AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 31/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Application-specific selection, multi-quarter qualification and upfront expense establish a bounded incumbent barrier. Trade secrets and monetized IP add support, but relative superiority and displacement costs remain incompletely demonstrated.
durability · 2/4 · Decades-long customer relationships support persistence. However, new nodes require fresh design wins, and enforcement of certain licensed rights depends on DuPont. No exceptional duration of economic protection is established.
customer dependency · 2/4 · Process-specific materials and recurring consumable demand create technical dependency within qualified applications. Commercial dependency is limited by cancellation rights and the absence of long-term purchase commitments.
erosion resilience · 2/4 · Trade secrets, patents and enduring customer relationships provide defenses. Actual IP settlement costs and partial enforcement dependence constrain resilience; neither proves realized competitive erosion.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · Combined local price including metals pass-through and product mix declined 1% in 2025 and 2% in 2024 while volume increased. These observed outcomes provide weak support for pricing power, although mix and metals effects prevent attributing the declines entirely to selling prices.
retention · 2/4 · Assessed indirectly from customer relationships averaging over 30 years, consumable demand and qualification friction. These support repeat demand, but do not establish an application-level retention rate; customers retain cancellation flexibility.
margin resilience · 3/4 · Cost of sales remained 54% of revenue in 2024 and 2025. Q2 and first-half 2026 adjusted EBITDA margins were 30.2% and 30.7%, versus 30.3% and 31.0%; corresponding pro forma comparisons were 29.7% and 29.9%. This demonstrates strong near-term resilience, although lower input costs aided earlier results and non-GAAP exclusions limit inference about all-in economics or pricing.
contractual freedom · 1/4 · Actual terms provide fragile commercial protection: customers have no long-term purchase commitments and may cancel or change quantities, while some supply contracts impose minimum purchases. The catalog establishes these constraints but supplies no explicit unilateral repricing rights.
Predictability—
At least three consecutive published annual periods are required for predictability; missing years are not skipped.
Financial strength72
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 56.06
- netDebtEbitGrade
- 34.55
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 95.63
- Debt / FCF (x)
- 4.08
- Net debt / operating income (x)
- 3.27
- Interest coverage (x)
- 14.63
- Current ratio (x)
- 1.95
Capital allocation—
Missing annual observations required by this category.
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Operating cash generation rose during 2023–2025, and the completed loan repricing reduced borrowing spreads. First-half 2026 operating cash of $376 million covered $212 million of capital expenditure and $50 million of repurchases, but cash generation declined as debt interest and working-capital needs increased. Higher transformation charges and the prospective $10 million CFO buyout commitment warrant scrutiny; investment and repurchase returns are unproven.
incentive alignment · 3/4 · Actual equity grants, three-year relative-TSR and adjusted-EBITDA PSU metrics, adopted ownership requirements, clawbacks and hedging restrictions demonstrate strong alignment mechanisms. Ownership compliance and payout outcomes remain unverified. The approved prospective CFO buyout has front-loaded vesting and RSU acceleration on qualifying termination, tempering its retention protection; delivery and vesting are not established.
execution · 2/4 · Assessed partly through indirect operating evidence: both segments increased first-half sales, production supported growth, historical cash generation improved and loan repricing was completed. Rising transformation charges and weaker interim operating cash offset these achievements. Transformation benefits and sustained standalone execution remain unproven.
governance · 3/4 · An independent chair, nine independent directors out of ten, fully independent committees and adopted accountability policies establish strong current structures. Completed elections and the board's annual say-on-pay decision demonstrate functioning processes. The board remains classified until its scheduled phase-out, and separation agreements lacked independent Qnity representation; long-term effectiveness remains untested.
Evidence
Fabricators choose specific materials for each CMP process based on performance needs of each CMP application and node.
Business / CMP application-specific materials selection · Filed 26/02/2026
Our growth depends on our ability to secure design “wins”, which are instances when a customer validates one of our materials for use in a new node, package architecture, or end-product.
Business / customer validation and design wins · Filed 26/02/2026
Because the qualification cycle in semiconductors and advanced electronics can extend multiple quarters and often requires upfront expense, the timing, size, and scope are often difficult to predict.
Business / qualification duration and upfront expense · Filed 26/02/2026
Notably, the average length of our relationship with our top 10 customers exceeds 30 years, solidifying our position as a partner of choice throughout the electronics value chain.
Business / top-ten customer relationship duration · Filed 26/02/2026
Our products are consumable or unit-driven, with over 90% of Qnity’s revenue in 2025 generated from products that are either utilized in the manufacturing process or incorporated into final electronic devices.
Business / consumable and unit-driven revenue · Filed 26/02/2026
While we have contracts with certain top customers, these contracts do not contain long-term purchase commitments.
Business / absence of long-term customer purchase commitments · Filed 26/02/2026
Our customers may cancel their orders, change production quantities from forecasted volumes or delay production for reasons beyond our control.
Business / customer cancellation and quantity flexibility · Filed 26/02/2026
Europe, Middle East and Africa.
2025 versus 2024
We reported net sales for the year ended December 31, 2025 of $4.8 billion, up 10% from $4.3 billion for the year ended December 31, 2024, primarily due to an 11% increase in sales volume partially offset by a 1% decrease in local price including metals pass-through and product mix.
MD&A / 2025 sales, volume and local price including metals pass-through and product mix · Filed 26/02/2026
2024 versus 2023
We reported net sales for the year ended December 31, 2024 of $4.3 billion, up 7% from $4.0 billion for the year ended December 31, 2023, primarily due to a 10% increase in sales volume partially offset by a 2% decrease in local price including metals pass-through and product mix and a 1% unfavorable currency impact.
MD&A / 2024 sales, volume and local price including metals pass-through and product mix · Filed 26/02/2026
Many of the processes we use to make products are kept as trade secrets which, from time to time, may be licensed to third parties.
Business / manufacturing trade secrets and third-party licensing · Filed 26/02/2026
Based on our patent estate at December 31, 2025, we hold about 7,000 patents and patent applications globally.
Business / patents and patent applications at December 31, 2025 · Filed 26/02/2026
Significant Items for the Year Ended December 31, 2024 Semiconductor Technologies Interconnect Solutions Corporate Total In millions Restructuring and asset related charges - net 1 $ (1) $ (11) $ 4 $ (8) Legal costs 2 (23) — — (23) Gain on licensing agreement 3 13 — — 13 Total $ (11) $ (11) $ 4 $ (18) 1.
MD&A / 2024 significant items, licensing gain and legal costs · Filed 26/02/2026
3. Reflects the license fee income received under an intellectual property license agreement.
MD&A / licensing gain explanatory footnote · Filed 26/02/2026
While we believe that our intellectual property estate, taken as a whole, provides a competitive advantage in many of our businesses, no single patent, trademark, license or group of related patents, trademarks or licenses is in itself essential to us as a whole or to any of our businesses.
Business / management's IP advantage assertion and portfolio essentiality · Filed 26/02/2026
We are dependent to a certain extent on DuPont to prosecute, maintain, defend and enforce certain of the intellectual property licensed under our Intellectual Property Cross-License Agreement with DuPont.
Risk factors / dependence on DuPont for licensed-IP enforcement · Filed 26/02/2026
If DuPont chooses to not enforce the intellectual property licensed to us under the Intellectual Property Cross-License Agreement, we may not be able to prevent competitors from making, using and selling competitive products and services.
Risk factors / consequences of DuPont not enforcing licensed IP · Filed 26/02/2026
2. Reflects legal settlement charges relating to an intellectual property matter.
MD&A / IP settlement charges explanatory footnote · Filed 26/02/2026
In addition, and where the supply market for key raw materials is concentrated, we take additional steps to manage exposure to supply chain risk and price fluctuations through, among other things, negotiated long-term contracts some of which include minimum purchase obligations.
Risk factors / raw-material supply contracts with minimum purchase obligations · Filed 26/02/2026
Cost of sales as a percentage of net sales remained flat at 54% for the years ended December 31, 2025 and 2024.
MD&A / 2025 and 2024 cost of sales as a percentage of sales · Filed 26/02/2026
Cost of sales increased for the year ended December 31, 2024 due to increased sales volume of 6% were offset by decreases in raw materials, logistics and energy costs.
MD&A / 2024 raw-material, logistics and energy cost reductions · Filed 26/02/2026
Adjusted Operating EBITDA Margin (non-GAAP)
30.2
%
30.3
%
30.7
%
31.0
%
Adjusted Pro Forma Operating EBITDA Margin (non-GAAP)
30.2
%
29.7
%
30.7
%
29.9
%
1.The six months ended June 30, 2025 excludes accrued interest income earned on employee retention credits.
Supplemental schedules / Q2 and first-half adjusted and pro forma EBITDA margins · Filed 04/08/2026
Adjusted Operating EBITDA by Segment and Adjusted Pro Forma Operating EBITDA
Three Months Ended
Six Months Ended
In millions (Unaudited)
Jun 30, 2026
Jun 30, 2025
Jun 30, 2026
Jun 30, 2025
Semiconductor Technologies
$
253
$
226
$
516
$
473
Interconnect Solutions
197
137
366
251
Corporate
(19)
(9)
(40)
(15)
Adjusted Operating EBITDA (non-GAAP)
$
431
$
354
$
842
$
709
Pro forma adjustments 1, 2
—
(7)
—
(26)
Adjusted Pro Forma Operating EBITDA (non-GAAP)
$
431
$
347
$
842
$
683
1.Reflects the incremental costs required to operate as a stand-alone entity in the amount of $11 million and $33 million for the three and six months ended June 30, 2025, respectively.
Supplemental schedules / period labels, segment EBITDA and pro forma adjustments · Filed 04/08/2026
Cash generated from operating activities was $1,273 million, $1,061 million and $882 million in 2025, 2024 and 2023, respectively.
MD&A / 2023–2025 operating cash generation · Filed 26/02/2026
In 2025, cash flows provided by operating activities increased compared to 2024, primarily due to higher earnings and an increase in accounts payable and employee related liabilities.
MD&A / drivers of 2025 operating cash growth · Filed 26/02/2026
Depreciation of property, plant and equipment
93
81
Amortization of definite-lived intangible assets
102
105
Stock-based compensation
25
8
Credit for deferred income tax and other tax related items
(30)
(29)
Net gain on sales of assets
(5)
—
Restructuring and asset related charges - net
—
19
Net periodic pension benefit cost
2
3
Periodic benefit plan contributions
(3)
(2)
Earnings of nonconsolidated affiliates less dividends received
(24)
(22)
Other net loss
14
—
Changes in assets and liabilities:
Accounts and notes receivable
(152)
(28)
Inventories
(77)
(41)
Other assets
(13)
(4)
Accounts payable
134
48
Accrued and other current liabilities
(10)
(28)
Other noncurrent liabilities
44
16
Income tax liabilities
(22)
(43)
Cash provided by operating activities
$
376
$
480
Investing Activities
Capital expenditures
(212)
(153)
Proceeds and adjustments to proceeds from sales of property and businesses, net of cash divested
6
—
Other investing activities, net
1
—
Cash used for investing activities
$
(205)
$
(153)
Financing Activities
Repayments on long-term debt
(12)
—
Repurchases of common stock
(50)
—
Employee taxes paid for share-based payment arrangements
(7)
—
Distributions to noncontrolling interests
(6)
(8)
Dividends paid to stockholders
(34)
—
Net transfers to Parent
—
(322)
Cash used for financing activities
Interim cash-flow statement / first-half operating cash, capital expenditures and financing · Filed 04/08/2026
The decrease in cash provided by operating activities is primarily related to payments of interest on our long-term debt, which was not outstanding as of June 30, 2025, and an increase in net cash used for working capital.
MD&A / debt interest and working-capital effects on operating cash · Filed 04/08/2026
The First Amendment reduced the applicable margin on term SOFR borrowings under the Senior Secured Term Loan Facility from 2.00% to 1.75%, with no material changes to principal, maturity, amortization, or covenant structure.
Recent developments / completed term-loan spread reduction · Filed 04/08/2026
For the first six months of 2026, transformation, integration and other charges were $70 million, up from $19 million for the same period in the prior year.
MD&A / first-half transformation, integration and other charges · Filed 04/08/2026
In the first quarter of 2026, the Company granted 0.3 million RSUs and 0.1 million performance based stock units ("PSUs").
Share-based compensation / actual first-quarter 2026 equity grants · Filed 04/08/2026
60% PSUs Payouts to be based on achievement of Relative TSR and Adjusted Operating EBITDA goals over three years.
Proxy / three-year PSU performance metrics · Filed 08/04/2026
36 Compensation Discussion & Analysis Pay Mix for 2026 Compensation CEO Other NEOs Executive Compensation Governance Best Practices After the Spin-Off, the Qnity Committee adopted Qnity’s executive compensation programs which include the following best practices consistent with those embedded in DuPont’s programs in effect prior to the Spin-Off: What We Do Maintain a pay mix that is heavily performance-based Actively engage with stockholders Align executive compensation outcomes with company and individual performance Annually assess peer group composition and competitive compensation practices Seek annual stockholder advisory approval of executive compensation Maintain strong stock ownership requirements of six times base salary for the CEO and two times base salary for the other executive officers Conduct an annual executive talent review and discussion on succession planning Maintain a robust compensation clawback policy covering both cash and equity Review executive compensation statements (tally sheets) Conduct annual compensation risk assessments What We Don’t Do Provide single-trigger change in control agreements or excise tax gross ups Grant options below market value, extend original option terms, reprice, reload or exchange underwater options without stockholder approval Permit hedging or pledging of the Company’s securities Include a liberal share counting provision in our equity plan Guaranteed annual salary increases or bonuses Provide minimum payouts under the Long-Term Incentive Plan Provide uncapped short and long-term incentive payouts Provide excessive perks 2026 Proxy Statement 37 Compensation Discussion & Analysis Overview of 2025 Program Elements This section describes the elements of DuPont’s executive compensations programs in effect prior to the Spin-Off, how DuPont determined the size of each element and the rationale for providing each element.
Proxy / adopted compensation, ownership, clawback and trading policies · Filed 08/04/2026
Board Composition & Independence •Independent Board Chair with significant responsibilities •Majority independent Board with 9 of 10 directors being independent •Balanced Board with a large breadth of varied skills, experiences, and areas of expertise •Fully independent Audit, People and Compensation, and Nomination and Governance Committees •Independent Executive Sessions with only independent directors at every regularly scheduled Board and Committee meeting •Diverse Board with directors identifying as women, ethnically and racially diverse and international backgrounds Strong Governance Practices •Annual Board & Committee evaluations •Robust director Code of Conduct •Restrictions on overboarding •Mandatory retirement for directors after reaching age 75 •Significant stock ownership guidelines for directors (5x annual cash retainer) •Majority vote standard in uncontested elections with plurality carve-out for contested elections and mandatory resignation policy •Phase-out of classified board, with all directors standing for election annually beginning in 2028 8 Voting Roadmap Key Executive Compensation Highlights Before our Spin-off from DuPont on November 1, 2025 (Spin-off), our NEOs’ 2025 compensation was determined in accordance with DuPont’s compensation philosophy and program design.
Proxy / board independence, committee structure and classified-board phase-out · Filed 08/04/2026
Such agreements were intended to be entered into on arm’s-length terms similar to those that would be agreed with an unaffiliated third party such as a buyer in a sale transaction, but we did not have an independent board of directors or a management team independent of DuPont representing our interests while such agreements were being negotiated.
Risk factors / lack of independent representation in separation-agreement negotiations · Filed 26/02/2026
Net Sales by Segment
Three Months Ended
June 30,
Six Months Ended
June 30,
In millions
2026
2025
2026
2025
Semiconductor Technologies
$
744
$
644
$
1,466
$
1,288
Interconnect Solutions
685
526
1,278
1,000
Total
$
1,429
$
1,170
$
2,744
$
2,288
14
Table of Contents
Net Sales by Segment by Geographic Region
Three Months Ended
June 30,
2026
2025
Semiconductor Technologies
Interim revenue note / quarterly and first-half sales by segment · Filed 04/08/2026
Changes in working capital were primarily driven by higher trade receivables due to increased sales and higher inventory based on business activity, net of increased accounts payable due to increased production and inventory builds to support sales growth.
MD&A / sales, production and inventory effects on working capital · Filed 04/08/2026
Mr. Rizvi will also receive a $10.0 million equity buyout award designed to replace the value and timing of forfeited equity awards.
August CFO appointment disclosure / prospective equity buyout award · Filed 21/08/2026
The buyout award is composed of 60% restricted stock units and 40% performance stock units, with a front-loaded vesting schedule intended to mirror the compensation opportunity being relinquished while promoting retention and alignment with shareholder value creation.
August CFO appointment disclosure / buyout award composition and vesting design · Filed 21/08/2026
Consistent with the terms of his forfeited equity awards, in the event of an involuntary termination without cause the restricted stock units will accelerate vesting and the performance stock units will remain outstanding and eligible for vesting based on the performance metrics.
August CFO appointment disclosure / termination treatment of buyout awards · Filed 21/08/2026
1.Our stockholders elected three Class I directors to each serve a two-year term until our 2028 annual meeting of stockholders or until his or her successor has been elected and qualified, based on the following voting results:
Nominee
Votes For
Votes Against
Abstentions
Broker Non-Votes
Karin De Bondt
141,126,582
1,673,354
216,705
27,628,432
Byron Green
140,877,496
1,906,626
232,519
27,628,432
Jon Kemp
142,101,132
677,805
237,704
27,628,432
2.Our stockholders approved, in an advisory vote, the compensation of our named executive officers, based on the following voting results:
Votes For
Votes Against
Abstentions
Broker Non-Votes
136,385,611
6,156,323
474,707
27,628,432
3.Our stockholders approved, in an advisory vote, the frequency of future advisory votes on named executive officers compensation as every 1 year, based on the following voting results:
1 Year
2 Years
3 Years
Abstentions
Broker Non-Votes
140,248,870
289,836
2,111,361
366,574
27,628,432
Based on the results above, and consistent with the prior recommendation of the Qnity Board of Directors in favor of an annual advisory vote on the compensation of our named executive officers, the Board has determined that future advisory votes on named executive officers compensation will be submitted to stockholders on an annual basis until the next required vote on the frequency of such votes.
Annual-meeting results / director elections, compensation advisory vote and annual voting frequency · Filed 22/05/2026
