10-QPeriod: Q3 FY2025

Air Products & Chemicals, Inc. Quarterly Report for Q3 Ended Jun 30, 2025

Filed July 31, 2025For Securities:APD

Summary

Air Products & Chemicals, Inc. (APD) reported mixed financial results for the third quarter and nine months ended June 30, 2025. While the company saw a modest increase in quarterly sales driven by higher energy cost pass-through and pricing, overall profitability for the nine-month period was significantly impacted by substantial business and asset action charges totaling $3 billion. For the third quarter, net income attributable to Air Products increased by 2% to $713.8 million, or $3.20 per share, reflecting gains from business and asset sales and improved pricing. However, the nine-month period resulted in a net loss of $399.4 million, a stark contrast to the significant profit in the prior year, largely due to the aforementioned restructuring and project exit costs. Investors should note the significant impact of these one-time charges on the year-to-date performance, while recognizing the underlying operational resilience demonstrated in the quarterly results.

Financial Highlights

55 data points
Beta

Revenue

$3.02B

32.5% Gross Margin

Net Income

$713.80M

23.6% Net Margin

EPS (Diluted)

$3.20

Total Assets

$41.66B

Cash & Equivalents

$2.32B

Free Cash Flow

-$640.00M

Financial Statements
Beta
Revenue$3.02B
Cost of Revenue$2.04B
Gross Profit$982.60M
R&D Expenses$24.10M
SG&A Expenses$222.60M
Operating Income$790.60M
Net Income$713.80M
EPS (Basic)$3.20
EPS (Diluted)$3.20
Shares Outstanding (Basic)222.80M
Shares Outstanding (Diluted)222.90M

Key Highlights

  • 1Q3 2025 sales increased 1% to $3.02 billion, driven by higher energy cost pass-through and pricing, partially offset by lower volumes.
  • 2Q3 2025 net income attributable to Air Products increased 2% to $713.8 million ($3.20/share), aided by gains from business and asset sales.
  • 3Nine months ended Q3 2025 resulted in a net loss of $399.4 million ($1.79/share), a significant downturn from the $1.88 billion profit in the prior year, primarily due to $3 billion in business and asset action charges.
  • 4Operating income for Q3 2025 increased 7% to $790.6 million, boosted by business and asset sale gains and improved non-helium merchant pricing.
  • 5Significant charges for business and asset actions amounted to $2.95 billion for the nine months ended Q3 2025, largely related to project exits and cost reductions.
  • 6The company acquired Ijsfabriek Strombeek in Belgium for $74.2 million and divested a subsidiary in Singapore for proceeds of $104.3 million, recognizing a gain of $67.3 million.
  • 7Capital expenditures increased to $4.0 billion for the nine months ended Q3 2025, primarily for clean energy projects and core industrial gas business investments.

Frequently Asked Questions

The substantial net loss of $399.4 million for the nine months ended June 30, 2025, was primarily driven by significant charges related to business and asset actions, totaling $2.95 billion. These charges included project exit costs stemming from a review of the company's project backlog and decisions to exit certain clean energy generation and distribution projects, along with costs associated with a global cost reduction plan. These one-time charges significantly impacted the company's year-to-date profitability.

In the third quarter of fiscal year 2025, Air Products reported a 1% increase in sales, reaching $3.02 billion. This growth was primarily attributable to a 3% increase in energy cost pass-through to customers and a 1% rise in pricing. However, this was partially offset by a 4% decrease in volumes, influenced by the divestiture of the LNG business, lower global helium demand, and project exits.

The NEOM Green Hydrogen Company (NGHC) joint venture is a significant ongoing project. As of June 30, 2025, NGHC had borrowed $4.6 billion under its non-recourse project financing. The company consolidated NGHC and its financial activities are reflected in the Middle East and India segment. While the project financing is non-recourse to Air Products, the company has made significant capital expenditures related to it, with 'Additions to plant and equipment' for the nine months ending June 30, 2025, including $1.98 billion in NGHC expenditures not funded by Air Products' equity. The company's overall capital expenditures for the nine months increased to $4.0 billion, partly due to these clean energy projects.

Yes, Air Products completed the acquisition of Ijsfabriek Strombeek, a Belgian industrial gases company, for $74.2 million in April 2025. Additionally, the company divested its 100% ownership interest in a consolidated subsidiary in Singapore in April 2025, receiving $104.3 million in proceeds and recognizing a gain of $67.3 million. The company also sold a regional office in Hersham, England, for $37.7 million, recognizing a gain of $31.3 million.