Qnity Electronics, Inc.

Strong execution + profitable growth (beats/comfortably trending): Qnity delivered another quarter of strong performance with net sales $1.4B (+22% YoY, +9% sequential) and organic sales +22% YoY. Adjusted operating EBITDA $431M (+24% YoY) with EBITDA margin 30.2%. Adjusted EPS $1.19 (+53% YoY). Adjusted free cash flow $259M (strong cash conversion). - Semi Technologies: $744M sales (+17% organic YoY); advanced nodes grew >20% in the quarter; utilization improved across the industry (advanced logic mid-80% range; mainstream low-80s; DRAM high-80s; NAND low-80s). - ICS: $685M sales (+28% organic YoY; +16% sequential) with 28% organic growth driven by advanced packaging & interconnect, AI PCBs, thermal management; these 3 platforms grew >50% YoY.

Updated guidance / forecasts (upward revision; Q3 sequential modest growth): Management raised full-year outlook: - Net sales: $5.55B–$5.65B (midpoint implies ~18% YoY growth) - Adjusted EBITDA: $1.675B–$1.725B (midpoint implies >20% YoY growth) - Adjusted EPS: $4.40–$4.60 (midpoint implies ~35% YoY EPS growth) - Adjusted free cash flow: $600M–$700M - Q3 expectations: low single-digit sequential sales growth; Semi low single digits with EBITDA margins mid-30s; ICS mid-single digits with EBITDA margins high-20s. - Q4 note / “why sequential may look muted”: company expects typical seasonal deceleration from Q3→Q4 (consumer electronics) plus inventory control in Q4; also flagged watch items (Middle East developments, ramp timing, utilization trends).

Margin headwinds were manageable; pricing + mitigation expected to offset: - In Q2, margins reflected some headwinds from product mix and continued investment, and ~$20M of logistics/energy-related costs (partly already realized in 1H; remainder expected in 2H). - Management said the “playbook” is working and expects margin profile to remain constructive into the back half; also expects transformation benefits (productivity/throughput and footprint optimization) to provide incremental margin upside—weighted more toward 2H 2027 (incrementals mentioned with longer lead-time).