DOW · Q2 2026 Earnings

Bullish

Dow Inc.

Reported July 23, 2026

30-second summary

Q2 operating EBITDA of $2.31B beat the ~$2B guide by $312M (+15.6%) on 20% local-price gains, revenue of $12.09B matched the ~$12B guide (missing consensus by 0.5%), and non-GAAP EPS of $1.44 beat the $1.24 consensus by 16.1%. Management raised full-year Transform to Outperform self-help benefits by $200M to >$1.3B and framed the program as "delivering improvements in both growth and productivity" — an active-realization tone versus last quarter's conditional "more upside than downside" hedge. The Middle East supply-shock inflection first flagged in Q1 has now converted to a $2.3B EBITDA print, validating the aggressive Q1 forward call and giving new CEO Karen Carter a clean first-quarter delivery.

Headline numbers

EPS

Q2 FY2026

$1.44

+16.1% vs est.

Revenue

Q2 FY2026

$12.09B

+20.0% YoY

-0.5% vs est.

Free cash flow

Q2 FY2026

$0.69B

Operating margin

Q2 FY2026

13.6%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$12.09B	$10.10B	+19.7%	$9.79B	+23.5%
EPS	$1.44	$-0.42	+442.9%	$-0.14	+1128.6%
Operating margin	13.6%	-0.2%	+1381bps	1.6%	+1200bps
Free cash flow	$0.69B	$-1.13B	+161.1%	$0.62B	+11.4%

Guidance

Dow raised full-year Transform to Outperform self-help benefits by $200M to >$1.3B while beating Q2 EBITDA guidance, though revenue met expectations as volume headwinds offset strong pricing gains.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	approximately $12 billion	$12.092 billion	in-line	Met
Operating EBITDA	Q2 FY2026	$2 billion	$2.312 billion	+$0.312 billion above guide	Beat

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Transform to Outperform self-help benefits	FY2026	approximately $1.1 billion	greater than $1.3 billion in-year benefits	+$0.2 billion incremental	Raised

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Packaging & Specialty Plastics	$6.385B	$5.025B	+27.1%
Industrial Intermediates & Infrastructure	$3.166B	$2.786B	+13.6%
Performance Materials & Coatings	$2.361B	$2.129B	+10.9%

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
U.S. & Canada	$4.782B	$3.988B	+19.9%
EMEAI	$3.93B	$3.272B	+20.1%
Asia Pacific	$1.817B	$1.737B	+4.6%
Latin America	$1.563B	$1.107B	+41.2%
Operating EBIT	$1,648 million	-$21 million	—
Operating EBITDA	$2,312 million	$703 million	—
Operating EBIT Margin	13.6%	—	—
Cash Flow Conversion	57.3%	—	—
Local Price Growth	20%	—	—
Volume Change	-1%	—	—
Currency Impact	1%	—	—
Transform to Outperform Self-Help Benefits (Year-to-date)	>$1.3 billion	—	—

Management tone

Full tone analysis unavailable — no transcript for this brief. The following is drawn from the press-release quotes and cross-quarter guidance framing.

Q3 2025 lower-for-longer → Q4 2025 structural re-engineering → Q1 2026 sharp positive inflection (conditional) → Q2 2026 self-help actively delivering (realized)

The forward framing has moved from conditional to realized. Last quarter management's most assertive line was "we expect more potential upside to these projections than downside" — a hedged statement. This quarter the language is "Transform to Outperform is delivering improvements in both growth and productivity" — an active-tense claim backed by a $200M raise to the in-year benefit figure. When a company converts "we expect upside" to "we are delivering" in a single quarter and layers a raise on top, the implicit signal is that Q1's confidence was well-calibrated and pilots are scaling faster than the initial $500M FY26 T2O estimate assumed.

The self-help narrative is now the primary lever, not the pricing cycle. Q1's story was almost entirely about Middle East supply disruption and polyethylene pricing. This quarter's press release repositions T2O as a durable multi-year story — "the impact of these efforts to ramp significantly throughout the remainder of this year and into 2027." That's the first explicit 2027 self-help reference in coverage. The framing shift matters because it hedges against the geopolitical-tailwind duration risk flagged in Q1: even if Middle East supply normalizes faster than 275 days, the T2O ramp is a separate engine.

No new commentary on Alberta, SADARA, or capital allocation. The absence is itself a data point. Last quarter's watch list flagged Alberta cost transparency, SADARA restructuring outcome, and CEO transition execution as items to track. The press release addresses none of these directly. In a normal print, silence on a $2B+ capex project (Alberta) and a suspended-equity-loss JV (SADARA) mid-restructuring would be notable; here it reads as management choosing to lead with the pricing/self-help beat rather than reopening the harder strategic files under Carter's first quarter.

Answers to last quarter's watch list

Q2 operating EBITDA vs ~$2B guide — Beat by $312M at $2.31B (+15.6%). The 129% sequential EBITDA step-up management implied in Q1 was actually delivered — Q1's $873M to Q2's $2.31B is a 165% sequential step, ahead of the guide. This validates the aggressive forward call and suggests the April 30¢/May 20¢ polyethylene settlements stuck at least as well as management modeled.

Resolved positively

Local price YoY inflection — Delivered decisively. Local price swung from -7% in Q1 to +20% in Q2 — a 27-point positive move and the first positive YoY pricing print in coverage history. This confirms pricing power is portfolio-wide, not packaging-concentrated: P&SP +27%, II&I +14%, PM&C +11% all posted double-digit revenue growth.

Resolved positively

Middle East supply disruption duration — The press release provided no updated timeline. Management's Q2 EBITDA delivery is consistent with the "275+ days" framing holding, and the T2O 2027 language implies continued expectation of tight conditions into next year. No signal of normalization.

Continue monitoring

Transform to Outperform identification cadence — Resolved positively. The FY26 self-help benefit envelope was raised $200M to >$1.3B, with management explicitly citing "approximately $200 million more in benefits from Transform to Outperform this year." This is the first upward revision to the T2O sizing and validates the Q1 read that the $80M first-site identification implied the $2B near-term target was conservative.

Resolved positively

CEO transition execution under Karen Carter — Carter's first quarter as CEO delivered a $312M EBITDA beat, a $200M self-help raise, and a 20% pricing swing. The press-release language ("continue to build a more agile and resilient company that sets a new competitive standard") preserves the Q1 "more upside than downside" posture. No tonal recalibration on capital allocation was disclosed.

Resolved positively

SADARA restructuring outcome — The company didn't disclose a restructuring outcome on the print. Equity-loss recognition status was not addressed in the press release materials.

Continue monitoring

Alberta project cost and capitalized-interest update — Not disclosed on the print. The continued absence of updated Alberta cost transparency across two consecutive quarters supports the read that the 8-10% returns floor is under pressure and management is choosing not to reopen the disclosure.

Not resolved

U.S. & Canada revenue trajectory — Resolved positively. U.S. & Canada swung from -10% YoY in Q1 to +20% YoY in Q2, a 30-point positive move. This confirms Q1's domestic weakness was a one-quarter customer-mix or timing effect, not structural demand deterioration.

Resolved positively

What to watch into next quarter

Whether Q3 FY2026 operating EBITDA sustains near Q2's $2.31B or reverts as the pricing spike normalizes. The absence of a Q3 dollar guide is a meaningful change from Q1's pattern and worth flagging — a print below $1.8B would signal Q2 was the peak; a print at or above $2.0B would validate the multi-quarter durability thesis

Local price YoY: swung to +20% in Q2. Watch whether Q3 sustains double-digit positive pricing or begins to compress as Middle East logistics repair. Any move back below +10% would signal the peak has passed

Middle East supply normalization signals: no update this quarter. Watch for explicit management commentary on Strait of Hormuz logistics, Arabian Gulf tankage clearance, or any restart timeline for damaged infrastructure. Silence for a third consecutive quarter would be notable

Cash flow conversion: dropped from 128.8% in Q1 to 57.3% in Q2 as working capital absorbed the pricing spike. Watch whether Q3 conversion normalizes above 75% or stays depressed, which would indicate the earnings-to-cash lag is structural rather than timing

Alberta and SADARA disclosure: two consecutive quarters of silence on both. A Q3 disclosure on either — cost update, capitalized-interest breakdown, or equity-method treatment — would meaningfully update the strategic picture. Continued silence into Q3 would suggest management is deferring these disclosures to a strategic-review moment

Transform to Outperform cumulative identified savings: FY26 raised to >$1.3B; watch whether the near-term $2B target gets raised at Q3 given the pace of upward revisions and the "into 2027" language in the press release

Asia Pacific revenue: the weakest geography at +5% YoY while other regions posted +14% to +41%. Watch whether Asia Pacific accelerates in Q3 as Middle East supply displacement redirects or whether it lags as regional feedstock tightens further

Sources

Dow Inc. Q2 2026 earnings press release and financial schedules, filed with the SEC: https://www.sec.gov/Archives/edgar/data/1751788/000175178826000144/exhibit991enrschedules2q26.htm
Prior-quarter Tapebrief coverage: DOW Q1 2026, Q4 2025, Q3 2025, Q2 2025

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