Ashland | 10-Q: FY2026 Q1 Revenue Misses Estimate at USD 386 M

Revenue: As of FY2026 Q1, the actual value is USD 386 M, missing the estimate of USD 402.21 M.EPS: As of FY2026 Q1, the actual value is USD -0.26, missing the estimate of USD -0.0286.EBIT: As of FY2026 Q1, the actual value is USD 11 M.Consolidated Financial Performance (Three months ended December 31, 2025 vs. 2024)Net loss: Ashland Inc. reported a net loss of - $12 million in 2025, significantly improving from - $165 million in 2024 .Loss from continuing operations: The loss from continuing operations was - $14 million in 2025, compared to - $166 million in 2024 .Operating loss: The operating loss was - $6 million in 2025, an improvement from - $179 million in 2024 .EBITDA: EBITDA was $40 million in 2025, compared to - $129 million in 2024 .Adjusted EBITDA: Adjusted EBITDA was $58 million in 2025, a decrease from $61 million in 2024 . This $3 million decrease was primarily due to portfolio optimization actions, lower sales volume, and modest pricing pressure, partially offset by favorable product mix, lower selling, general and administrative expenses, and lower intangibles amortization expense .Gross profit: Gross profit was $105 million in 2025, decreasing from $111 million in 2024 .Gross profit as a percentage of sales: This metric decreased to 27.2% in 2025 from 27.4% in 2024 .Selling, general and administrative expense: These expenses increased to $86 million in 2025 from $78 million in 2024, with expenses as a percentage of sales increasing by 3.0% .Research and development expense: Research and development expense remained consistent at $13 million in both 2025 and 2024 .Intangibles amortization expense: This expense decreased to $15 million in 2025 from $17 million in 2024 .Income (loss) on divestitures, net: Ashland Inc. reported a $2 million income in 2025, compared to a - $183 million loss in 2024 . The 2025 income resulted from a gain on the sale of excess corporate real estate, while the 2024 loss was an impairment charge related to the Avoca business .Net interest and other expense: This expense decreased to $8 million in 2025 from $28 million in 2024, primarily due to investment securities income of $7 million in 2025 compared to an expense of $12 million in 2024 .Other net periodic benefit loss: This loss decreased to $1 million in 2025 from $2 million in 2024 .Income tax benefit: The income tax benefit was - $1 million in 2025, compared to - $43 million in 2024 .Effective tax rate: The effective tax rate was a 7% benefit in 2025, compared to a 21% benefit in 2024 .Income from discontinued operations, net of income taxes: Income from discontinued operations increased to $2 million in 2025 from $1 million in 2024 .Other comprehensive income (loss), net of tax: Other comprehensive income was $2 million in 2025, compared to a - $93 million loss in 2024, mainly due to unrealized translation gains of $2 million in 2025 compared to losses of - $94 million in 2024 .Cash Flows (Three months ended December 31, 2025 vs. 2024)Cash provided (used) by operating activities from continuing operations: Cash provided by operating activities was $125 million in 2025, a significant improvement from - $30 million used in 2024 .Cash provided (used) by investing activities from continuing operations: Cash provided by investing activities was $2 million in 2025, compared to - $18 million used in 2024 .Cash used by financing activities from continuing operations: Cash used by financing activities was - $21 million in 2025, compared to - $22 million in 2024 .Cash used by discontinued operations: Cash used by discontinued operations was - $16 million in 2025, compared to - $10 million in 2024 .Free Cash Flow: Free Cash Flow was $111 million in 2025, compared to - $53 million in 2024 .Ongoing Free Cash Flow: Ongoing Free Cash Flow was $26 million in 2025, compared to - $26 million in 2024 .Capital expenditures: Capital expenditures decreased to $14 million in 2025 from $23 million in 2024 .Balance Sheet Highlights (as of December 31, 2025 vs. September 30, 2025)Cash and cash equivalents: Cash and cash equivalents increased to $304 million from $215 million .Accounts receivable, net: Accounts receivable, net decreased to $190 million from $242 million .Inventories: Inventories decreased slightly to $565 million from $568 million .Total assets: Total assets decreased to $4,519 million from $4,611 million .Total debt: Total debt increased to $1,387 million from $1,384 million .Debt as a percentage of capital employed: This remained consistent at 42% for both periods .Working capital: Working capital increased to $788 million from $782 million .Available liquidity (cash and revolving credit facility): Available liquidity increased to $900 million from $811 million .Asbestos litigation reserves: Asbestos litigation reserves decreased to $372 million from $389 million .Environmental remediation reserves: Environmental remediation reserves remained consistent at $226 million .Life Sciences Segment (Three months ended December 31, 2025 vs. 2024)Sales: Sales increased to $139 million from $134 million, driven by higher volume ($4 million) and favorable foreign currency ($3 million), partially offset by unfavorable price/mix (- $2 million) .Operating income: Operating income increased to $17 million from $14 million, due to higher volume ($2 million), lower costs ($1 million), and favorable foreign currency ($1 million), partially offset by unfavorable price/mix (- $1 million) .Depreciation and amortization: This remained consistent at $14 million .EBITDA: EBITDA increased to $31 million from $28 million .Personal Care Segment (Three months ended December 31, 2025 vs. 2024)Sales: Sales decreased to $123 million from $134 million, primarily due to the Avoca business sale (- $10 million), lower volume (- $2 million), and unfavorable price/mix (- $2 million), partially offset by favorable foreign currency ($3 million) .Operating income: Operating income remained consistent at $11 million .Depreciation and amortization: This decreased to $15 million from $18 million .EBITDA: EBITDA decreased to $26 million from $29 million .Adjusted EBITDA: Adjusted EBITDA decreased to $26 million from $30 million .Specialty Additives Segment (Three months ended December 31, 2025 vs. 2024)Sales: Sales decreased to $102 million from $115 million, mainly due to lower volume (- $13 million) and unfavorable price/mix (- $2 million), partially offset by favorable foreign currency ($2 million) .Operating loss: The operating loss increased to - $8 million from - $5 million, due to lower volume (- $3 million) and unfavorable price/mix (- $1 million), partially offset by lower costs ($1 million) .Depreciation and amortization: This decreased to $15 million from $16 million .EBITDA: EBITDA decreased to $7 million from $11 million .Adjusted EBITDA: Adjusted EBITDA increased to $15 million from $13 million, primarily due to improved cost performance offsetting lower sales volumes and pricing .Intermediates Segment (Three months ended December 31, 2025 vs. 2024)Sales: Sales decreased to $31 million from $33 million, due to lower volume (- $1 million) and unfavorable price/mix (- $1 million) .Operating income: Operating income decreased to $0 million from $3 million, due to higher costs (- $4 million) and lower volume (- $2 million), partially offset by favorable price/mix ($3 million) .Depreciation and amortization: This decreased to $1 million from $3 million .EBITDA: EBITDA decreased to $1 million from $6 million .Unallocated and Other (Three months ended December 31, 2025 vs. 2024)Operating loss: The operating loss was - $26 million, a significant decrease from - $202 million . This change was driven by a $2 million gain on sale of excess corporate property in 2025 compared to a - $183 million impairment charge related to the Avoca business in 2024 . Restructuring activities were - $4 million in 2025 compared to - $3 million in 2024, and environmental expenses were - $10 million in 2025 compared to - $1 million in 2024 .OutlookAshland Inc. is narrowing its full-year fiscal 2026 Adjusted EBITDA guidance to a range of $400 million to $420 million, accounting for approximately $11 million in temporary impacts from a Calvert City startup delay and weather-related disruptions in the second quarter . The company anticipates full-year sales between $1,835 million and $1,905 million, double-digit plus growth in Adjusted Diluted Earnings Per Share Excluding Intangibles Amortization, and approximately 50 percent conversion of Adjusted EBITDA to Ongoing Free Cash Flow, with capital expenditures of about $100 million . The manufacturing optimization program is on schedule to generate approximately $30 million in cost savings for fiscal 2026, while core end markets in Personal Care and Life Sciences are expected to remain resilient .