01—Abstract
Summary
Summary of the 10-K filed February 26, 2026. Cited figures are marked; the original filing is the authoritative source.
Qnity Electronics, Inc. (NYSE: Q) completed its separation from DuPont de Nemours, Inc. on November 1, 2025, through a pro-rata distribution of one Qnity share for every two DuPont shares, and began trading independently on November 3, 2025.
For fiscal 2025, net sales rose to $4.75 billiona from $4.34 billion, driven by an 11% increase in sales volume, with the Semiconductor Technologies segment at $2.64 billion and the Interconnect Solutions segment at $2.11 billion. Net income was $729 million, and net income available to common stockholders was $692 million, or $3.30 per diluted share, compared with $3.31 in 2024. Adjusted Operating EBITDA was $945 million for Semiconductor Technologies and $539 million for Interconnect Solutions.
The balance sheet reflects the spin-off financing. Total debt was $4.0 billionb at December 31, 2025, up from zero a year earlier, following $1.0 billion of 5.750% senior secured notes due 2032, $750 million of 6.250% senior unsecured notes due 2033, and a $2.35 billion senior secured term loan. Cash and cash equivalents were $915 million.
Operating cash flow was $1.27 billionc. The company also carries significant indemnification obligations to DuPont, with an Applicable Qnity Percentage of 44%, and recorded indemnification liabilities of $461 million and indemnification assets of $323 million. Management reported that the disclosure controls were effective, and that the Company is transitioning to Section 404 internal control reporting in its second 10-K.
On February 20, 2026, the Board approved a share repurchase authorization of up to $500 milliond, and the Board declared a quarterly dividend of $0.08 per share payable March 16, 2026. The filing notes that approximately 60% of employees are in Asia Pacific, that China represents approximately 33% of net sales, and that Samsung Electronics and TSMC accounted for 11% and 8% of 2025 net sales, respectively.
02—Key points
Key Highlights
- Net sales increased to $4.75 billion in 2025 from $4.34 billion in 2024, up 10%, primarily driven by an 11% increase in sales volume.
- Net income was $729 million in 2025 versus $724 million in 2024; diluted EPS was $3.30 compared with $3.31.
- Semiconductor Technologies Adjusted Operating EBITDA rose to $945 million from $884 million; Interconnect Solutions rose to $539 million from $448 million.
- Total debt rose to $4.0 billion at year-end 2025 from zero, reflecting $4.1 billion of notes and term loan issued in connection with the DuPont Separation.
- Cash and cash equivalents were $915 million at December 31, 2025, and operating cash flow was $1.27 billion.
- The company is subject to indemnification obligations to DuPont at an Applicable Qnity Percentage of 44%, with recorded indemnification liabilities of $461 million.
- The Board approved a share repurchase authorization of up to $500 million on February 20, 2026, and a quarterly dividend of $0.08 per share.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 26, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $4.75B$4.33B | +9.7% |
| Cost of Revenue | $2.56B$2.34B | +9.4% |
| Gross Profit | $2.19B$2.00B | +10.0% |
| R&D Expenses | $354.00M$314.00M | +12.7% |
| SG&A Expenses | $620.00M$603.00M | +2.8% |
| Net Income | $729.00M$724.00M | +0.7% |
| EPS (Basic) | $3.30$3.31 | −0.3% |
| EPS (Diluted) | $3.30$3.31 | −0.3% |
| Shares Outstanding (Basic) | 209.60M209.40M | +0.1% |
| Shares Outstanding (Diluted) | 209.80M209.40M | +0.2% |
05—Questions
Frequently Asked Questions
How did Qnity's 2025 sales and profitability compare with 2024?
Net sales were $4.75 billion, up 10% from $4.34 billion, with an 11% volume increase partially offset by a 1% decrease in local price and product mix. Net income was $729 million versus $724 million, and diluted EPS was $3.30 versus $3.31. Cost of sales as a percentage of net sales remained at 54%.
What debt did Qnity take on in connection with the Separation?
Qnity issued $1.0 billion of 5.750% senior secured notes due 2032 and $750 million of 6.250% senior unsecured notes due 2033 on August 15, 2025, and entered into a $2.35 billion senior secured term loan facility on October 31, 2025, along with a $1.25 billion revolving facility. Total debt was $4.0 billion at December 31, 2025, and the full term loan proceeds were paid to DuPont as a cash dividend.
What financial obligations does Qnity have to DuPont?
Qnity is contractually allocated, and directly pays or indemnifies DuPont for, its Applicable Qnity Percentage of certain liabilities, including MOU funding obligations, legacy PFAS liabilities and discontinued-business liabilities. The percentage was set at 44% on December 2, 2025. At year-end, indemnification liabilities were $461 million, and indemnification assets from DuPont were $323 million.
What share repurchase and dividend actions has Qnity announced?
On February 20, 2026, the Board approved a share repurchase authorization of up to $500 million with no expiration date. The Board declared a quarterly dividend of $0.08 per share on December 9, 2025, payable March 16, 2026 to stockholders of record on February 27, 2026, and the filing states the company expects quarterly dividends to continue, subject to Board determination.
What are the main risks highlighted for Qnity investors?
Key risks include semiconductor industry cyclicality, customer concentration (top ten customers were 34% of 2025 net sales), international exposure (about 88% of net sales from international operations), China trade restrictions (China about 33% of net sales), and the financial burden of DuPont indemnification obligations. The filing also flags stand-alone public company costs, including approximately $180 million in one-time IT system costs over two years.
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