Ingevity Corporation

Second-quarter sales were $314 million, down 5% reported because of the Road Markings divestiture, but up over 5% excluding that business. Adjusted EBITDA increased 14% to $115 million, and adjusted EBITDA margin expanded to 36.6%; adjusted EPS was $1.74. Free cash flow, excluding a litigation settlement payment, was approximately $89 million, and free cash flow per share was $2.52. For the full year, management raised guidance to adjusted EBITDA of $380 million to $400 million, adjusted EPS of $5.00 to $5.45, and free cash flow of $220 million to $245 million. The company also said net leverage improved to 2.5x, trailing 12-month adjusted EBITDA was approximately $403 million, and capital expenditures were approximately $10 million.

David H. Li said the quarter showed “outstanding execution” and further progress toward a stronger, higher-quality Ingevity. He emphasized portfolio transformation, disciplined capital allocation, and a business mix benefiting from the shift toward hybrid vehicles, which he described as a sustainable trend supporting higher-value carbon solutions. He also highlighted early commercial validation in filtration, saying the first municipal PFAS water treatment contract was an encouraging milestone and that the opportunity could become an important long-term growth driver.

Phillip J. Platt highlighted that adjusted EBITDA rose 14% to $115 million, margins expanded more than 600 basis points to 36.6%, and adjusted EPS reached $1.74. He said free cash flow excluding the litigation settlement was about $89 million, capex was approximately $10 million, and net leverage improved to 2.5x, which is the upper end of the company’s target range. He also noted that the company repurchased $35 million of shares in the quarter, leaving about $211 million available under authorization, and that $10 million of about $20 million in stranded costs had been eliminated through Q2.

Analysts focused on whether planned Performance Materials outages were already included in prior guidance, and management said they were. Questions also centered on second-half margin moderation, pavement demand pressures from higher asphalt prices, and whether filtration is a genuine technology win; management said second-half softness is expected from auto production and outages, asphalt pressure is worse internationally than in North America, and the PFAS contract was won because of technology differentiation rather than price alone. On Advanced Polymer Technologies, management said there is no real seasonality and that the strong quarter benefited from temporary supply disruptions that have now normalized, so results should trend more normally going forward.