Chemours Q2 2026 Earnings Call: Complete Transcript

Chemours (NYSE: CC ) held its second-quarter earnings conference call on Wednesday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

The full earnings call is available at Summary Chemours reported second quarter results with net sales slightly below expectations due to softer demand in Thermal & Specialized Solutions (TSS), but adjusted EBITDA exceeded expectations due to strong operational performance and pricing improvements. Strategic initiatives under 'Pathway to Thrive' have shown tangible progress, with increased pricing actions in Titanium Technologies (TT) and growth in Advanced Performance Materials (APM) through high-value specialty applications.

The company strengthened its financial position through strong cash generation, disciplined capital allocation, and debt reduction, along with resolving legacy litigation to de-risk the balance sheet. Future guidance indicates potential challenges with a sequential decline in TSS sales expected in Q3 due to destocking trends, but anticipates a return to growth supported by OEM base expansion and data center demand. Management emphasized ongoing strategic and portfolio optionality, suggesting openness to transformational partnerships and reshaping the existing portfolio to unlock shareholder value. Full Transcript OPERATOR Good morning.

My name is Therese and I will be your conference operator today. I would like to welcome everyone to the Chemours Company Second Quarter 2026 Results Conference Call. Currently all participants are in a listen-only mode. A question-and-answer session will follow the conclusion of the prepared remarks.

I would like to remind everyone that this conference call is being recorded. I would now like to hand the conference call over to Brandon Ontjes, Vice President and Head of Strategy and Investor Relations for Chemours. You may begin. Brandon Ontjes, Vice President and Head of Strategy and Investor Relations Good morning everybody.

Welcome to the Chemours Company's second quarter 2026 earnings conference call. I'm joined today by Denise Dignam, Chemours President and Chief Executive Officer, and our Senior Vice President, Chief Financial Officer, Shane Hostetter. Before we start, I would like to remind you that comments made on this call as well as in the supplemental information provided on our website contain forward-looking statements that involve risks and uncertainties as described in Chemours' SEC filings. These forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events that may not be realized.

Actual results may differ and Chemours undertakes no duty to update any forward-looking statements as a result of future developments or new information. During this call we'll refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance. A reconciliation of non-GAAP terms and adjustments is included in our press release issued yesterday evening. Additionally, we posted our earnings presentation on our website yesterday evening as well.

With that, I will turn the call over to Denise Dignam. Denise Dignam, President and Chief Executive Officer Thank you, Brandon, and thank you everyone for joining us this morning. On today's call, I'll start with highlights from our recent performance, then turn it over to Shane to walk through our outlook for the third quarter and the balance of 2026. After that, I'd like to share my reflections as we've reached our halfway point under Pathway to Thrive and discuss the opportunities ahead before we open the line for your questions.

For the second quarter, our results reflect disciplined commercial execution, continued pricing actions and progress against our priorities. Across all three businesses, net sales were slightly below expectations, primarily due to softer residential stationary AC demand in Thermal & Specialized Solutions. However, pricing improved across all our businesses, including continued execution in Titanium Technologies. Adjusted EBITDA exceeded expectations supported by stronger operational performance and an improved product mix in Advanced Performance Materials, lower corporate cost, and the pricing strength in TT.

Importantly, we continue to see tangible evidence that the actions we are taking under Pathway to Thrive are strengthening the business. In TT, we announced an additional global TiO2 price increase effective June 1, building on prior pricing actions and supporting local price increases of approximately 5% year to date. Separately, in APM's Performance Solutions portfolio, net sales grew 8% year over year, underscoring the momentum we are building in high value specialty applications for data center and semiconductor end markets as we fulfill a backlog of existing orders.

More recently, we also recorded nominal sales of two—phase liquid cooling products for sampling across two—phase applications with several customers. These early sales support continued progress through product trials, which have increased 70% year over year, while reinforcing the relevance of our innovation pipeline in attractive growth markets. As an indication of the momentum in this space, recent research from the Uptime Institute, an industry-leading authority on data center infrastructure and operations, identified a growing share of operators evaluating two—phase systems for future deployments as AI-driven compute demands accelerate the shift toward liquid cooling.

Additionally, we continue to strengthen Chemours' financial position through strong cash generation and disciplined capital allocation, enabling further debt reduction and enhancing our financial flexibility. S. EPA and the West Virginia Department of Environmental Protection. Collectively, these actions represent important steps to de—risk the balance sheet, improve leverage and cash positioning, while enabling Chemours to invest with discipline in opportunities that support long—term value creation.

Now let me expand on the quarter's business activities. Our TSS business delivered solid second quarter results. Net sales were slightly down versus the prior year quarter, driven by lower volumes from reduced aftermarket sales of Opteon blends in North America. While Opteon OEM volumes saw growth year over year in addition to continued growth into data center end markets in the second quarter, that volume pressure was partially offset by higher pricing supported by strength in Freon refrigerants, primarily in automotive applications.

S. AIM Act. Given our advantaged position in the market, Chemours moved quickly to help ensure distributors and technicians were well supplied to support the new equipment installations. As a result of the initial channel fill, aftermarket customers built additional inventory, creating an oversupplied channel heading into 2026.

Today, while we continue to see strength in the OEM market, the aftermarket is working through elevated inventory levels. At the same time, residential demand is being pressured by higher interest rates, affordability challenges and a slower housing market. Together, these factors weighed on second quarter order activity and may continue to drive destocking as we move through the year. Looking ahead, we would expect the aftermarket to begin normalizing as inventory levels are reduced and seasonal restocking begins ahead of next year's cooling season.

Adjusted EBITDA for TSS increased year over year with margins also expanding. This improvement was driven by higher pricing and benefited from the timing of certain costs in the quarter. Overall, TSS continues to demonstrate the value of disciplined commercial execution and strong margin performance even while facing some near—term weakness in the stationary aftermarket. In Titanium Technologies, the team continued to execute well in a challenging and inflationary market environment.

Second quarter net sales increased slightly versus the prior year quarter, driven primarily by global pricing strength. Pricing increased across all regions, reflecting the discipline and consistency of our commercial pricing approach. In light of a dynamic demand environment, volumes were lower across key end markets with the exception of Asian markets excluding China and Latin America, where demand remained more resilient, in connection with recent antidumping duties in Brazil. Adjusted EBITDA for TT also improved year over year, while adjusted EBITDA margin was flat.

The increase was primarily driven by the global pricing strength noted earlier, partially offset by higher costs from inflation. Importantly, our performance shows that even as inflation continues to pressure the cost structure, the business is responding with strong commercial execution and disciplined cost management, outpacing any inflationary headwinds. We have now announced three TiO2 price increases since December 2025, including our most recent global increase effective June 1. Together, these actions have contributed to an approximately 5% year—to—date price increase relative to where we started the year.

As we look ahead, our team remains agile and responsive with an optimized manufacturing circuit that enhances efficiency and flexibility, enabling us to adjust production levels to meet demand while continuing to deliver outstanding service and quality for our customers. This combination of disciplined pricing, operational flexibility and customer focus positions TT to manage through a dynamic environment and capture value as opportunities emerge. In APM, second quarter net sales were down versus the prior year quarter, primarily driven by lower volumes associated with the SPS Capstone line closure completed in the third quarter of 2025.

This is partially offset by higher pricing in the business. Adjusted EBITDA declined year over year, reflecting the lower sales volumes from the line closure as well as higher costs tied to the now—resolved Washington Works outage. Notably, we continue to see strong momentum in the Performance Solutions portfolio, where net sales increased 8% year over year. Order book strength is driven by long—term sustainable demand tailwinds in data center and semiconductor end markets, where our specialty products play an important role in supporting complex and high—performance applications.

Performance Solutions is becoming a larger part of APM's portfolio, reinforcing our focus on higher value markets with stronger growth and margin potential. As a point of emphasis, our exposure to high growth markets is expanding across Chemours' sales into data center, semiconductor, AI and advanced electronics. End markets now represent a high single—digit percentage of total sales across APM and TSS, supported by strong demand for differentiated solutions in both businesses. Within Performance Solutions, more than 40% of sales are focused on these targeted markets, where we see durable demand trends and robust growth potential in the years ahead.

Importantly, this does not include the investments we are making in liquid cooling and next—generation refrigerants, which we believe will further expand our participation in these attractive growth platforms. Collectively, these dynamics position Chemours to participate more meaningfully in high value applications that we believe can become a meaningful driver of overall earnings over time. With that, I'll turn it over to Shane to walk through our third quarter guide and our updated outlook for the full year 2026. Shane Hostetter, Senior Vice President and Chief Financial Officer Thank you, Denise, and good morning everyone.

As shared in the earnings materials available on our investor website, I would now like to discuss our expectations for the third quarter and the remainder of the year as we look ahead. Beginning with TSS. For the third quarter, we expect TSS's net sales to decline sequentially from the mid—teens to 20%. While we continue to see stability in overall OEM sales, we anticipate softer residential and light commercial aftermarket demand for our Opteon blends during the third quarter, in connection with destocking trends in the aftermarket and broader macroeconomic uncertainty.

Also consistent with our end market concentration, we expect seasonality as we progress through the Northern Hemisphere's cooling season. For the third quarter, we expect TSS's adjusted EBITDA to be between $125 million and $140 million, which considers seasonality as well as a less favorable mix from lower Opteon aftermarket sales. Longer term, as seasonal restocking occurs in the aftermarket and the installed OEM base in residential and light commercial systems continue to expand in North America, we expect the business to return to GDP plus growth.

That growth should also be supported by continued heat pump adoption in Europe as well as rising global demand for data center chiller applications. Overall, despite the softer near term demand backdrop, we remain confident in the long term fundamentals of this business, supported by our advantaged market position with OEMs and aftermarket distributors, regulatory tailwinds and disciplined commercial execution. Going forward, we anticipate the stationary aftermarket to grow annually in the mid to high single digit percentage range.

This, combined with continued advancements in liquid cooling and our next generation refrigerants, will act as growth catalysts for the future in TSS. For our TT business, in the third quarter we expect TT's net sales to increase sequentially in the low to mid single digit percentage range, driven by continued execution of recent pricing announcements on modest year over year volume increases. Also, we expect TT's adjusted EBITDA to range between $70 million and $80 million. This expected improvement reflects the momentum we are seeing from our commercial excellence efforts, which have led to realized pricing gains across the business.

Importantly, this pricing momentum is more than offsetting the cost and inflationary headwinds the business continues to face. It also demonstrates the value of our commercial discipline, customer focus and ability to move quickly as market conditions change. While we anticipate some volume driven seasonality as we exit the year, additionally, we anticipate volumes to be up year over year in the second half across all end markets outside of China. Also, we expect continued cost productivity from operational improvements and broader cost reduction efforts to help keep earnings steep.

Longer term, we remain focused on controlling what we can control. We continue to operate with commercial and operational agility, managing production to demand, optimizing the use of higher cost inventory on hand, which will drive notable earnings and cash flow productivity, and staying disciplined on price to protect value in a dynamic global TIU2 environment. Turning now to our APM business, for the third quarter we expect APM's net sales to increase sequentially in the mid to high single digit percentage range.

This top line improvement is expected to be driven by a return to normal operating levels at Washington Works along with continued strength in the Performance Solutions order book. We expect APM's adjusted EBITDA to be between $20 million and $30 million for the third quarter, which reflects approximately $5 million in performance that was pulled forward into the second quarter given sales timing within Performance Solutions.

As Denise highlighted, we continue to see strong order book momentum for specialty products that address critical needs across the AI infrastructure ecosystem, including data center and semiconductor applications, which we anticipate will exceed 40% of these sales. These end markets are supported by durable demand trends and remain areas where Chemours is well positioned to deliver differentiated material solutions, while broader industrial demand remains mixed. The strength in Performance Solutions reinforces our confidence in APM's path toward higher value growth as we move through the balance of the year.

We expect operational improvements and continued order book fulfillment in Performance Solutions, which will support anticipated earnings growth beyond the third quarter. Longer term, we remain focused on shifting our portfolio mix to Performance Solutions, where we see continued order book strength in high value data center and semiconductor end markets. Our ability to continue to drive operational improvements and sharpen our portfolio will increase our earnings opportunities and drive us past our expected $30 to $40 million adjusted EBITDA range. Looking to our consolidated outlook, we expect third quarter net sales to range from a decrease of 5% to flat sequentially.

This reflects the referenced weaker demand in TSS's stationary aftermarket for Opteon blends, partially offset by continued pricing momentum in TT and sequential sales and cost improvements in APM. Our consolidated adjusted EBITDA is expected to range between $175 million and $205 million for the third quarter. Corporate expenses are expected to be approximately $40 million to $45 million. We also anticipate capital expenditures to be in the range of $65 million, with free cash flow at least $50 million, reflecting the timing of payments for plant turnaround activities commencing later in the third quarter.