Q · Q1 2026 Earnings

Bullish

Qnity Electronics

Reported May 12, 2026

30-second summary

30-second take: Qnity opened FY2026 with $1.315B in revenue (+18% YoY, +10.5% QoQ) and 17% organic growth, with Interconnect Solutions accelerating to +25% YoY versus Semiconductor Technologies at +12% — the advanced-packaging mix thesis is now the dominant driver, not a side narrative. Management issued its initial FY2026 framework with revenue of $5.225B–$5.375B, alongside first-time FY EPS ($3.80–$4.14), FCF ($500M–$600M), and EBITDA ($1.535B–$1.625B) guides. Q1 EBITDA margin of 31.3% clears the ~30% target that was in question last quarter; the setup into the rest of FY2026 is now the inverse of the spin debut — execution is ahead of the narrative.

Headline numbers

EPS

Q1 FY2026

$1.08

Revenue

Q1 FY2026

$1.31B

+18.0% YoY

Gross margin

Q1 FY2026

47.0%

Free cash flow

Q1 FY2026

$0.01B

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$1.31B	+18.0%	$1.19B	+10.5%
EPS	$1.08	—	$0.82	+31.7%
Gross margin	47.0%	—	46.1%	+90bps
Free cash flow	$0.01B	—	—	—

Guidance

Qnity raised full-year FY2026 revenue guidance to $5.225B–$5.375B (+11–14% vs. prior FY2025 guide), backed by strong Q1 organic growth of 17%, 18% YoY revenue growth, and robust 31.3% adjusted EBITDA margin; introduced FY2026 adjusted EPS guidance of $3.80–$4.14 and FCF guidance of $500M–$600M.

Guidance is issued for both next quarter and the full year. Both may appear below.

New guidance

Metric	Period	Guide	YoY
Adjusted EPS (non-GAAP)	FY2026	$3.80 - $4.14	—
Adjusted Free Cash Flow	FY2026	$500M - $600M	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY2026	~$4.7B	$5.225B - $5.375B	+$0.525B - $0.675B (+11.2% - 14.4%)	Raised
Adjusted Operating EBITDA	FY2026	~$1.4B	$1.535B - $1.625B	+$0.135B - $0.225B (+9.6% - 16.1%)	Raised

Segment performance

Q1 FY2026

Segment	Q1 FY2026	YoY
Semiconductor Technologies	$0.722B	+12.0%
Interconnect Solutions	$0.593B	+25.0%
Semiconductor Technologies Adjusted Operating EBITDA	$263M	—
Interconnect Solutions Adjusted Operating EBITDA	$169M	—

Capacity & utilization

Q1 FY2026

Segment	Q1 FY2026
Organic Sales Growth	17%
Equity in Earnings of Nonconsolidated Affiliates	$13M

Profitability

Q1 FY2026

Segment	Q1 FY2026
Adjusted Operating EBITDA	$411M
Adjusted Operating EBITDA Margin	31.3%
Free Cash Flow	$13M

Other KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
Americas	$0.171B	+19.0%
EMEA	$0.102B	+11.0%
Asia Pacific	$1.042B	+18.0%

Management tone

Q4 FY2025 anchor: spin debut, defensive framing → Q1 FY2026 anchor: execution ahead of plan.

The only management commentary available in this release shifts from last quarter's "clear strategic path, operating model and capital allocation plan" — language designed to establish credibility post-spin — to "tremendous start to the year, outperforming our expectations." The lift in EBITDA margin to 31.3% (vs. 29.3% in Q4 FY2025 and a ~30% FY target that was in question) is the substantive backing for the tonal shift; it isn't an adjective change.

A second shift worth flagging: the strategic framing moved from generic "AI demand" language to "growth is increasingly coming from stacking chips and building more complex, integrated systems." This points to advanced-packaging content (the Interconnect Solutions story) as the explicit driver rather than transactional AI exposure — directionally consistent with ICS accelerating to +25% YoY.

No transcript was available for this brief, so this assessment is grounded in the press release language and the segment data; a full prepared-remarks read will follow when available.

Answers to last quarter's watch list

Interconnect Solutions growth sustainability — ICS printed +25% YoY at $593M, a sharp sequential step-up from $529M in Q4 FY2025. The advanced-packaging mix thesis is now the dominant growth driver.

Resolved positively

EBITDA margin step-up to hit ~30% FY — Q1 FY2026 adjusted operating EBITDA margin came in at 31.3%, clearing the ~30% FY target with room (vs. 29.3% in Q4 FY2025). The FY2026 EBITDA guide of $1.535B–$1.625B (midpoint ~30% implied margin on the new revenue range) suggests the step-up is durable, not a Q1 quirk.

Resolved positively

First standalone FY2026 framework — Qnity issued a full FY2026 framework: revenue $5.225B–$5.375B, adjusted EPS $3.80–$4.14, adjusted EBITDA $1.535B–$1.625B, and adjusted FCF $500M–$600M. The breadth (EPS and FCF added vs. last quarter's revenue/EBITDA only) materially upgrades disclosure.

Resolved positively

Sub-segment disclosure within Interconnect (advanced packaging vs. legacy) — no sub-segment splits introduced in this release; ICS remains reported as a single line. The +25% YoY headline is suggestive but not decompositional.

Continue monitoring

Free cash flow conversion — Qnity disclosed Q1 FCF of $28M and introduced a FY2026 FCF guide of $500M–$600M (~10.4% conversion at midpoint). The Q1 print is modest but the FY guide gives an explicit conversion frame to track against.

Resolved positively

What to watch into next quarter

Interconnect Solutions deceleration risk: ICS at +25% YoY is the marquee number; watch whether Q2 FY2026 holds above +20% YoY. A material step-down (below the high-teens) would suggest the Q1 print pulled forward demand rather than reflecting a new run-rate.

EBITDA margin durability above 31%: Q1 at 31.3% beats the implied FY ~30% midpoint. Watch whether Q2 holds above 31% — slippage back toward 29-30% would imply Q1 had one-time leverage that won't repeat.

Q2 FY2026 explicit revenue guide: Qnity did not issue a Q2 standalone guide this quarter. Watch whether next quarter's release introduces a quarterly cadence — its absence here is a disclosure gap for a company that supposedly guides next-quarter-plus-FY.

FCF ramp toward the $500M–$600M FY guide: Q1 printed only $28M, implying a sharp back-half conversion. Watch Q2 FCF — a soft Q2 print would put the FY range at risk and resurface stranded-cost questions.

Sub-segment disclosure within ICS: still not provided. Watch whether advanced packaging is broken out separately — the +25% headline rate makes the bull case, but quantified AI-mix exposure would re-rate the multiple.

Asia Pacific concentration: 79% of revenue from APAC is a geographic risk in any tariff/export-control scenario. Watch for explicit commentary on China-specific exposure within APAC.

Sources

Qnity Electronics Q1 FY2026 press release / supplemental schedules (SEC Exhibit 99.1): https://www.sec.gov/Archives/edgar/data/2058873/000205887326000013/exhibit991supplementalsche.htm
Qnity Electronics Q4 FY2025 press release (prior-quarter baseline): https://www.sec.gov/Archives/edgar/data/2058873/000205887325000018/exhibit991-bupressreleasex.htm

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.