01—Abstract
Summary
Summary of the 10-Q filed November 18, 2025. Cited figures are marked; the original filing is the authoritative source.
Qnity Electronics, Inc. filed this Form 10-Q for the quarter ended September 30, 2025, following its separation from DuPont de Nemours, Inc. The Distribution was completed on November 1, 2025, and Qnity began trading on the New York Stock Exchange under the symbol "Q" on November 3, 2025.
The statements are combined carve-out financials derived from DuPont's accounting records. For the nine months ended September 30, 2025, net sales were $3.56 billiona, up from $3.23 billion, and net income was $620 million, compared with $503 million a year earlier. Net income available for common stockholders was $592 million, or $2.83 per share, versus $2.30 per share in the prior-year period.
Segment Operating EBITDA for the nine months was $713 millionb in Semiconductor Technologies and $403 million in Interconnect Solutions. The balance sheet changed substantially in connection with the Separation. Long-term debt was $1.72 billion at September 30, 2025, following $1.75 billion of notes issued in August 2025.
After quarter-end, on October 31, 2025, Qnity entered into a credit agreement with a $1.25 billionc revolving facility and a $2.35 billion term loan, which was fully funded and paid to DuPont as a cash dividend. The company states it has incurred aggregate indebtedness of $4.1 billion as of October 31, 2025. The filing also discloses that legacy liabilities allocated to Qnity under the separation agreements are expected to be material, will be finalized, and will be reflected as liabilities on the December 31, 2025 balance sheet.
These include an expected $75 milliond indemnification liability for future Qualified Spend under the Memorandum of Understanding, a New Jersey settlement allocation, and other environmental and legacy amounts. Management estimates approximately $180 million in one-time costs over two years to establish stand-alone information technology systems.
Management also says it expects its cash flows, existing borrowings, and capital market access to provide adequate liquidity for at least the next 12 months. The company declared a quarterly dividend of $0.06 per share on November 12, 2025, payable December 15, 2025.
02—Key points
Key Highlights
- Net sales were $1.28 billion for the third quarter of 2025, up 11% from $1.15 billion, and $3.56 billion for the nine months, up 10%, driven mainly by volume growth in both segments.
- Net income for the nine months ended September 30, 2025 was $620 million, versus $503 million in 2024; earnings per share were $2.83, versus $2.30.
- Semiconductor Technologies segment Operating EBITDA was $713 million for the nine months, up 12%, and Interconnect Solutions was $403 million, up 22%.
- Qnity issued $1.0 billion of 5.750% senior secured notes due 2032 and $750 million of 6.250% senior unsecured notes due 2033 in August 2025, and entered a $1.25 billion revolver and $2.35 billion term loan on October 31, 2025.
- Total indebtedness was $4.1 billion as of October 31, 2025, with the term loan proceeds paid to DuPont as a cash dividend in connection with the Separation.
- Legacy liabilities allocated from DuPont are expected to be material and will be reflected on the December 31, 2025 balance sheet, including the New Jersey settlement allocation and PFAS-related indemnification obligations.
- Qnity expects approximately $180 million in one-time costs over two years to establish stand-alone information technology systems.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed November 18, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $1.28B$1.15B | +11.1% |
| Cost of Revenue | $701.00M$609.00M | +15.1% |
| Gross Profit | $575.00M$539.00M | +6.7% |
| R&D Expenses | $92.00M$81.00M | +13.6% |
| SG&A Expenses | $159.00M$156.00M | +1.9% |
| Net Income | $223.00M$207.00M | +7.7% |
| EPS (Basic) | $1.01$0.95 | +6.3% |
| EPS (Diluted) | $1.01$0.95 | +6.3% |
| Shares Outstanding (Basic) | 209.00M209.00M | 0.0% |
| Shares Outstanding (Diluted) | 209.00M209.00M | 0.0% |
05—Questions
Frequently Asked Questions
How did Qnity's operating results trend in the first nine months of 2025?
Net sales rose 10% to $3.56 billion from $3.23 billion, primarily on a 12% increase in volume partly offset by a 2% decrease in local price and product mix. Cost of sales was 54% of net sales in both periods. Net income increased to $620 million from $503 million, and income before income taxes was $773 million versus $648 million.
What debt did Qnity take on, and how is it being used?
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. On October 31, 2025, it entered a $1.25 billion revolving credit facility and a $2.35 billion term loan. The term loan was funded in full and paid to DuPont as a cash dividend in connection with the Separation. Long-term debt was $1.72 billion net of issuance costs at September 30, 2025.
What liabilities is Qnity taking on from DuPont?
Under the separation agreements, Qnity has been contractually allocated, and will directly pay or indemnify DuPont for, the Applicable Qnity Percentage of certain liabilities, which the filing assumes is 44%. These include funding obligations under the Memorandum of Understanding, legacy PFAS liabilities, and liabilities of discontinued or divested DuPont businesses. The company estimates its portion of the New Jersey Consent Order charge at approximately $66 million, a $47 million cash contribution to the NJ Insurance Escrow, and about $38 million of other legacy environmental and related liabilities. These amounts will be finalized and reflected on the December 31, 2025 balance sheet.
How did the Separation affect Qnity's stock and capital return?
DuPont completed the Separation on November 1, 2025 through a pro-rata distribution of one Qnity share for every two DuPont shares held at the October 22, 2025 record date. Approximately 209 million shares were distributed. Qnity began trading on the NYSE under "Q" on November 3, 2025. On November 12, 2025, the Board declared a quarterly dividend of $0.06 per share, payable December 15, 2025.
Are there any notable one-time or near-term cost items?
Separation costs were approximately $4 million for the third quarter and $6 million for the nine months of 2025, recorded in selling, general and administrative expenses. Management estimates about $180 million in one-time costs over two years to establish stand-alone information technology systems, and expects additional ongoing costs to operate as a public company. The company's effective tax rate for the nine months was 19.8%, compared with 22.4% a year earlier.
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