Revenue growth reaccelerated to 51.7% year over year in 2026Q3 ($995.3M), but gross margin eroded to 34.4% from 43.6% and SG&A rose 30.1% to $205.6M, suggesting the acquisition-led top-line surge carries a materially lower-margin mix.
Element Solutions Inc (ESI) annual income statement — 14-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 |
|---|
| Sales/Revenue | 3.49B | 2.55B | 2.46B | 2.33B | 2.55B | 2.4B | 1.85B | 1.84B | 1.96B | 3.78B | 3.59B | 2.54B | 843.19M | 731.22M | 731.2M |
| Revenue Growth % | 39.62% | 3.84% | 5.3% | -8.48% | 6.23% | 29.46% | 0.97% | -6.38% | -48.07% | 5.3% | 41.05% | 201.51% | 15.31% | 0% | - |
| Cost of Goods Sold | 2.21B | 1.48B | 1.42B | 1.41B | 1.6B | 1.44B | 1.07B | 1.05B | 1.12B | 2.19B | 2.08B | 1.55B | 446.63M | 376.17M | 376.1M |
| COGS % of Revenue | - | 58.04% | 57.85% | 60.63% | 62.63% | 59.96% | 57.6% | 57.06% | 57.29% | 57.92% | 57.95% | 60.98% | 52.97% | 51.44% | 51.44% |
| Gross Profit | 1.28B | 1.07B | 1.04B | 918.5M | 952.7M | 960.8M | 786M | 788.3M | 837.6M | 1.59B | 1.51B | 991.9M | 396.55M | 355.05M | 355.1M |
| Gross Margin % | 36.56% | 41.96% | 42.15% | 39.37% | 37.37% | 40.04% | 42.4% | 42.94% | 42.71% | 42.08% | 42.05% | 39.02% | 47.03% | 48.56% | 48.56% |
| Gross Profit Growth % | - | 3.36% | 12.76% | -3.59% | -0.84% | 22.24% | -0.29% | -5.89% | -47.29% | 5.37% | 52.03% | 150.13% | 11.69% | -0.01% | - |
| Operating Expenses | 867M | 728.3M | 691.8M | 744.9M | 627.4M | 660.9M | 553.3M | 539.2M | 589.1M | 1.21B | 1.21B | 920.3M | 384.1M | 239.96M | 239.7M |
| OpEx % of Revenue | - | 28.55% | 28.16% | 31.93% | 24.61% | 27.54% | 29.85% | 29.37% | 30.04% | 31.98% | 33.66% | 36.2% | 45.55% | 32.82% | 32.78% |
| Selling, General & Admin | 787M | 660.7M | 628.8M | 596.8M | 578.6M | 611.2M | 504.7M | 497M | 544.8M | 1.11B | 1.12B | 857.5M | 357.87M | 214.61M | 214.6M |
| SG&A % of Revenue | - | 25.9% | 25.59% | 25.58% | 22.7% | 25.47% | 27.23% | 27.07% | 27.78% | 29.38% | 31.32% | 33.73% | 42.44% | 29.35% | 29.35% |
| Research & Development | 80M | 67.6M | 63M | 68.1M | 48.8M | 49.7M | 48.6M | 42.2M | 44.3M | 98.4M | 84M | 62.8M | 26.23M | 25.05M | 25.1M |
| R&D % of Revenue | - | 2.65% | 2.56% | 2.92% | 1.91% | 2.07% | 2.62% | 2.3% | 2.26% | 2.61% | 2.34% | 2.47% | 3.11% | 3.43% | 3.43% |
| Other Operating Expenses | 0 | 0 | 0 | 80M | 2.9M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -2.48M | 292K | 0 |
| Operating Income | 408.7M | 342.2M | 343.9M | 173.6M | 325.3M | 299.9M | 232.7M | 249.1M | 248.5M | 221.3M | 253M | 71.6M | 9.5M | 115.1M | 115.1M |
| Operating Margin % | 11.71% | 13.41% | 14% | 7.44% | 12.76% | 12.5% | 12.55% | 13.57% | 12.67% | 5.86% | 7.06% | 2.82% | 1.13% | 15.74% | 15.74% |
| Operating Income Growth % | - | -0.49% | 98.1% | -46.63% | 8.47% | 28.88% | -6.58% | 0.24% | 12.29% | -12.53% | 253.35% | 653.92% | -91.75% | -0% | - |
| EBITDA | 578.2M | 493.4M | 501.5M | 340.3M | 486.6M | 463.8M | 394.1M | 403.8M | 405.2M | 377.3M | 595.3M | 322.6M | 97.45M | 160.7M | 157.3M |
| EBITDA Margin % | 16.57% | 19.34% | 20.41% | 14.59% | 19.09% | 19.33% | 21.26% | 21.99% | 20.66% | 9.99% | 16.6% | 12.69% | 11.56% | 21.98% | 21.51% |
| EBITDA Growth % | 15.83% | -1.62% | 47.37% | -30.07% | 4.92% | 17.69% | -2.4% | -0.35% | 7.39% | -36.62% | 84.53% | 231.05% | -39.36% | 2.16% | - |
| D&A (Non-Cash Add-back) | 169.5M | 151.2M | 157.6M | 166.7M | 161.3M | 163.9M | 161.4M | 154.7M | 156.7M | 156M | 342.3M | 251M | 87.95M | 45.6M | 42.2M |
| EBIT | 296.5M | 169.6M | 344M | 178.4M | 334.8M | 311.6M | 144.5M | 231.6M | 257.8M | 76.5M | 140.5M | -15.4M | 7M | -196.07M | 120.1M |
| Net Interest Income | -81.2M | -53.4M | -56.3M | -49.3M | -51.2M | -54.2M | -63.4M | -90.7M | -311M | -336.9M | -372.3M | -213.9M | -37.9M | 0 | -49.1M |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 81.2M | 53.4M | 56.3M | 49.3M | 51.2M | 54.2M | 63.4M | 90.7M | 311M | 336.9M | 376M | 213.9M | 37.9M | 0 | 49.1M |
| Other Income/Expense | -235.6M | -226M | -56.2M | -44.5M | -53.3M | -48.2M | -151.6M | -108.2M | -301.7M | -460.6M | -137.4M | -300.9M | -40.4M | -316.54M | -44.1M |
| Pretax Income | 173.1M | 116.2M | 287.7M | 129.1M | 272M | 251.7M | 81.1M | 140.9M | -53.2M | -289M | -48M | -229.3M | -30.89M | -24.67M | 71M |
| Pretax Margin % | 4.96% | 4.55% | 11.71% | 5.53% | 10.67% | 10.49% | 4.38% | 7.67% | -2.71% | -7.65% | -1.34% | -9.02% | -3.66% | -3.37% | 9.71% |
| Income Tax | -31.9M | -74.6M | 44.8M | 13M | 85.8M | 48.3M | 4.3M | 61.3M | 23.8M | 6.6M | 29M | 75.1M | -6.69M | -24.67M | 24.7M |
| Effective Tax Rate % | -18.43% | -64.2% | 15.57% | 10.07% | 31.54% | 19.19% | 5.3% | 43.51% | -44.74% | -2.28% | -60.42% | -32.75% | 21.65% | 100% | 34.79% |
| Net Income | 205M | 190.8M | 244.2M | 118.1M | 187.2M | 203.3M | 75.7M | 92.2M | -324.4M | -296.2M | -74M | -308.6M | -29.91M | -194.2M | 46M |
| Net Margin % | 5.87% | 7.48% | 9.94% | 5.06% | 7.34% | 8.47% | 4.08% | 5.02% | -16.54% | -7.84% | -2.06% | -12.14% | -3.55% | -26.56% | 6.29% |
| Net Income Growth % | -14.37% | -21.87% | 106.77% | -36.91% | -7.92% | 168.56% | -17.9% | 128.42% | -9.52% | -300.27% | 76.02% | -931.83% | 84.6% | -522.17% | - |
| Net Income (Continuing) | 205M | 190.8M | 242.9M | 116.1M | 186.2M | 203.4M | 76.8M | 79.6M | -77M | -191.8M | -190.5M | -304.4M | -24.2M | -195.63M | 46.3M |
| Discontinued Operations | 0 | 0 | 1.6M | 2.1M | 1.8M | 300K | 0 | 13.3M | 0 | 0 | 0 | 0 | 0 | 13.2M | 0 |
| Minority Interest | 14.5M | 14.9M | 15.4M | 15.8M | 16.6M | 20.1M | -1.7M | -1.6M | 71.9M | 116.9M | 154M | 169.4M | 93M | 96.02M | -288K |
| EPS (Diluted) | 0.84 | 0.79 | 1.01 | 0.49 | 0.75 | 0.82 | 0.30 | 0.35 | -1.13 | -1.04 | -0.27 | -1.52 | -0.22 | -2.19 | 0.02 |
| EPS Growth % | -14.63% | -21.78% | 106.12% | -34.67% | -8.54% | 173.33% | -14.29% | 130.97% | -8.65% | -285.19% | 82.24% | -590.91% | 89.95% | -13960.76% | - |
| EPS (Basic) | - | 0.79 | 1.01 | 0.49 | 0.76 | 0.82 | 0.30 | 0.35 | -1.14 | -1.04 | -0.30 | -1.52 | -0.22 | -2.19 | 0.02 |
| Diluted Shares Outstanding | 243.7M | 242.4M | 242.6M | 241.8M | 245.8M | 247.9M | 249.9M | 260.1M | 288.2M | 286.1M | 272.3M | 203.2M | 135.3M | 88.53M | 88.53M |
| Basic Shares Outstanding | 243.5M | 242M | 242.1M | 241.4M | 245.1M | 247.4M | 248.8M | 257.6M | 283.79M | 284.12M | 243.3M | 203.03M | 135.3M | 88.53M | 88.53M |
| Dividend Payout Ratio | - | 40.78% | 32.02% | 65.54% | 41.88% | 30.45% | 16.38% | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying ESI stock.
For fiscal year 2025, Element Solutions Inc (ESI) reported total revenue of $2.55B. This represents a 248.9% increase compared to $731.2M in 2012.
Element Solutions Inc (ESI) is profitable, generating $190.8M in net income for the fiscal year ending 2025 with a net profit margin of 7.5%.
Element Solutions Inc (ESI) reported an operating income of $342.2M, resulting in an operating profit margin of 13.4%. This margin reflects the operational efficiency of the business before interest and taxes.
Element Solutions Inc (ESI) generated $1.07B in gross profit for the year, representing a gross profit margin of 42.0%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Gross margin compression persists
Metrics are mathematically derived from official filings.
Revenue Growth Steps Up Sharply
Revenue accelerated to $995.3M in 2026Q3, up 51.7% year over year, a sharp break from the 1.7%-8.9% growth range recorded through early 2025, suggesting a step-change in volume or pass-through pricing rather than a typical organic cadence, per the company's reported income statements.
The discontinuity from mid-single-digit growth to 40-56% year-over-year gains across three consecutive quarters does not resemble a normal demand cycle for consumable chemistry, so the driver may be a mix shift toward pass-through metal content, an acquisition contribution, or a genuine step-up in AI-linked electronics volumes. Because gross margin fell over the same window, the growth appears less likely to be purely premium-priced organic share gain. Investors should separate reported growth from organic growth excluding metal pass-through before extrapolating this run-rate into forward estimates.
Gross Margin Erodes Through Mix Shift
Gross margin contracted to 34.4% in 2026Q3 from 43.6% two years earlier, as COGS rose to $652.9M and outpaced revenue gains, indicating the recent top-line surge carries a materially lower-quality margin mix than the historical baseline, based on ESI's quarterly filings.
A roughly 920 basis point erosion alongside record revenue suggests the incremental sales are either carrying a heavier pass-through metal component or skewing toward lower-value surface-finishing volumes, neither of which would be permanent if mix normalizes. The compression also narrows ESI's historical gross margin premium: at 34.4% it now sits below Quaker Houghton's 36.0% and only modestly above Cabot's 25.3%, whereas at 43.6% it was a clear outlier. The persistence of the decline across three quarters warrants monitoring, since a one-quarter lag in price pass-through would ordinarily have restored the percentage by now.
Overhead Absorbs Gross Profit Gains
Operating income reached only $113.9M in 2026Q3 versus $100.8M a year prior, a 13.0% gain that lagged 23.6% gross profit growth as SG&A climbed 30.1% to $205.6M, suggesting overhead is scaling faster than underlying profitability, according to reported financial statements.
Of the $65.4M year-over-year increase in gross profit, roughly $52M was absorbed by higher SG&A and R&D dollars, leaving only about $13M to flow to operating income; this implies commercial and technical-support investment has outpaced the profitability of the revenue it supports. The nuance is that SG&A intensity actually improved to 20.7% of revenue from 24.1%, so the operating margin decline to 11.4% appears driven by gross-level mix rather than overhead inefficiency. If gross margin stabilizes, the existing SG&A ratio should translate into meaningful positive operating leverage off the new revenue base.
Net Income Volatility Muddies EPS
Net income of $65.7M in 2026Q3 translated to a 6.6% net margin against an 11.4% operating margin, while stock-based compensation swung from $43.3M in 2025Q4 to $18.2M in 2026Q3, underscoring unusual volatility in reported EPS, per company disclosures.
Net margin has ranged from 0.9% to 16.5% across the ten quarters shown, so single-period EPS is a weak anchor for valuation and the 68.8% EPS growth is measured against a depressed $0.16 base rather than a clean run-rate. The 4.8 point gap between operating and net margin in the latest quarter points to substantial non-operating drag, likely interest and amortization of acquisition intangibles, which appears to suppress reported earnings relative to cash-generation capacity. The negative $8.1M SBC figure in 2026Q2 also distorts period-over-period comparisons, so adjusted measures probably represent the more reliable earnings trend.
2026Q1 Marks Structural Revenue Break
2026Q1 marks the clearest inflection, with revenue jumping 41.5% year over year to $840.0M while gross margin fell to 38.4% from 42.2%, signalling a structural change in revenue composition that has since persisted through 2026Q3, according to ESI's quarterly income statements.
Prior quarters showed revenue oscillating within a $590M-$680M band with gross margins holding in the 41-44% range, so the simultaneous break in both series suggests a durable change in business composition rather than a seasonal fluctuation. The inflection carried a cost: operating margin slipped to 13.3% and has since settled near 11.4%, meaning the new revenue tier has not yet delivered the profitability of the old one. Whether this proves value-accretive depends on whether the incremental volume is recurring consumable demand at normalized margins, which subsequent quarters should clarify.
Growth Outrunning Profit Conversion
Operating income has plateaued near $113M across 2026Q1-Q3 despite revenue expanding $155.3M over the same stretch, implying roughly a 1.6% incremental operating margin and raising questions about whether the growth is structurally profitable, as derived from ESI's reported results.
A short thesis would focus on the divergence between headline growth optics and profit conversion: 51.7% revenue growth delivered essentially flat operating income of $111.4M, $113.7M and $113.9M, so the market may be capitalizing growth that adds little to the bottom line. If the top-line surge is substantially metal pass-through, reported revenue is overstated as an economic measure and the 34.4% gross margin is the more honest indicator of unit economics; if it is organic, then pricing power appears to be weakening against peers. Investors should also weigh the potential for further share issuance against EPS growth and treat management's record-profit narrative as an inference to be tested rather than a demonstrated trend.