10-QPeriod: Q1 FY2026

Air Products & Chemicals, Inc. Quarterly Report for Q1 Ended Dec 31, 2025

Filed January 30, 2026For Securities:APD

Summary

Air Products & Chemicals, Inc. (APD) reported a strong first quarter for fiscal year 2026, with net income attributable to Air Products increasing by 10% to $678.2 million, or $3.04 per diluted share, compared to $617.4 million, or $2.77 per diluted share, in the prior year. This growth was driven by a 6% increase in sales, reaching $3.1 billion, attributed to higher energy cost pass-throughs, favorable currency movements, and improved pricing for non-helium products. The company demonstrated effective cost management, with cost of sales increasing at a slightly lower rate than sales and a reduction in selling and administrative expenses as a percentage of sales. The company continued to make progress on its strategic initiatives, including investments in clean energy. The NEOM Green Hydrogen Project remains a significant undertaking, with ongoing project financing draws. Management also highlighted ongoing cost reduction efforts and a continued commitment to returning capital to shareholders through dividends, with a recent increase approved. While the company faced some headwinds such as lower helium demand and the impact of a prior year non-recurring helium sale, overall performance indicates a positive start to the fiscal year.

Financial Highlights

52 data points
Beta

Revenue

$3.10B

32.1% Gross Margin

Net Income

$678.20M

21.9% Net Margin

EPS (Diluted)

$3.04

Total Assets

$41.24B

Cash & Equivalents

$1.03B

Free Cash Flow

-$350.50M

Financial Statements
Beta
Revenue$3.10B
Cost of Revenue$2.11B
Gross Profit$995.00M
R&D Expenses$20.40M
SG&A Expenses$228.70M
Operating Income$734.50M
Net Income$678.20M
EPS (Basic)$3.04
EPS (Diluted)$3.04
Shares Outstanding (Basic)222.80M
Shares Outstanding (Diluted)222.90M

Key Highlights

  • 1Net income attributable to Air Products increased by 10% to $678.2 million ($3.04 per diluted share) in Q1 FY2026.
  • 2Sales grew by 6% to $3.1 billion, driven by energy cost pass-throughs, favorable currency, and improved pricing.
  • 3Operating income rose 14% to $734.5 million, with operating margin expanding by 170 basis points to 23.7%.
  • 4The company recorded $22.0 million in charges related to updated cost estimates for prior-year business and asset actions, impacting operating income.
  • 5Cash provided by operating activities increased to $900.7 million, reflecting strong operational performance.
  • 6Capital expenditures were $910.7 million, down from $1.2 billion in the prior year, primarily due to nearing completion of the NEOM Green Hydrogen Project.
  • 7The company declared a quarterly dividend of $1.79 per share, with a subsequent increase to $1.81 per share approved.

Frequently Asked Questions

The 6% increase in sales to $3.1 billion was primarily driven by higher energy cost pass-throughs to customers (3%), favorable currency movements (2%), and higher pricing for non-helium products (1%). Volumes remained flat, as increased on-site demand was offset by lower helium demand and a significant prior-year helium sale.

Cost of sales increased by 5%, which was less than the sales growth, indicating effective cost management. Selling and administrative expenses decreased by 6% and represented a lower percentage of sales (7.4% vs. 8.3%). Productivity improvements and lower maintenance costs contributed to favorable cost dynamics, partially offsetting fixed-cost inflation and higher energy costs.

The NEOM Green Hydrogen Project remains a significant investment. In Q1 FY2026, capital expenditures for the project were lower as it nears completion. The project is funded through significant non-recourse project financing, with total borrowings for the joint venture standing at $5.3 billion as of December 31, 2025. Air Products continues to draw on project financing for its equity contributions.

Yes, Air Products recorded $22.0 million in charges within operating income related to updated cost estimates for prior-year business and asset actions. Additionally, $6.3 million related to losses on cross-currency interest rate swaps terminated in connection with these actions were recorded in 'Other non-operating income (expense), net'. These charges are not reflected in the company's reportable segments and are excluded from non-GAAP adjusted results.