Quaker Chemical (NYSE:KWR) Q4 2025 Earnings call February 24, 2026 08:00 AM ET Company ParticipantsDavid Begleiter - Managing Director of Equity ResearchJeffrey Schnell - Head of Investor RelationsJonathan Tanwanteng - Managing Director of Equity ResearchJoseph Berquist - President and CEOMichael Harrison - Managing Director of Equity ResearchTom Coler - EVP and CFOConference Call ParticipantsArun Viswanathan - Senior Equity Research AnalystLaurence Alexander - Equity Research AnalystOperatorReminder, this ...

Quaker Chemical (NYSE:KWR) Q4 2025 Earnings call February 24, 2026 08:00 AM ET Speaker7Reminder, this conference is being recorded. I would now like to turn the call over to John Dolloff, Investor Relations. Thank you, Mr. Dolloff. You may begin.Speaker2Thank you. Good morning, and welcome to Quaker Houghton's fourth quarter and full year 2025 earnings conference call. Joining us on the call today are Joe Bergquist, our President and Chief Executive Officer, Tom Coler, our Executive Vice President and Chief ...

Financial Data and Key Metrics Changes - In the second quarter, the company reported net sales of $483 million, a 4% increase from the prior year, with organic volumes increasing by 2% [18] - Adjusted EBITDA was $75.5 million, reflecting a sequential increase of approximately $6 million, with adjusted EBITDA margins at 15.6% [9][20] - Gross margins were slightly lower at 36%, influenced by higher raw material and manufacturing costs, but remained within the target range [9][19] Business Line Data and Key Metrics Changes - The Asia Pacific segment achieved 3% organic sales growth, driven by strong contributions from new business wins and acquisitions, with sales increasing by 20% year over year [21] - The EMEA segment saw net sales growth compared to the prior year and quarter, with organic volumes increasing by 4% sequentially [22] - The Americas segment experienced a 1% decline in net sales year over year, with volumes down 2% [23] Market Data and Key Metrics Changes - The overall market served by the company is estimated to have declined by a low single-digit percentage compared to the prior year, with regional differences noted [7] - Demand uncertainty due to tariffs is impacting overall demand and geographic/product mix [8] Company Strategy and Development Direction - The company is focused on reducing complexity and improving cost structure to support long-term performance [6] - Investments are being made in new manufacturing capabilities and innovation to enhance customer solutions [10][11] - The integration of Dipsol's technology is expected to contribute positively to the company's portfolio [12] Management's Comments on Operating Environment and Future Outlook - Management anticipates that end market softness will persist through 2025, but remains confident in the ability to drive above-market growth [14][15] - The company is taking actions to enhance competitiveness and expects to deliver solid cash flow in 2025 [26][28] - Management expressed confidence in sustaining a long-term growth rate of 2% to 4% despite external market challenges [15][37] Other Important Information - The board approved a 5% increase in cash dividends, marking the sixteenth consecutive annual increase [14] - The company repurchased $33 million of shares and has $68 million remaining on its share repurchase authorization [28] Q&A Session Summary Question: Can you provide more details on the share gains and their sustainability? - Management noted broad-based share gains across all regions, particularly strong in Asia Pacific, and expressed confidence in sustaining a mid-single-digit growth rate into the second half of the year [35][37] Question: What is the outlook for Asia Pacific margins and raw material impacts? - Management indicated that new business wins may initially impact margins but expect stability and modest improvement in the second half, with targeted pricing actions in response to raw material costs [39] Question: What is the expected EBITDA growth cadence for the second half? - Management expects the second half to be stronger than the first, driven by new business wins and cost actions, but does not anticipate significant market improvement [41][46] Question: Can you elaborate on the double-digit growth in advanced products? - Management confirmed that advanced solutions, including Fluid Intelligence, are seeing strong traction and represent about 20% of total revenues, with higher growth rates than the corporate average [53] Question: What are the implications of tariffs on customer inventory and strategy? - Management noted that customers are cautious about building inventory due to uncertainty, but there is potential for positive impacts in North America [63] Question: What changes are being made to the commercial strategy? - Management highlighted improvements in organizational structure and operational efficiency to reduce complexity and enhance growth potential [66]