Quaker Chemical (KWR) Q1 2026 earnings summary

Executive summary

• Net sales reached $480.5 million in Q1 2026, up 8–8.5% year-over-year, driven by 3% organic volume growth, 4% from acquisitions, and strong Asia/Pacific performance.

• Adjusted EBITDA increased 5% year-over-year to $72.5–$73 million, with a margin of 15.1%, though margin declined slightly due to higher SG&A.

• Net income was $19.7 million ($1.13 diluted EPS), up from $12.9 million ($0.73) in Q1 2025; non-GAAP EPS was $1.63, a 3% increase.

• New business wins and acquisitions contributed to organic sales growth, offsetting soft end markets.

• Gross margins improved to 36.8%, near the high end of the target range.

Financial highlights

• Gross profit increased to $176.7 million, with gross margin at 36.8%.

• Operating income rose to $33.6 million from $27.6 million year-over-year.

• Net cash provided by operating activities was $3.8–$4 million, improving from a prior year outflow.

• Dividend payments continued, with $8.8–$9 million paid in Q1 2026.

• Adjusted EBITDA margin was 15.1%, slightly down from 15.6% in Q1 2025.

Outlook and guidance

• Sequential volume and revenue growth expected in Q2, driven by seasonality and new business wins.

• Temporary gross margin pressure of 200–300 basis points expected in Q2 due to higher input costs; full margin recovery targeted by year-end.

• Revenue and adjusted EBITDA growth expected for 2026, assuming no significant further market deterioration.

• Ongoing cost savings from transformation programs expected to deliver $20–$30 million annualized by 2028.

• Liquidity considered sufficient for at least the next 12 months, supporting dividends, share repurchases, and growth investments.