Qnity Electronics (NYSE:Q) reported first-quarter financial results on Tuesday. The transcript from the company’s first-quarter earnings call has been provided below.
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Access the full call at https://event.on24.com/wcc/r/5304863/13B583BE38AAAC829D30E77A12130D1F
Summary
Qnity Electronics Inc reported an 18% year-over-year increase in net sales for Q1 2026, with strong performance in both semiconductor technologies and interconnect solutions.
The company highlighted its strategic initiatives, including collaborations with Nvidia and Apple’s American Manufacturing program, and expansion of manufacturing facilities in Delaware and Taiwan.
Future outlook is positive with raised full-year guidance, anticipating net sales of $5.225 billion to $5.375 billion and adjusted EBITDA of $1.535 billion to $1.625 billion, driven by AI-related demand and advanced technology development.
Full Transcript
OPERATOR
Good morning and welcome to the Qnity Electronics Inc first quarter 2026 conference and webcast call. Currently, all callers have been placed in a listen only mode and following management’s prepared remarks, the call will be open for your questions. I will now turn the call over to Meg Miller, Vice President of Global Communications. You may begin. Thank you and welcome to our first quarter 2026 earnings call. I’m joined by John Kemp, Qnity Electronics Inc’s Chief Executive Officer, and Mike Goss, Qnity Electronics Inc’s Interim Chief Financial Officer. Earlier today we issued our earnings release along with the supplemental slide presentation which can be found on our Investor Relations website. Before we begin, I’d like to remind you that today’s discussion will include some forward looking statements. These statements represent our best view of predictions and expectations for the future, but numerous risks and uncertainties may cause actual results to differ. Please refer to our earnings release and SEC filings for a discussion of these risks. We’ll also be discussing certain non GAAP financial measures and I encourage you to read our earnings materials for information regarding our non GAAP financial measures and reconciliations to the most directly comparable GAAP measure. And now it’s my pleasure to turn it over to John Kemp.
John Kemp (Chief Executive Officer)
Thank you for joining this morning. Our strong performance this quarter demonstrates how Qnity Electronics Inc creates value first, through a powerful integrated portfolio, second, a differentiated ability to innovate alongside our customers roadmap and third, leadership in advanced materials that are foundational to the exponential growth in AI and emerging technologies. For decades, Moore’s Law has been the driving force behind technological advancements in the semiconductor industry. Innovation meant shrink smaller transistors and higher density to improve performance and power. Now those gains are increasingly constrained by physical limits. Shrink built the last era stack will define the next. That means even while shrink remains important, we’re moving from 2D design to 3D architectures, stacking chips to unlock the next frontier of computing. That shift from flat to vertical elevates the importance of materials integration and reliability and ultimately redefines where value and leadership are created. This inflection plays directly to Cunity’s strength and how our business segments work together to power the stack. In semiconductor technologies, customers rely on our materials to smooth shape and precisely engineer surfaces at the wafer and device level. This is the foundation of performance yield and reliability. As AI investments accelerate, stacking creates increasingly complex advanced packages and systems with a multiplier in both process steps and material intensity for every additional layer. And the challenge shifts from individual steps at the chip level to managing integration at scale. That’s where Our Interconnect Solutions business Segment builds on SEMI’s work addressing system level constraints like power efficiency, heat management, signal integrity and long term reliability, all while capturing more content as stacks grow taller. Together, Qnity Electronics Inc brings these strengths into one differentiated platform, helping customers build, scale and operate next generation computing platforms. With these unique capabilities, supported by our local for local model that keeps us closely connected to customers around the world, Cunity is well positioned as the partner of choice for many of the industry’s leading fabricators and OEMs pioneering next generation technologies. This advantaged position reinforces our confidence in delivering sustainable long term value for our shareholders. That long term confidence is reflected in our near term execution. Let’s turn to our first quarter results where we delivered our eighth consecutive quarter of strong profitable organic growth. Organic sales increased by 17% versus 2025 with double digit growth across both segments. Adjusted operating EBinformation technologyDA increased by 22% and adjusted earnings per share grew by 33%. These results clearly reflect the ongoing momentum from AI exposed end markets and next generation technologies along with our ability to drive strong operating leverage. In Semi, we grew organic sales 12% year over year driven mostly by advanced nodes led by advanced logic and high bandwidth memory. We also benefited from ongoing improvements in mature nodes and NAND across the board. fab utilization rates continue to improve in line with our expectations as wafer mix continues to shift toward the leading edge. With more advanced nodes we’re well positioned for continued growth driven primarily by increasing content per wafer. Higher node complexity brings more CMP process steps, incremental demand for our most advanced clean and requires increasingly intricate lithography Patterning. Volumes at 3 nanometer continue to scale and we’re starting to see meaningful activity at 2 nanometer. Beyond this, we’re increasingly excited about Angstrom era nodes like 16, 14 and 10, which is the primary focus of our R&D engagement with customers and keeps us tightly aligned to their roadmaps. In ICS, we had an exceptional quarter with organic sales growing 22% year over year driven by content and share gains in advanced packaging and interconnects and thermal management. Advanced packaging is expected to be a core growth driver for years to come as the move from shrink to stack accelerates. As I mentioned earlier, more sophisticated architectures means larger package sizes, higher layer counts and more community content in every device. In advanced interconnects, we’re winning new business with AI, PCB, fab for the leading hyperscalers and premium smartphone OEMs where signal integrity and reliability requirements continue to rise as data center Demand Accelerates Managing heat is a critical objective Our industry leading thermal management portfolio is designed to remove heat across the entire system, supporting increasing content and higher device performance. Our growth momentum is a testament to the depth of our customer relationships and the strength of our innovation engine. We’re in a strong process of record or POR position across both segments due to the investments we’re making in R&D and innovation, giving us visibility into our growth potential over the next few years. Built on decades of partnership, we’ve earned our customers trust and with it comes a clear mandate to innovate and to move fast because in this industry that’s what it takes to win. During the quarter, we underscored that trust through several key announcements, including a new collaboration with Nvidia focused on advancing materials research and development for next gen AI, high performance computing and advanced packaging. By combining our materials expertise with Nvidia’s modeling and simulation capabilities, we’re working to accelerate development and improve manufacturing capabilities. That same commitment to collaboration and execution is reflected in our inclusion in Apple’s American Manufacturing program. Recognizing our role as a long term trusted partner to support customer roadmaps and supply ramps for the most advanced chip, we continue to execute our capital allocation strategy to further bolster manufacturing capacity and strengthen our local for local operating model. In the US we expanded our footprint with the March opening of a 385,000 square foot facility in Delaware. And in Taiwan we announced a new state of the art site with advanced production, clean rooms, warehousing and and R&D labs scheduled to be fully operational in early 2027. These investments significantly expand our manufacturing capacity for critical CMP materials, strengthen our operational agility, ensure …
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