Quaker Houghton

Second quarter net sales were $533 million, up 10% year over year. Sales volumes increased 7%, selling price and product mix added 1%, and foreign currency added 2%. Gross margin was 35.5%, down year over year and sequentially, and adjusted EBITDA was $85 million with a 16% margin, up 40 basis points year over year. GAAP diluted EPS was $1.55 and non-GAAP diluted EPS was $2.19, up 28% year over year. Cash from operations was $29 million versus $42 million a year ago, and capex was $10 million. For the full year, management expects end markets to be flat to modestly positive in the second half of 2026, third-quarter performance to be in the range of Q2, gross margin to be around Q2 levels in Q3 and back above 36% by year-end, and meaningful revenue plus mid- to high single-digit adjusted EBITDA growth for 2026.

Joe Berquist emphasized that the quarter reflected broad-based share gains, strong execution, and resilience amid raw material inflation and Middle East-related disruption. He said demand remained steady, Asia Pacific continued to lead with double-digit volume growth, and the company’s global manufacturing network helped maintain supply continuity. He also framed the quarter as evidence that cost optimization, pricing actions, and the local-for-local model are supporting a path toward EBITDA margins above 18% over time.

Tom Coler detailed that Q2 net sales were $533 million, gross margin was 35.5%, adjusted EBITDA was $85 million, and adjusted EPS was $2.19. He said gross margin was pressured by higher raw material costs, while SG&A rose about $10 million or 8% year over year, partly offset by early transformation savings. He also noted interest expense of $10 million, a cost of debt of about 4.4% after refinancing, cash from operations of $29 million, capex of $10 million, and full-year capex expected at 2.5% to 3% of sales.

Analysts focused on raw material inflation, the sustainability of volume gains in Asia and EMEA, Americas margin pressure, pricing pass-through timing, and how management is balancing buybacks with bolt-on M&A. Management said base-oil-related inputs remain about two-thirds of the raw material basket and are still volatile, but gross margins should be roughly flat in Q3 and improve later as pricing and index adjustments flow through. On share gains, the company said its 2% to 4% target remains the right long-term range, with current outperformance driven by broad-based new wins, lower churn, and enhanced service offerings such as Fluid Intelligence. On capital allocation, management said buybacks are opportunistic rather than programmatic, with growth investments, the dividend, and M&A all competing for capital within a balanced framework.