Earnings call transcript: Ecovyst Q3 2025 earnings beat EPS forecast, stock dips

Ecovyst Inc. delivered its Q3 2025 earnings, reporting an earnings per share (EPS) of $0.19, surpassing analysts’ expectations of $0.17, resulting in an EPS surprise of 11.76%. However, the company missed its revenue forecast, posting $204.9 million against the anticipated $215 million, a shortfall of 4.72%. Despite the earnings beat, Ecovyst’s stock fell by 5.99% to close at $8.27, reflecting investor concerns over the revenue miss and broader market conditions.

Key Takeaways

• Ecovyst’s EPS exceeded forecasts by 11.76%, but revenue fell short by 4.72%.
• Stock price dropped 5.99% post-earnings, highlighting market concerns.
• Significant focus on expanding sulfuric acid production and regeneration services.
• Sale of advanced materials segment for $556 million to streamline operations.
• Strong demand in mining sector, particularly for copper-related applications.

Company Performance

Ecovyst reported robust year-over-year growth in Q3 2025, with sales rising 33% to $205 million. The company highlighted its strategic shift towards focusing on regeneration services and virgin sulfuric acid, aiming to capitalize on growing demand in the mining and renewable energy sectors. Despite the revenue miss, the company’s adjusted EBITDA increased by 18%, indicating strong operational efficiency.

Financial Highlights

• Revenue: $204.9 million, up 33% year-over-year
• EPS: $0.19, exceeding the forecast of $0.17
• Adjusted EBITDA: $58 million, up 18%
• Adjusted free cash flow: $42 million year-to-date
• Full-year 2025 sales expected between $700 million and $740 million

Earnings vs. Forecast

Ecovyst’s Q3 2025 EPS of $0.19 beat the forecast of $0.17, marking an 11.76% surprise. However, actual revenue of $204.9 million fell short of the $215 million forecast by 4.72%. This mixed performance reflects ongoing challenges in meeting revenue expectations despite strong earnings.

Market Reaction

Following the earnings announcement, Ecovyst’s stock declined by 5.99%, closing at $8.27. This drop is notable as it brings the stock closer to its 52-week low of $5.24, suggesting investor apprehension about the revenue miss and broader market volatility. The stock’s reaction contrasts with the company’s earnings beat, indicating a cautious market sentiment.

Outlook & Guidance

Ecovyst anticipates continued growth in 2026, driven by increased regeneration and sulfuric acid volumes. The company expects full-year 2025 sales between $700 million and $740 million and adjusted free cash flow of $75 million to $85 million. Strategic initiatives include expanding storage and logistics in Houston and investing in the Waggaman facility to boost capacity.

Executive Commentary

CEO Kurt Bitting emphasized the importance of sulfuric acid in processing critical minerals, stating, "Virgin sulfuric acid will be essential for processing copper and other critical minerals." He also highlighted growth opportunities, noting, "We see that this business is one that can grow both volumetrically and through pricing."

Risks and Challenges

• Unplanned refinery customer outages impacting regeneration services.
• Potential volatility in sulfuric acid demand due to market fluctuations.
• Integration challenges at the Waggaman sulfuric acid plant.
• Global scarcity of sulfur molecules affecting supply dynamics.
• Economic pressures from the broader market environment.

Q&A

During the earnings call, analysts inquired about Ecovyst’s capital deployment strategy, with management confirming a leverage target of 2-2.5x. Questions also addressed inventory management during customer downtimes and emerging opportunities in the mining capital expenditure cycle.

Full transcript - Ecovyst Inc (ECVT) Q3 2025:

Bo, Conference Operator: Good morning, everyone. My name is Bo, and I will be your conference operator today. Welcome to the Ecovyst Third Quarter 2025 earnings call and webcast. Please note today’s call is being recorded and should run approximately one hour. Currently, all participants have been placed in a listen-only mode to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer period. If you would like to ask a question at that time, please press Star 1 on your telephone. If you do want to remove yourself from the queue, please press Star 2. When posing your question, we ask that you please pick up your handset to allow for optimal sound quality. Lastly, if you should need operator assistance today, please press Star 0. I would now like to turn the conference over to Mr. Gene Shields, Director of Investor Relations. Please go ahead, sir.

Gene Shields, Director of Investor Relations, Ecovyst: Thank you, Operator. Good morning and welcome to Ecovyst’s Third Quarter 2025 earnings call. With me on the call this morning are Kurt Bitting, Ecovyst Chief Executive Officer, and Mike Feehan, Ecovyst Chief Financial Officer. Following our prepared remarks this morning, we’ll take your questions. Please note that some of the information shared today is forward-looking information, including information about the company’s financial and operating performance, strategies, our anticipated end-use demand trends, and our 2025 financial outlook. This information is subject to risks and uncertainties that could cause the actual results and the implementation of the company’s plans to vary materially. Any forward-looking information shared today speaks only as of this date. These risks are discussed in the company’s filings with the SEC.

Reconciliations of non-GAAP financial measures mentioned in today’s call with their corresponding GAAP measures can be found in our earnings release and in the presentation materials posted in the investor section of our website. I’ll now turn the call over to Kurt Bitting. Kurt.

Kurt Bitting, Chief Executive Officer, Ecovyst: Thank you, Gene. Good morning. The third quarter of 2025 was a pivotal quarter for Ecovyst. Following an extensive strategic review of our advanced materials and catalyst segment, we announced an agreement to sell the business to TechMeap Energies for a purchase price of $556 million. The anticipated close of this transaction in the first quarter of 2026 is expected to result in net proceeds of approximately $530 million, and we currently plan to apply $450-$500 million of the net proceeds to reduce our long-term debt, resulting in an expected net debt leverage ratio of less than 1.5 times. Moving forward, our strategy will focus on acceleration of growth through organic growth initiatives and by pursuing attractive inorganic opportunities. In addition, we plan to return capital to our stockholders through an active stock repurchase program.

To facilitate this active return of capital to stockholders, the Ecovyst board has amended our existing $450 million stock repurchase plan to remove the April 2026 expiration date. The repurchase program has approximately $200 million of remaining capacity. During the third quarter, we repurchased $5.5 million of our common stock, and we intend to repurchase up to $20 million of our stock in the fourth quarter of 2025, with further repurchases anticipated in 2026. From a business standpoint, the company delivered positive results in the third quarter. Adjusted EBITDA increased 18%, driven by favorable contractual pricing for regeneration services and higher sales volume for virgin sulfuric acid. However, our financial results for the third quarter do not reflect the full potential of our regeneration services business, as regeneration volume was adversely impacted by unplanned and extended downtime at several of our customers’ refineries during the quarter.

We believe these outages are transitory, and we do not expect a significant impact from customer outages as we move into 2026. Turning to demand trends on slide five, we believe the near and longer-term outlook for the company remains favorable. For our regeneration services business, we expect favorable alkylation economics will continue to drive demand for our regeneration services, with growth in the business driven by both volumetric and pricing dynamics. In 2025, we expected a higher-than-average number of planned refinery customer maintenance outages. In addition to these planned outages, one refinery customer experienced extended downtime throughout most of the year due to a fire incident. Regeneration volumes in the third quarter were moderately impacted by unplanned customer production restrictions, including one customer who extended their planned turnaround by 30 days.

In the fourth quarter, we now expect two of our major refinery customers to execute unplanned outages to address mechanical issues. Looking out to 2026, we do not anticipate the same high level of planned or unplanned maintenance at our refining customers. For virgin sulfuric acid, we continue to see very strong demand in the mining sector. Mining currently accounts for 20%-25% of our virgin sulfuric acid sales, and as previously discussed, we have had two expansion projects with existing customers come online in the second half of this year. Global demand for copper is steadily rising due to its essential role in supporting infrastructure for data centers, renewable energy applications such as wind and solar power, and the production of electric vehicles. In addition, tariffs and trends towards onshoring are increasing the focus on domestic supply.

Longer term, we believe the strategic shift towards the mining and processing of critical and rare earth minerals in the U.S. will also contribute to an increase in sulfuric acid demand. We are already engaged with customers to address their needs for these future opportunities. We also supply oleum grades of sulfuric acid to producers and suppliers of the precursors of nylon, including nylon 6 and nylon 66. This end-use also represents 20%-25% of our sulfuric acid sales. With global overcapacity, we expect stability with modest volume growth in 2025. However, we believe the longer-term outlook for this end-use remains positive. The balance of our sulfuric acid sales supports varied industrial processes, including approximately 10% of our sulfuric acid that is under contract with our refining customers as makeup acid used in our regeneration process. This basket of industrial applications typically exhibits demand growth in line with GDP.

However, the prospect of further onshoring in the U.S. may drive incremental demand for sulfuric acid in a number of industrial applications. The addition of the Waggaman sulfuric acid plant has already had a positive effect on our manufacturing and supply chain network. With the positive network effect from the Waggaman sulfuric acid plant and capital projects underway to support organic growth, we believe we are well-positioned to address attractive growth in sulfuric acid demand over the next few years. These expansion projects include the expansion of tank capacity at our Houston site already underway, as well as planned investments in our Waggaman site to enhance efficiency and increase capacity for virgin sulfuric acid and regeneration services. At the same time, we are evaluating options for future debottlenecking and capacity additions to address longer-term growth in demand we see for virgin sulfuric acid.

Lastly, we continue to see robust demand for our Chem-32 catalyst activation services, and this is driven by activation of third-party catalysts used in both conventional and sustainable fuel production. We have already completed the first phase of our debottlenecking at our Orange, Texas site to support the growth in demand. As we look forward, we see favorable demand trends for the company, and we believe we have a solid strategic plan in place to position Ecovyst for growth through both organic and inorganic projects. I’ll now turn the call over to Mike, who will review our financial results.

Mike Feehan, Chief Financial Officer, Ecovyst: Thank you, Kurt. Good morning. In light of the announced agreement to divest our advanced materials and catalysts segment, which is now reported in discontinued operations, my comments this morning will be focused on the reported results from our continuing operations. In our materials, we continue to report eco-services as a separate single segment along with unallocated corporate costs. From a comparability perspective, no changes were made to the reporting of the eco-services segment sales or adjusted EBITDA results. We are pleased with our results for the quarter, growing our sales and adjusted EBITDA by double digits, generating over $40 million of adjusted free cash flow, and continuing to execute on our stock repurchase program. Our strong cash position and liquidity continue to provide us with the flexibility needed to execute on our capital allocation strategy.

At the top line, third-quarter sales from continuing operations were $205 million, up $51 million, or 33%. Excluding the $25 million impact of higher sulfur costs passed through in price, sales were up nearly 17%. Total adjusted EBITDA, including both segment eco-services adjusted EBITDA and unallocated corporate costs, was $58 million, up 18%, reflecting the benefits of positive pricing and volume. I will refer you to the adjusted EBITDA bridge on slide nine, as this highlights the major components of the period-over-period change in adjusted EBITDA. Pricing, excluding the pass-through of higher sulfur costs, was up $9 million compared to the third quarter of 2024, primarily driven by favorable contractual pricing in our regeneration services business. The pass-through effect of higher sulfur costs was approximately $25 million in the quarter, with the pass-through resulting in no material impact to adjusted EBITDA.

Overall volume was favorable in the third quarter, led by higher sales volume for virgin sulfuric acid and the contribution from our Waggaman site. This was partially offset by lower regeneration services associated with the unplanned and extended customer downtime. Other costs increased $7 million, principally reflecting the incremental fixed cost associated with the acquisition of our Waggaman site, along with higher manufacturing costs associated with general inflation and transportation costs. Turning to the results of the eco-services segment, our top-line sales growth was driven by both price and volume, as previously mentioned. The price variance was driven primarily by favorable contractual pricing for regeneration services. Pricing for virgin sulfuric acid and other end-uses were marginally higher and remained stable during the quarter. At the volume level, we experienced strong growth in virgin sulfuric acid, led by mining activity and general industrial end-use.

We also saw volume contribution from our new Waggaman assets driving the increase in sales. The higher virgin volume was partially offset by lower regeneration services associated with the unplanned and extended customer downtime, as many of our refinery customers were down for extended periods of time during the quarter. Segment adjusted EBITDA for eco-services was $64 million, up 15%, and within the guidance range provided during our second quarter call. The increase compared to the prior year reflects the sales impacts previously described, partially offset by higher manufacturing costs associated with general inflation and slightly higher transportation costs. In addition, while our third-quarter financial results include Waggaman, the sales contribution was largely offset by integration and other costs.

I also want to highlight that the decrease in the Adjusted EBITDA margin % was largely a function of the pass-through effect of higher sulfur costs, which increased sales with no associated impact on Adjusted EBITDA. Turning to the cash and debt on slide 11, I will comment on our current and expected cash generation for 2025, as well as our anticipated debt position upon a successful closing of the divestiture of the AM&C business. Through the first nine months of the year, we generated Adjusted free cash flow of $42 million. We continue to expect strong cash generation in the fourth quarter and have increased our full year 2025 expectations for Adjusted free cash flow to a range of $75-$85 million.

At quarter end, we had available liquidity of $185 million, made up of $99 million of total cash, of which $82 million is from continuing operations and $17 million is from discontinued operations, along with availability under our ABL facility of approximately $86 million. Regarding our debt position, with an anticipated first-quarter close for the disposition of our AM&C segment, we currently anticipate applying between $450-$500 million of the net proceeds to reduce our term loan, resulting in an expected cash balance of between $150 and $200 million. This would lead to an expected net debt leverage ratio of less than 1.5 times. Moving forward, we believe our significantly strengthened balance sheet and the strong cash generation profile of our business will provide us with ample flexibility as we look to accelerate organic and inorganic growth opportunities and return capital to shareholders through an active stock repurchase program.

Turning to slide 12, in light of the announced agreement to divest the AM&C segment, we have revised our 2025 guidance to reflect our expectations for our financial results from continuing operations. In addition, while we are not able to provide detailed guidance for 2026, given that we remain positive about the outlook for our business, we wanted to provide some high-level commentary on the expectations for 2026. Overall, we see positive demand fundamentals for the balance of 2025 and into 2026. However, we expect the unplanned refinery customer outages that we have experienced during the year to spill into the fourth quarter, impacting regeneration services volume. We expect full-year sales to be between $700 and $740 million, including an expectation of higher sulfur cost pass-through of approximately $70 million. Looking into 2026, we expect increased regeneration volume on less customer turnarounds and contributions from positive contractual pricing.

In addition, we anticipate higher volume for virgin sulfuric acid, benefiting from robust demand in mining applications and the incremental contributions from our Waggaman assets. For 2025, we expect corporate costs of approximately $30 million, slightly favorable to our previous guidance range. As we have previously noted, following the disposition of the advanced materials and catalysts segment, we expect a slight reduction in corporate costs in 2026 of a few million dollars compared to this revised guidance for 2025. Our expectations for Adjusted EBITDA from continuing operations for 2025, including corporate costs, will be approximately $170 million. This implies Adjusted EBITDA for our Eco-Services segment to be approximately $200 million. Slightly below our previous guidance range. This reflects a one-time drag on EBITDA from the cumulative impact of unplanned and extended customer downtime we have experienced this year, which has been partially offset by higher-than-anticipated virgin acid sales.

Excluding the impact of the unplanned and extended customer downtime, we would have expected Adjusted EBITDA for our Eco-Services segment to have landed in the middle of our recent guidance range of $205-$250 million. As mentioned earlier, we increased our adjusted free cash flow range to between $75-$85 million. For 2026, with the exclusion of the AM&C business, we expect free cash flow to be modestly lower. CapEx for 2025 is expected to be between $60-$70 million. We anticipate higher CapEx in 2026, driven by the inclusion of our Waggaman site and as we look to accelerate organic growth initiatives. Interest expense attributable to continuing operations is expected to be in the range of $32-$34 million.

Note that while our debt balance remains the same on the balance sheet, the interest expense in the income statement is adjusted as a portion has been allocated to discontinued operations on the basis of our mandatory debt repayment of our term loan. As we expect the paydown of the term loan to be in the range of $450-$500 million. Cash interest in 2026 is expected to be lower from a range of $46-$50 million in 2025 to a range of $21-$25 million in 2026. The effective tax rate for 2025 remains in the mid-20% range. Then, looking into 2026, with the disposition of the AM&C segment and with some benefits arising from the 2025 tax bill, we believe our cash tax position will benefit, but the effective tax rate will remain in the mid-20% range.

Lastly, we have continued our practice of providing data on the schedule of planned turnarounds, which is located in the appendix of the presentation. I will now turn the call back to Kurt for some closing remarks.

Kurt Bitting, Chief Executive Officer, Ecovyst: Thank you, Mike. This year has proven to be another challenging year for the chemical industry. However, Ecovyst has continued to demonstrate resilience. We believe this is attributable to our leading supply share positions, our longstanding contractual customer relationships, and the fact that we continue to serve key industries with critical products and services. Moreover, as we look forward, we see compelling opportunities for growth for our regeneration services business and for virgin sulfuric acid. The announced divestiture of our advanced materials and catalyst segment will transform Ecovyst. Following the close of the transaction and as we turn our focus to the implementation of our strategies for growth and value creation for our stockholders, we expect to do so with a more stable business profile, a significantly strengthened balance sheet, and a liquidity position and cash generation capability that will allow us to execute on our growth initiatives.

In parallel, we intend to return capital to our stockholders through an active stock repurchase program. As we have indicated, we intend to repurchase up to $20 million of stock in the fourth quarter. Post-closing and after the reduction of our term loan, we expect to have a cash position of $150-$200 million, which will provide ample funding for growth projects and position us for the additional return of capital to stockholders. Specifically, with regard to capital allocation, we will prioritize funding organic growth projects that support our growth expectations that I mentioned earlier. At the same time, we will continue our disciplined approach towards evaluating inorganic growth opportunities. Consistent with our recent acquisitions of Chem-32 and the Waggaman assets, we plan to focus our inorganic growth strategy on targets that are closely aligned with our operations and enhance our current capabilities.

Beyond the funding of our growth initiatives, we believe the best opportunity for value creation that benefits our stockholders remains an active stock repurchase program. Virgin sulfuric acid will be essential for processing copper and other critical minerals, while sulfuric acid regeneration will continue to support clean fuel production. We are enthusiastic about the opportunities that lie ahead for Ecovyst. Mike summarized our high-level expectations for 2026, and based upon these expectations, we anticipate positive growth and favorable financial results in 2026. We look forward to sharing updates with you as we close the sale of our advanced materials and catalyst segment and as we move forward with the implementation of our strategy to accelerate growth for Ecovyst. At this time, I will ask the operator to open the line for questions.

Bo, Conference Operator: Thank you, Mr. Bitting. Ladies and gentlemen, at this time, if you do have any questions or comments, simply press Star 1 on your telephone. If you would like to remove yourself from the queue, you can do so by pressing Star 2. We go first today to John McNulty of BMO Capital Markets.

Various Analysts, Analyst, Various (BMO Capital Markets, Citi, KeyBanc, BWS Financial, Jefferies): Yeah, thanks very much for taking my question. So maybe a first one with regard to cash deployment. It sounds like you’re looking to accelerate both organic and inorganic growth, as well as some of the buyback. So I guess maybe a question on that. Are there any specific projects internally that you’ve kind of had on hold that now you kind of have the opportunity to really kind of go full throttle into? And I guess, how do you think about balancing that capital deployment into growth opportunities versus returning it to the shareholders through buybacks when your stock’s at kind of this valuation?

Kurt Bitting, Chief Executive Officer, Ecovyst: Yeah, thanks, John. So I’d say first, to hit on the growth opportunities we obviously have. A lot of excitement around some of the end segments in our business, particularly as it comes to mining. So we have some storage and logistics expansion work that we’re conducting in Houston that’s already underway that we referenced in our comments, as well as additional investments at the Waggaman facility, which will give us, I’d say, further logistics and capacity at that site as well to support our network. So we’re able to advance those quicker to meet some of the near-term demand trends that we see. I think Ecovyst is in a good position, really, to go after our growth opportunities, both organic and inorganic. But at the same time, the share repurchases remain a pillar of our capital allocation strategy.

And quite frankly, we’re going to prioritize things as they give the best value creation to our shareholders, right? So as we see organic opportunities, we’ll make those investments. As we see our shares being undervalued, as we believe they are now, we’ll do the share repurchases.

Various Analysts, Analyst, Various (BMO Capital Markets, Citi, KeyBanc, BWS Financial, Jefferies): Got it. Fair enough. And then maybe can you give us some color as to how you’re thinking about pricing and its impact for next year? I mean, you’ve had some pretty decent success so far. It seems like you’re still seeing further upward pricing momentum. I guess, can you help us to think about how that may carry into 2026 a little bit more?

Kurt Bitting, Chief Executive Officer, Ecovyst: Yeah, I think it’s a similar pace as we’ve said before. So we’ll have our typical contract on the regeneration side that will reprice, as you’ve seen flow through in the history of Eco-Services. In terms of virgin sulfuric acid, I point to two things. I think there’s obviously sulfur prices are way up, which Mike pointed to in his comments, which those prices in general look higher year over year. We see really good demand heading into next year, especially in terms of the mining sector, which will support general virgin sulfuric acid pricing. And then I would point to our Waggaman facility, right, where a lot of those contracts that were inherited with the acquisition of that are rolling off this year that will be repriced going into next year as well.

Various Analysts, Analyst, Various (BMO Capital Markets, Citi, KeyBanc, BWS Financial, Jefferies): Great. Thanks very much for the call.

Bo, Conference Operator: Thank you. We’ll go next now to Patrick Cunningham of Citi.

Kurt Bitting, Chief Executive Officer, Ecovyst: Hi, good morning. It’s sort of a related question to that last one or your last comment on the Waggaman integration. Just how should we think about how that’s progressing and what should we expect in terms of the potential EBITDA lift and synergies into next year? Is more of the uplift coming from the positive network effects, or is more of the effect coming from contract repricing? Yeah, I think it’s really both. So. The contract repricing is obviously an important element. That’ll be somewhat, as we’ve talked about, the uplift there will be somewhat offset by we are going to have a pretty significant turnaround there that we’re planning for at the end of Q1 at that site.

But it also is already having a positive network effect, and we expect that to carry on into next year and grow over time as mining and some of the other opportunities become more and more. Demand more and more sulfuric acid, Waggaman will play a bigger part. So some of that is already happening within the system. Got it. And I guess just on the long-term financial framework, obviously, the business is a more stable business profile, predictable earnings and cash flow upside from critical minerals. Do you have any early thinking on how we should think about the growth algorithm? Is it a EPS growth range that’s bolstered by pretty ratable repurchases? Is it just a simple sort of free cash flow conversion percentage, or is that maybe too much stability and sort of predictability that I’m forecasting into what the go-forward business might look like?

Bo, Conference Operator: Yeah, Patrick, thanks for the question. I think we see some very positive trends as we articulate it going into 2026. And certainly with the new balance sheet and the amount of cash generation we see, we see that being a very positive aspect that would go not only into 2026 but beyond, right? So we do continue to expect to have a high cash yield on our business. Certainly, we will continue to drive organic investments that we think are necessary, certainly impacting the cash line as we take that first dollar from operations and put it back into the business for quality organic growth projects. But we do see a strong free cash flow generation going forward. We do see that this business is one that can grow both volumetrically and through pricing, given our structure.

So we see that to be something that will continue to go out beyond 2026, whether that’s in the mid-single digits or mid-single digit plus. We certainly expect to provide some more granularity around 2026 as we come into next year when we provide our full 2026 guidance, and we can give some additional clarity on kind of where we see the rest of the business going out more on a long-term basis.

Various Analysts, Analyst, Various (BMO Capital Markets, Citi, KeyBanc, BWS Financial, Jefferies): Great. Thank you.

Bo, Conference Operator: Thank you. We’ll go next now to Alexey Yefremov of KeyBanc Capital Markets.

Ryan Ahn, Analyst Representative, KeyBanc Capital Markets: Hey, guys. Good morning. This is Ryan Ahn for Alexey. Mike, I just wanted to kind of circle back to thinking about debt reduction and your leverage. If I think back to investor day about two years ago, I think your long-term target was leverage in the two to two and a half times range. And now you guys are talking about being below one and a half times after you use the AM&C proceeds. So has your thought changed in terms of kind of what your target wants to be longer term, or is this maybe short-term kind of action and longer term we can kind of re-lever back up?

Bo, Conference Operator: Yeah, thanks, Ryan, for the question. So with the net proceeds that we’re expecting, regardless of the debt paydown, we’re going to start out with a net debt leverage ratio of below one and a half times, right? So. Our gross leverage ratio, as we articulated in the materials, will probably be closer to two times. So this is something that we think is going to ebb and flow over time based on how much cash we want to use for some of our capital allocation priorities, right? So we believe that probably below one and a half times is probably too low. We want to use our cash appropriately to grow the business. But I believe that we can also flex up to a higher level, which we’ve talked about before, just given our strength, our stability, our free cash flow generation to execute on our capital allocation strategies.

So our target of two to two and a half times is still a relevant target. We just think that it’s going to ebb and flow depending on both the timing of when we divest the AM&C business and the net leverage that will result and what kind of capital allocation strategies we deploy over the coming years.

Ryan Ahn, Analyst Representative, KeyBanc Capital Markets: Okay. That makes sense. And then just a second question. On slide five, I mean, nylon is kind of really the only cautionary short-term demand outlook. So wondering kind of how you’re thinking about this trending into 2026. I know the long-term outlook is pretty strong, but I think customers we were talking about maybe gaining some share there in the near term. So maybe into early 2026, how you’re thinking about nylon. Thank you.

Kurt Bitting, Chief Executive Officer, Ecovyst: Yeah. I mean, I think for this year, the way we look at it, it’s been up moderately this year versus last year. So, recovery has been good. For next year, I think we expect it to kind of be status quo with where we’re at. We don’t expect a big movement up or down either way. But long-term, as we said, we’re confident in the fundamentals on nylon.

Bo, Conference Operator: Thank you. We’ll go next now to Hamed Khorsand of BWS Financial.

Various Analysts, Analyst, Various (BMO Capital Markets, Citi, KeyBanc, BWS Financial, Jefferies): Hey, good morning. Could you just talk about the clarity you have from your customers? As they’re talking to you about these downtimes that are unexpected, and how are you managing inventory through that process?

Kurt Bitting, Chief Executive Officer, Ecovyst: Yeah. Thanks for the question, Hamed. I think. Yeah, this year in 2025, coming into the year, we expected it to be not only a heavy refining turnaround year across the industry, but as well in our customer base. And that was reflected in our original guidance. I think what’s happened as the year has gone on, we had one customer that suffered a fire at the beginning of the year, as we mentioned in our comments. And then there’s been a multitude of various things, which has one, created an additional downtime for a customer of 30 days, and then others taking unplanned outages, which outward economics are favorable. So these customers really try to avoid doing these things as much as possible. We do generally will get.

For a planned turnaround, almost one to two years’ notice in advance of something because these are major equipment overhauls where hundreds of contractors are coming on site to these refineries. They’re not impromptu outages. When they have disruptions like they are now and things are going sideways on them mechanically, they have to plan those very quickly. And those can be a matter of weeks in terms of the when they plan those types of downtime. So we don’t necessarily, when there’s unplanned outages, get a whole bunch of notice in advance of that. What we have been able to do through this, I guess, this period of these unplanned outages is we obviously have ramped up our virgin sulfuric acid volume, and we’ve been happy with where that’s at this year. And we try to manage inventories accordingly where we can.

Various Analysts, Analyst, Various (BMO Capital Markets, Citi, KeyBanc, BWS Financial, Jefferies): Okay. And just to follow up on it, going forward, is the best way to measure the business on a rolling two-year process because of these maintenance issues?

Kurt Bitting, Chief Executive Officer, Ecovyst: No, Hamed, that’s a good question. Refinery outages can range anywhere from two to four years in terms of the alkylation equipment. So I wouldn’t say two years is a good marker. Plus, there’s volume increases that go on with refineries over time and different things. So it’s probably a longer cycle than that.

Various Analysts, Analyst, Various (BMO Capital Markets, Citi, KeyBanc, BWS Financial, Jefferies): Okay. Thank you.

Bo, Conference Operator: Thank you. We’ll go next now to Lawrence Alexander at Jefferies.

Various Analysts, Analyst, Various (BMO Capital Markets, Citi, KeyBanc, BWS Financial, Jefferies): Can you give some updated perspective on kind of the emerging kind of mining CapEx cycle in the U.S. and what that could mean for you? First, in terms of potential capacity spend over, say, the next five, seven years to keep up with demand for virgin sulfuric acid, and also the degree to which you can get any operating margin left or earnings left to sort of a structurally higher sulfuric acid price if one were to occur?

Kurt Bitting, Chief Executive Officer, Ecovyst: Sure. Great question, Lawrence. Thanks for that. I think when you look at near term, and when I say near term, maybe one to five years, there’s a lot of mining projects, particularly in the copper space, that are coming online in the Southwest now that are either extensions of existing projects or new projects that have been under permit and review for some period of time or even higher tech leaching technologies. Those will require significant amounts of sulfuric acid, which we’re obviously in discussions with customers now to service that demand through some of the things I talked to you about with expansions at Houston and Waggaman, which will allow us to put a lot more tons down range there to meet that demand. Beyond that, there’s even more significant projects, right, because there’s such a deficit for the minerals going forward.

And those are going to require larger capacity expansions. And we are in conversations with customers on how we meet that further demand. And we want to make the investments there and be the supplier of choice for those projects.

Various Analysts, Analyst, Various (BMO Capital Markets, Citi, KeyBanc, BWS Financial, Jefferies): Thank you.

Kurt Bitting, Chief Executive Officer, Ecovyst: And I think your question, just to get back to the pricing, I mean. And the uplift in margin, we do see two things going on. Long-term demand for sulfuric acid rising because of the mining activity and the processing of the minerals in the U.S. and onshoring, driving that. At the same time, the sulfur molecule is becoming scarce around the globe, right, as people are using it for obviously mining applications like they are in the U.S. or fertilizer and so forth. And you will see that. We believe you’ll see the value of sulfuric acid rise over time accordingly.

Various Analysts, Analyst, Various (BMO Capital Markets, Citi, KeyBanc, BWS Financial, Jefferies): Got it. Thank you.

Bo, Conference Operator: Thank you. And gentlemen, it appears we have no further questions in queue at this time. So this will bring us to the conclusion of the Ecovyst Third Quarter 2025 earnings call and webcast. Thank you all for joining us today, and we wish you all a great day.

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