Chemours (CC) Q2 EPS Jumps 53%

Key Points

• Chemours exceeded non-GAAP earnings and GAAP revenue expectations in Q2 FY2025, driven by strong demand for Opteon™ refrigerants.

• Substantial litigation and settlement charges led to a GAAP net loss of $381 million despite improved adjusted profitability.

• Management narrowed full-year Adjusted EBITDA guidance from $825 million–$975 million to $825 million–$950 million for FY2025 and maintained the reduced quarterly dividend of $0.0875 per share.

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Chemours (NYSE:CC), a global chemicals manufacturer known for its fluoroproducts and titanium dioxide pigments, announced its results for Q2 2025 on August 5, 2025. The most notable news was a solid beat on both non-GAAP earnings and GAAP revenue expectations, with Adjusted earnings per share (non-GAAP) of $0.58, compared to the analyst consensus of $0.46. Revenue (GAAP) reached $1.6 billion, ahead of the $1.57 billion estimate. Operationally, the quarter saw outperformance in Thermal & Specialized Solutions thanks to Opteon™ refrigerants, and margin gains in Advanced Performance Materials, as measured by Adjusted EBITDA margin. However, a large $381 million net loss (GAAP) overshadowed those gains, primarily due to litigation and environmental settlement costs (GAAP). Overall, it was a mixed quarter: strong underlying business execution was offset by significant one-time legal costs and ongoing pressure in the Titanium Technologies segment.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

What Chemours Does and Where It’s Focused

Chemours manufactures specialty chemicals for a range of industries, including refrigeration, air conditioning, coatings, plastics, and electronics. Its main product lines include refrigerants like Opteon™ and Freon™, titanium dioxide pigments used in paints and plastics, and advanced materials for electronics and hydrogen applications.

The company is focused on five core areas: innovation and technical expertise, sustainability initiatives, market diversification, regulatory compliance, and operational excellence. Recent attention has been on developing low global warming potential refrigerants to comply with tightening environmental standards, improving cost management, and resolving legacy environmental liabilities. Key success depends on maintaining technological leadership, reliable supply, regulatory navigation, and efficient operations.

Inside the Quarter: Segment Results, Growth Drivers, and Challenges

The Thermal & Specialized Solutions segment stood out in the quarter. Net sales for this unit grew 15%, reaching $597 million. Opteon™ refrigerant sales jumped 65% year-over-year as customers transitioned to low global warming potential blends under new U.S. regulations. Opteon™ is a hydrofluoroolefin-based refrigerant with very low global warming potential, which is replacing traditional hydrofluorocarbon-based Freon™. Demand was especially high from the stationary air conditioning market due to the AIM Act regulatory transition. TSS also delivered a 35% Adjusted EBITDA margin, up 4 points (non-GAAP), showing improved pricing power and efficiency. In contrast, Freon™ sales dropped 29% year-over-year as the regulatory shift continued to change the product mix.

Titanium Technologies, which supplies titanium dioxide pigment used in coatings and plastics, remained weak. Revenue (GAAP) dropped 3% to $657 million, and Adjusted EBITDA sank 43% to $47 million. This decline was linked to a 4% drop in global prices and operational disruptions, including a resolved external rail issue and the use of higher-cost feedstock, both of which led to an extra $23 million in costs. The Adjusted EBITDA margin for the Titanium Technologies segment fell by 5 points to 7%, marking a period of severe margin pressure. Management highlighted flat volumes and continued headwinds from global price competition, particularly in markets not protected by fair trade regulation, such as parts of Asia and Latin America.

Advanced Performance Materials had steadier results. The segment’s net sales were $346 million (GAAP), matching the prior-year period. Advanced materials within the segment—a product family that includes fluoropolymers and other high-performance plastics—edged up 1% to $214 million, while overall segment adjusted EBITDA rose 11% to $50 million (non-GAAP). Despite a 6% drop in volume tied to weak demand in hydrogen end markets, stronger pricing (+6%) and portfolio management helped offset some of the decline. Profit margins (Adjusted EBITDA Margin, non-GAAP) improved by 1 percentage point compared to Q2 2024, with the exit of the SPS Capstone™ product line and ongoing cost reductions cited as contributing factors.

The company also recorded a substantial $381 million net loss (GAAP), driven mainly by $257 million in litigation-related charges. Most of this stemmed from the comprehensive settlement with the State of New Jersey over environmental claims, especially those related to per- and polyfluoroalkyl substances, or PFAS. Management expects these payments, netting around $250 million, to be funded over 25 years using insurance proceeds and restricted escrow funds. While this settlement reduces future legal uncertainty, it weighed heavily on reported GAAP earnings.

Operational cash flow (GAAP) was positive at $93 million, reversing the prior year's large cash usage. Free cash flow (non-GAAP) turned positive after the release of restricted cash from an earlier settlement. The company ended the quarter with $1.5 billion of total liquidity, including $502 million in cash and cash equivalents. Still, gross debt reached $4.2 billion as of June 30, 2025, with net leverage holding at 4.7x on a trailing-twelve-month adjusted EBITDA basis, keeping capital flexibility tight.

Chemours continued its focus on innovation. It advanced partnerships to commercialize next-generation two-phase cooling liquids—key for data center and semiconductor cooling. Research and development spending supported new applications for more efficient thermal management solutions. Progress also continued on sustainability initiatives, with sustained ramp-up of Opteon™ production to support the industry’s shift toward environmentally friendly refrigerants.

The quarterly dividend was held at $0.0875 per share, reflecting the significant reduction made earlier in 2025. This move supports balance sheet flexibility as the company copes with ongoing legal settlements, high leverage, and the need to fund targeted capital investments in strategic product areas.

Looking Ahead: Guidance and Investor Watchpoints

For the upcoming third quarter, management projects net sales to decrease 4–6% sequentially and adjusted EBITDA (non-GAAP) to fall to a range of $175–$195 million. These forecasts reflect anticipated refrigerant seasonality, the continued impact of operational disruptions in Titanium Technologies, a planned outage at a U.S. Advanced Performance Materials facility, and margin normalization after the record-setting TSS quarter.

For the full fiscal 2025 year, guidance now calls for net sales of $5.9–6.0 billion and adjusted EBITDA of $775–$825 million, a slight step down from the previous high end of expectations. Management cited temporary segment disruptions and higher costs but expressed confidence in ongoing cost-savings and operational improvement plans. Projected free cash flow conversion for the second half of FY2025 is set at 60–80%.

The quarterly dividend was maintained at $0.0875 per share.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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