Cabot (CBT) Q1 2025 earnings summary

Executive summary

• Adjusted EPS for Q1 FY2025 was $1.76, up 13% year-over-year, with GAAP EPS at $1.67 and EBIT growth in both Reinforcement Materials and Performance Chemicals segments.

• Net income rose to $93 million, up 86% year-over-year, driven by lower Argentina FX losses and higher segment EBIT.

• Strong operating cash flow of $124 million enabled $66 million in shareholder returns via dividends and share repurchases.

• Maintained robust liquidity of $1.3 billion and ended the quarter with $183 million in cash.

• Hosted Investor Day outlining growth strategy and 3-year adjusted EPS CAGR target of 7–10%.

Financial highlights

• Adjusted EPS grew from $1.56 to $1.76 year-over-year; GAAP EPS was $1.67 versus $0.88 prior year.

• Operating cash flow was $124 million; discretionary free cash flow was $114 million; free cash flow after capex was $47 million.

• Capital expenditures were $77 million for the quarter, with full-year guidance of $250–$300 million.

• Returned $66 million to shareholders ($24 million in dividends, $42 million in share repurchases).

• Cash and cash equivalents stood at $183 million; debt balance at $1.2 billion.

Outlook and guidance

• FY2025 Adjusted EPS guidance reaffirmed at $7.40–$7.80, with operating tax rate expected at 27–29%.

• Segment EBIT for both Reinforcement Materials and Performance Chemicals expected to modestly improve sequentially in Q2 FY2025.

• Growth projects on track, including new capacity in Indonesia and China, with material EBIT contribution expected in 2026.

• Guidance does not include potential impacts from new tariffs; minimal direct exposure expected.

• Strong cash generation expected to support continued dividends and share repurchases.