Trinseo (TSE) Q2 Revenue Drops 15%

Key Points

• Non-GAAP EPS loss of $2.12 for Q2 2025 missed estimates by $0.61, This represented a 40.5% larger non-GAAP loss than expected.

• Revenue (GAAP) dropped 14.8% compared to Q2 2024, falling short of forecasts by $55.5 million (GAAP).

• Free cash flow (non-GAAP) was negative $3 million, but improved significantly from last year’s negative $56.1 million (non-GAAP).

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Trinseo Plc (NYSE:TSE), a global materials producer specializing in plastics, latex binders, and engineered materials, reported second quarter 2025 earnings on August 6, 2025. The release revealed a notable downturn in core metrics, with non-GAAP EPS and GAAP revenue both falling short of analyst estimates and prior-year results. Non-GAAP earnings per share (EPS) registered a loss of $2.12, which was $0.61 below consensus expectations. Revenue (GAAP) fell to $784 million, missing the GAAP revenue analyst estimate of $839.8 million and represented a drop from the prior year’s net sales of $920 million (GAAP). Free cash flow (non-GAAP), while still negative, saw a marked improvement compared to Q2 2024, signaling some success in working capital management. Overall, the quarter exposed clear ongoing headwinds, including soft demand and price competition, which weighed heavily on profitability and sales.

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

Company Overview and Focus Areas

Trinseo Plc is a producer of specialty plastics, latex binders for coatings and adhesives, and engineered materials, supplying a global customer base in industries such as automotive, consumer electronics, and construction. Its core business revolves around the manufacturing of polymers and engineered resins that are integral to a variety of products, from car parts to electronic devices and packaging.

Recently, the company has centered its strategy on transformation toward higher-value specialty materials and sustainable solutions. This means moving away from lower-margin, more cyclical businesses like raw styrene chemicals and shifting investment into advanced applications such as engineered materials and CASE (coatings, adhesives, sealants, and elastomers). Key to its future success are profitable specialty segments, recycling technologies, and a global innovation network tailored to customer requirements.

Quarterly Developments and Segment Dynamics

The second quarter showed both GAAP revenue and non-GAAP profits (EPS) falling short of forecasts. Net sales (GAAP) dropped to $784 million, a 14.8% decline compared to Q2 2024, primarily due to lower volume and pricing, especially in the Latex Binders and Polymer Solutions segments. Adjusted EBITDA, a measure of underlying operating performance, decreased 37.7% to $41.6 million (non-GAAP) compared to Q2 2024, well below the Adjusted EBITDA guidance of $55–$70 million issued in the prior quarter.

Adjusted EBITDA slipped less than 3% to $31.1 million compared to Q2 2024, as volume losses were mostly balanced by better product mix and cost savings from restructuring. This relatively resilient outcome in Engineered Materials supports Trinseo’s specialty pivot, as this segment remains a central part of its strategy.

Latex Binders, which deliver the binders used in CASE products and industrial applications, reported GAAP net sales down 19% to $204.2 million. Adjusted EBITDA fell by 34% to $16.8 million compared to Q2 2024, with demand weakness—particularly in paper, board, and textile applications in Asia and Europe—offsetting gains in higher-margin CASE volumes. CASE now makes up 16% of the Latex Binders segment’s revenue. with volumes up 3%, even though overall end markets remained flat or in decline.

Polymer Solutions experienced a 17% revenue drop, with net sales at $286.9 million (GAAP) Adjusted EBITDA (non-GAAP) for Polymer Solutions fell to $5.2 million, down 67% compared to Q2 2024. This segment struggled with lower volumes and tighter margins, mainly due to aggressive price competition from Asian imports, especially in Europe. Driven by lower polystyrene volumes and an unplanned outage.

No significant one-time events outside an unfavorable $10 million net timing item in adjusted EBITDA (non-GAAP) and ongoing restructuring expenses were highlighted. There were no material operational disruptions beyond the AmSty unplanned outage. Dividend payments were $0.9 million.

Outlook and Areas to Watch

Management provided updated, though cautious, full-year guidance. Trinseo forecasts a net loss (GAAP) of $320 million for FY2025, adjusted EBITDA (non-GAAP) of $200 million, and free cash flow (non-GAAP) of negative $165 million. This outlook assumes no improvement in demand or volume in the second half, in line with management’s commentary that recent declines are not considered structural, but driven by external factors such as trade uncertainty and customer hesitancy.

Investors should monitor Trinseo’s progress in reducing inventory and shortening the cash conversion cycle, as well as how its specialty segments, including CASE and consumer electronics solutions, hold up amid broader end-market volatility. The company’s financial flexibility remains limited by negative shareholder equity and high debt, and further progress on its specialty transformation and sustainability projects will be key themes in upcoming quarters. The company did not signal any changes to its minimal dividend policy.

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

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