Revenue accelerated 22.1% YoY to $1.4B with gross margin expanding to 46.6%, though operating margin contracted to 19.3% and EPS fell 34.4% YoY, indicating cost pressures.
Qnity Electronics, Inc. (Q) annual income statement — 3-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 |
|---|
| Sales/Revenue | 5.21B | 4.75B | 4.33B | 4.04B |
| Revenue Growth % | - | 9.67% | 7.43% | - |
| Cost of Goods Sold | 2.96B | 2.77B | 2.34B | 2.28B |
| COGS % of Revenue | - | 58.18% | 53.89% | 56.51% |
| Gross Profit | 2.25B | 1.99B | 2B | 1.75B |
| Gross Margin % | 43.26% | 41.82% | 46.11% | 43.49% |
| Gross Profit Growth % | - | -0.55% | 13.9% | - |
| Operating Expenses | 1.17B | 974M | 1.16B | 1.1B |
| OpEx % of Revenue | - | 20.49% | 26.76% | 27.21% |
| Selling, General & Admin | 699M | 620M | 617M | 533M |
| SG&A % of Revenue | - | 13.04% | 14.23% | 13.21% |
| Research & Development | 374M | 354M | 311M | 303M |
| R&D % of Revenue | - | 7.45% | 7.17% | 7.51% |
| Other Operating Expenses | 1000K | 0 | 232M | 262M |
| Operating Income | 1.09B | 1.01B | 847M | 657M |
| Operating Margin % | 20.9% | 21.33% | 19.54% | 16.28% |
| Operating Income Growth % | - | 19.72% | 28.92% | - |
| EBITDA | 1.47B | 1.39B | 1.24B | 1.06B |
| EBITDA Margin % | 28.29% | 29.24% | 28.63% | 26.27% |
| EBITDA Growth % | - | 12.01% | 17.08% | - |
| D&A (Non-Cash Add-back) | 385M | 376M | 394M | 403M |
| EBIT | 1.06B | 1.03B | 898M | 632M |
| Net Interest Income | -185M | -61M | -280M | 0 |
| Interest Income | 2M | 4M | 0 | 0 |
| Interest Expense | 187M | 65M | 280M | 0 |
| Other Income/Expense | -211M | -52M | 54M | -25M |
| Pretax Income | 878M | 962M | 901M | 632M |
| Pretax Margin % | 16.85% | 20.24% | 20.78% | 15.66% |
| Income Tax | 248M | 233M | 177M | 99M |
| Effective Tax Rate % | 28.25% | 24.22% | 19.64% | 15.66% |
| Net Income | 586M | 692M | 693M | 507M |
| Net Margin % | 11.25% | 14.56% | 15.99% | 12.57% |
| Net Income Growth % | - | -0.14% | 36.69% | - |
| Net Income (Continuing) | 630M | 729M | 724M | 533M |
| Discontinued Operations | 0 | 0 | 0 | 0 |
| Minority Interest | 285M | 271M | 252M | 246M |
| EPS (Diluted) | 2.79 | 3.30 | 3.31 | 2.42 |
| EPS Growth % | - | -0.27% | 36.69% | - |
| EPS (Basic) | - | 3.30 | 3.31 | 2.42 |
| Diluted Shares Outstanding | 210.3M | 209.48M | 209.43M | 209.43M |
| Basic Shares Outstanding | 209.6M | 209.48M | 209.43M | 209.43M |
| Dividend Payout Ratio | - | 1.88% | - | - |
Quick answers to the most common questions about buying Q stock.
For fiscal year 2025, Qnity Electronics, Inc. (Q) reported total revenue of $4.75B. This represents a 17.8% increase compared to $4.04B in 2023.
Qnity Electronics, Inc. (Q) is profitable, generating $692.0M in net income for the fiscal year ending 2025 with a net profit margin of 14.6%.
Qnity Electronics, Inc. (Q) reported an operating income of $1.01B, resulting in an operating profit margin of 21.3%. This margin reflects the operational efficiency of the business before interest and taxes.
Qnity Electronics, Inc. (Q) generated $1.99B in gross profit for the year, representing a gross profit margin of 41.8%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Stranded costs and EPS volatility
Metrics are mathematically derived from official filings.
Growth Accelerates on Advanced Node Demand
Qnity's revenue grew 22.1% year-over-year in 2026Q2, reaching $1.4B, according to the latest quarterly report, marking a clear acceleration from the 17.6% growth in the prior quarter.
The sequential acceleration from 17.6% to 22.1% suggests that the semiconductor recovery is gaining momentum, likely driven by advanced node transitions and increased wafer starts. The revenue step-up of roughly $100M quarter-over-quarter indicates robust demand for consumables, which is consistent with the company's positioning as a process-of-record supplier. Investors should monitor whether this pace is sustainable as the industry moves through the cycle.
Gross Margin Expansion Signals Mix Shift
Gross margin expanded to 46.6% in 2026Q2, up from 41.8% in 2025Q4, as reported in the income statement, suggesting a favorable product mix toward advanced materials.
The 480 basis point improvement in gross margin over two quarters indicates that higher-value semiconductor materials are becoming a larger share of revenue, likely due to increased adoption of advanced packaging and EUV-related chemistries. This margin expansion is a positive signal for structural profitability, though it may be partially offset by raw material cost volatility. The sustainability of this margin level depends on continued mix shift and pricing power.
Operating Leverage Tempered by SG&A Growth
Operating income grew 11.3% sequentially in 2026Q2, but SG&A expenses rose 15.6%, according to the latest financials, indicating that overhead costs are growing faster than revenue.
While gross profit expanded by 17.7% sequentially, operating income growth lagged at 11.3%, reflecting a disproportionate increase in SG&A. This suggests that the company is investing in standalone infrastructure post-spin-off, which may be temporarily dampening operating leverage. As these costs normalize, operating margin could recover toward the 22.7% level seen in 2026Q1.
EPS Volatility Masks Underlying Profitability
Diluted EPS fell 34.4% year-over-year in 2026Q2 to $0.59, despite revenue growth of 22.1%, according to the income statement, highlighting significant earnings volatility.
The sharp decline in EPS, despite strong revenue growth, appears driven by a lower net margin of 8.7% versus 16.5% in the prior quarter. This may reflect one-time items or tax rate fluctuations, as the company transitions to a standalone entity. Investors should scrutinize the sustainability of net margins, which have ranged from 8.4% to 17.3% over the past five quarters, indicating potential earnings quality concerns.
R&D Investment Rises with Revenue
R&D expenses increased to $98M in 2026Q2, up from $90M in 2025Q4, as reported in the financial statements, representing 6.9% of revenue, a slight decline from 7.5%.
The absolute increase in R&D spending reflects continued investment in next-generation materials, but the slight decline as a percentage of revenue suggests some operating leverage. SG&A, however, grew faster than revenue, rising from $167M to $200M over the same period, which may indicate temporary costs related to the spin-off. Monitoring these cost lines will be key to assessing margin trajectory.
Margin Compression Risk from Stranded Costs
Despite strong revenue growth, operating margin contracted to 19.3% in 2026Q2 from 22.7% in 2026Q1, according to the income statement, raising concerns about cost discipline.
The sequential decline in operating margin, coupled with the EPS miss, suggests that the company may be absorbing stranded costs from the Novus spin-off. If these costs persist, they could continue to pressure margins, offsetting the benefits of revenue growth. Additionally, the high gross margin may attract competition, and any slowdown in advanced node adoption could expose the cyclicality of the business.