Revenue growth reached 41.5% in 2026Q1, yet gross margins contracted to 38.4% from the 42.6% levels observed throughout the 2025 fiscal year.
| 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 | 2.8B | 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 % | 13% | 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 | 1.65B | 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 | 1.14B | 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 % | 40.85% | 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 | 766.5M | 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 | 694.6M | 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 | 71.9M | 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 | 376.2M | 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 % | 13.45% | 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 | 532.7M | 493.4M | 501.5M | 340.3M | 486.6M | 463.8M | 393.9M | 403.6M | 405.2M | 377.3M | 595.3M | 322.6M | 97.45M | 160.7M | 157.3M |
| EBITDA Margin % | 19.04% | 19.34% | 20.41% | 14.59% | 19.09% | 19.33% | 21.25% | 21.98% | 20.66% | 9.99% | 16.6% | 12.69% | 11.56% | 21.98% | 21.51% |
| EBITDA Growth % | 6.97% | -1.62% | 47.37% | -30.07% | 4.92% | 17.75% | -2.4% | -0.39% | 7.39% | -36.62% | 84.53% | 231.05% | -39.36% | 2.16% | - |
| D&A (Non-Cash Add-back) | 156.5M | 151.2M | 157.6M | 166.7M | 161.3M | 163.9M | 161.2M | 154.5M | 156.7M | 156M | 342.3M | 251M | 87.95M | 45.6M | 42.2M |
| EBIT | 293.7M | 342.2M | 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 | -60.6M | -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 | 60.6M | 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 | -257.5M | -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 | 118.7M | 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 % | 4.24% | 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 | -30.1M | -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 % | -25.36% | -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 | 148.7M | 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 % | 5.32% | 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 % | -48.04% | -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) | 148.8M | 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 | 14.8M | 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) | 0.61 | 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 % | -47.86% | -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 | 243.2M | 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% | - | - | - | - | - | - | - | - |
Geopolitical supply chain disruption
As reported in the most recent quarterly filings, ESI achieved a significant revenue expansion to $840.0 million in 2026Q1, representing a 41.5% year-over-year growth rate that appears to deviate from the company's historical pattern of low-single-digit growth observed throughout the 2024 and 2025 fiscal periods.
This sharp acceleration warrants careful scrutiny to determine if it reflects sustainable volume gains in semiconductor packaging or merely a temporary surge in pass-through pricing for precious metals. Investors should monitor whether this growth trajectory can be maintained as the company laps these higher revenue figures in subsequent quarters.
According to the income statement data, gross margins contracted to 38.4% in 2026Q1, a notable decline from the 42.6% levels maintained during the 2025 fiscal year, suggesting that the recent revenue growth may be coming at the expense of underlying pricing power or product mix shifts.
The compression in gross margin despite top-line growth may indicate that the company is struggling to fully pass through rising input costs to its electronics customers. This trend suggests that ESI's competitive moat in specialty chemicals may be facing pressure from either inflationary raw material environments or increased competitive discounting.
Based on the provided financial figures, operating income scaled to $111.4 million in 2026Q1, yet the operating margin of 13.3% remains largely consistent with historical averages, indicating that the company has not yet achieved meaningful operating leverage despite the substantial increase in quarterly revenue.
The inability to expand operating margins during a period of high revenue growth suggests that SG&A and R&D expenses are rising in lockstep with sales. This implies that the business model requires continuous, heavy investment in technical support and customer integration to sustain its market position, limiting the potential for margin expansion.
As evidenced by the quarterly data, EPS experienced a sharp 42.5% decline in 2026Q1 to $0.23, following a period of extreme volatility where EPS fluctuated between $0.03 and $0.40, highlighting the difficulty in relying on reported net income as a proxy for core operational health.
The erratic nature of net income appears driven by non-operating items and potentially significant stock-based compensation, which reached $8.1 million in the most recent quarter. Investors should look past these headline figures to assess whether the underlying cash-generating capacity of the business is being masked by accounting noise.
While the 2026Q1 revenue growth of 41.5% appears impressive, the simultaneous contraction in gross margins to 38.4% and the significant drop in EPS suggest that the current growth narrative may be unsustainable or driven by lower-margin business segments that dilute overall profitability.
Short-term observers might argue that the recent revenue spike is an anomaly that masks a deteriorating competitive position in the high-end electronics market. If the company cannot demonstrate a return to 40%+ gross margins, the market may begin to re-evaluate the durability of ESI's specialty chemical franchise.
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.