01—Abstract
Summary
Summary of the 10-Q filed November 4, 2025. Cited figures are marked; the original filing is the authoritative source.
International Flavors & Fragrances Inc. (IFF) reported third-quarter 2025 net sales of $2.694 billiona, down from $2.925 billion a year earlier, with net income attributable to IFF shareholders of $40 million versus $58 million.
On a comparable currency neutral basis, third-quarter sales were flat, driven by favorable net pricing and volume increases in Scent and Taste. For the first nine months of 2025, the company reported a net loss attributable to IFF shareholders of $392 millionb, compared with net income of $323 million in the prior-year period, largely because of a $1.153 billion goodwill impairment on the Food Ingredients reporting unit, a $108 million loss on the held-for-sale Soy Crush, Concentrates & Lecithin business, and a $111 million net loss on business disposals, partly offset by a $488 million gain on debt extinguishment. The company completed the divestitures of its Pharma Solutions disposal group (cash proceeds of approximately $2.564 billion) and its Nitrocellulose business during 2025, and used proceeds to repay debt.
Total debt fell to $6.049 billionc at September 30, 2025 from $8.977 billion at December 31, 2024, and cash and cash equivalents rose to $621 million. Net cash provided by operating activities was $532 million for the nine months, versus $681 million a year earlier. The filing also revises previously issued financial statements to correct income tax-related errors, and it discloses a $500 million share repurchase program authorized August 5, 2025 and a settlement agreement in the U.S. fragrance class actions.
The company reports a net debt to credit adjusted EBITDA ratio of 2.53 to 1.0 as of September 30, 2025, below the covenant levels, and states it was in compliance with all financial and other covenants. Investigations by European, UK, U.S. and other competition authorities into fragrance businesses remain ongoing, and the company states it cannot predict their outcome.
02—Key points
Key Highlights
- Third-quarter 2025 net sales were $2.694 billion, down from $2.925 billion, and flat on a comparable currency neutral basis; gross margin was 36.5% of sales versus 36.0% a year earlier.
- Nine-month 2025 net loss attributable to IFF shareholders was $392 million, compared with net income of $323 million in the 2024 period, driven by a $1.153 billion goodwill impairment on Food Ingredients.
- Third-quarter 2025 income before taxes was $56 million, and the effective tax rate was 26.8%; for the nine months the effective tax rate was 10.1%, reflecting a one-time $361 million tax benefit from the entity realignment project.
- Total debt declined to $6.049 billion from $8.977 billion at year-end 2024, following a $488 million gain on extinguishment of debt from tender offers completed in May 2025.
- The Pharma Solutions disposal group was sold May 1, 2025 for gross cash proceeds of approximately $2.564 billion, and the Nitrocellulose business was sold May 9, 2025.
- The Board authorized a $500 million share repurchase program on August 5, 2025, to be funded from available cash and operating cash flow.
- The company revised previously issued financial statements to correct income tax-related errors, and it discloses a $108 million held-for-sale loss on the pending Soy Crush, Concentrates & Lecithin sale expected to close by the second quarter of 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, International Flavors & Fragrances kept $0.02.
- Revenue$1.87B100.0%
- Cost of revenue−$1.07B57.2%
- Gross profit$799.0M42.8%
- Operating costs−$608.0M32.5%
- Operating income$191.0M10.2%
- Interest, other & tax−$151.0M8.1%
- Net income$40.0M2.1%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed November 4, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $1.87B$2.92B | −36.1% |
| Cost of Revenue | $1.07B$1.87B | −42.9% |
| Gross Profit | $799.00M$1.05B | −24.0% |
| R&D Expenses | $162.00M$162.00M | 0.0% |
| SG&A Expenses | $348.00M$495.00M | −29.7% |
| Operating Income | $191.00M$249.00M | −23.3% |
| Interest Expense | $48.00M$74.00M | −35.1% |
| Net Income | $40.00M$59.00M | −32.2% |
| EPS (Basic) | $0.16$0.23 | −30.4% |
| EPS (Diluted) | $0.16$0.23 | −30.4% |
| Shares Outstanding (Basic) | 256.00M256.00M | 0.0% |
| Shares Outstanding (Diluted) | 257.00M257.00M | 0.0% |
05—Questions
Frequently Asked Questions
How did IFF perform in the third quarter of 2025?
Net sales were $2.694 billion, down from $2.925 billion, mainly because of divestitures; on a comparable currency neutral basis sales were flat. Net income attributable to IFF shareholders was $40 million, compared with $58 million a year earlier, and diluted EPS was $0.16 versus $0.23.
Why did IFF report a net loss for the first nine months of 2025?
The company recorded a $1.153 billion goodwill impairment on the Food Ingredients reporting unit, a $111 million net loss on business disposals, and a $108 million loss on assets held for sale for the Soy Crush, Concentrates & Lecithin business. These were partly offset by a $488 million gain on debt extinguishment. Net loss attributable to IFF shareholders was $392 million.
How did the divestitures affect IFF's balance sheet and debt?
Proceeds from the Pharma Solutions sale, about $2.564 billion gross, were used in part to fund a tender offer repurchasing about $2.5 billion carrying value of senior notes for approximately $2.0 billion in cash, and to repay the remaining 2026 Term Loan Facility. Total debt fell to $6.049 billion at September 30, 2025 from $8.977 billion at December 31, 2024.
What is the status of IFF's fragrance-related legal and regulatory matters?
IFF announced an October 17, 2025 settlement that would resolve the major part of the pending U.S. direct purchaser class actions, with a $26 million contribution to a settlement fund subject to court approval. The company recognized a $43.25 million provision in the nine months. Investigations by the European Commission, UK CMA, U.S. DOJ, and other authorities are ongoing, and the company says it cannot predict their outcome or whether they will materially impact results.
Is IFF returning capital to shareholders?
IFF declared a quarterly dividend of $0.40 per share in each quarter, totaling $1.20 for the nine months, and paid $306 million in dividends during the nine months. The Board also authorized a $500 million share repurchase program on August 5, 2025, which began in the fourth quarter of 2025 and has no specified term.
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