][21] Company Strategy and Development Direction - The company closed the acquisition of the sulfuric acid production assets of Cornerstone Chemical Company, with ongoing integration expected to yield meaningful synergies [6] - Focus on emerging technologies for growth opportunities, including advanced silicas for biocatalysis and carbon capture applications [8][26] - The company is taking an opportunistic approach to share repurchases while targeting a long-term leverage ratio of 2 to 2.5 times [19][49] Management's Comments on Operating Environment and Future Outlook - The operating environment remains challenging due to global production overcapacity and pricing pressures, but the company has demonstrated resilience [25] - Anticipated strong sales performance for hydrocracking catalysts in 2025, supported by a substantial order book [26] - The company expects stable demand fundamentals across most end uses for the remainder of the year, with some caution regarding polyethylene sales due to trade uncertainties [20][33] Other Important Information - The company repurchased 2.9 million shares of common stock for approximately $22 million during the quarter [6] - The Kansas City expansion project is expected to support growth in customer demand as expansion projects come online in 2026 and 2027 [8] - The strategic review of the Advanced Materials and Catalysts segment is ongoing, with updates expected in the near future [27] Q&A Session Summary Question: Initial indications from customers regarding new EPA guidelines for renewable fuel volume - Management is encouraged by the new requirements but noted it is still early as the guidelines are draft [30][32] Question: Outlook for polyethylene sales amid trade uncertainty - Management acknowledged global polyethylene utilization rates have been impacted but still expects year-over-year sales growth [33] Question: Update on synergies from the Cornerstone acquisition - Management believes the acquisition will provide additional opportunities and integration is progressing well [37][38] Question: Sensitivity of the business to proposed RVO changes - Management indicated that increased RVO will drive utilization and lead to more frequent catalyst changeouts, translating into growth [52] Question: Visibility on nylon and mining demand - Management expects year-over-year growth in virgin sulfuric acid sales, with strong momentum in mining due to new projects [54][56] Question: Timeline for Wagaman to contribute to free cash flow - Management does not expect significant free cash flow from Wagaman this year but anticipates positive contributions in 2026 [59] Question: Order timing implications for 2026 - Management expects order timing shifts will not materially impact 2026 [64]

Core Insights - United Airlines reported adjusted diluted earnings per share of $3.87, beating analyst estimates by 1.57%, while total revenue of $15.2 billion was slightly below forecasts [1][2] - Domestic passenger revenue softened due to higher expenses and pressure on main cabin fares, but loyalty revenue growth and increased demand in premium cabins contributed positively [1][5] - Management raised full-year adjusted diluted earnings per share guidance, indicating optimism for the remainder of fiscal 2025 [1][11] Financial Performance - Adjusted EPS (Non-GAAP) was $3.87, compared to estimates of $3.81 and down 6.5% from $4.14 in Q2 2024 [2] - Total revenue (GAAP) was $15.24 billion, slightly below the estimate of $15.36 billion, and up 1.7% year-over-year [2] - Net income (GAAP) decreased to $973 million, down 26.4% from $1.32 billion in Q2 2024 [2] - Free cash flow (Non-GAAP) was $1.1 billion, down 38.5% from $1.84 billion in the previous year [2] - Adjusted operating margin (Non-GAAP) was 11.6%, down 1.5 percentage points from 13.1% in Q2 2024 [2] Business Model and Strategic Focus - United Airlines operates a hub-and-spoke system, maximizing connectivity and operational efficiency while focusing on customer loyalty [3] - Recent strategic shifts include growing international presence, expanding loyalty and premium offerings, and investing in sustainability initiatives [4] Operational Highlights - GAAP revenue growth of 1.7% was overshadowed by a 6.5% increase in operating expenses [5] - Domestic passenger revenue declined by 0.7%, while international passenger revenue grew by 3.8%, driven by strong demand in Pacific routes [5][6] - Premium cabin ticket revenue increased by 5.6% year-over-year, and loyalty revenue climbed 8.7% [6] - Operational reliability improved, achieving the best post-pandemic scores for on-time departures [6] Cost and Financial Health - Labor expenses rose by 7.7%, with maintenance costs increasing by 20.8% [8] - The company ended the quarter with $18.6 billion in available liquidity and reduced net leverage to 2.0 times trailing twelve-month earnings [9] - Free cash flow remained positive at $1.13 billion despite a year-over-year decline [9] Future Outlook - Management raised full-year adjusted diluted EPS guidance to a range of $9.00 to $11.00, reflecting improved bookings and stronger business travel demand [11] - Key areas to monitor include domestic revenue trends, labor cost increases, and potential upside from loyalty revenue growth and international strength [12]