Executive Summary / Key Takeaways

• Chemours is actively executing its "Pathway to Thrive" strategy, focusing on operational excellence, targeted growth in high-value markets, portfolio optimization, and resolving legacy liabilities to enhance long-term shareholder value.
• The Thermal Specialized Solutions (TSS) segment is a significant growth driver, with Opteon™ refrigerants achieving record sales and double-digit growth, propelled by global regulatory transitions to low global warming potential (GWP) solutions.
• Strategic investments in emerging technologies like 2-phase liquid cooling for data centers and critical minerals are positioning Chemours for future growth, with the liquid cooling fluid market projected to reach a $1.5 billion Total Addressable Market (TAM) by 2030.
• Significant progress has been made in addressing legacy PFAS liabilities, including a comprehensive New Jersey settlement, which, combined with insurance proceeds and escrow funds, covers Chemours' obligations through at least 2030.
• Despite macroeconomic headwinds in the Titanium Technologies (TT) segment and past operational disruptions, the company is committed to substantial cost reductions and aims for overall sales and earnings growth in 2026, supported by improved operational reliability and strategic initiatives.

A Chemical Powerhouse in Transition: Setting the Scene

The Chemours Company, established in 2014 and spun off from EIDP, Inc. in 2015, stands as a global leader in performance chemicals. Its portfolio spans essential products like refrigerants, titanium dioxide (TiO2) pigment, and high-end polymers, serving diverse industries from automotive and electronics to coatings and energy. From its inception, Chemours inherited a complex landscape, including a significant docket of legacy legal and environmental liabilities, particularly related to per- and polyfluoroalkyl substances (PFAS). This historical context has profoundly shaped its current strategic imperatives.

Chemours' overarching strategy, "Pathway to Thrive," is a multi-faceted transformation designed to capitalize on its foundational strengths and competitive differentiators. This strategy is built upon four pillars: operational excellence, enabling growth, portfolio management, and strengthening the long-term. These pillars are not merely aspirational but are actively being implemented to drive efficiency, foster innovation, optimize its business mix, and prudently address its historical obligations, all while aiming to deliver enhanced shareholder value.

Technological Edge and Innovation Driving Future Growth

At the heart of Chemours' competitive advantage lies its differentiated technology, which underpins its product offerings across all segments. In its Thermal Specialized Solutions (TSS) segment, the Opteon™ refrigerants portfolio exemplifies this. These products offer low global warming potential (GWP) and near-zero ozone-depletion, directly addressing stringent global regulations such as the U.S. AIM Act and EU F-Gas regulations. The tangible benefit is a superior environmental profile without compromising performance in critical applications like refrigeration and air conditioning. Chemours is on track to achieve an estimated goal of 350 million tons of avoided carbon dioxide equivalent emissions from its low GWP products by the end of 2025.

Beyond refrigerants, Chemours is actively innovating in high-growth, high-value markets. The company has expanded into the burgeoning liquid cooling market for data centers, a critical need driven by the demands of artificial intelligence (AI) and next-generation chips. Through a strategic manufacturing agreement with Navin Fluorine (NAVINFLUOR), Chemours is producing Opteon™ 2-phase emergent cooling fluids and has introduced 2-phase direct-to-chip fluids as a bridging technology. This participation requires no new capital investments for the direct-to-chip offering, leveraging existing product portfolios and R&D expertise. The market for liquid cooling fluids alone is projected to reach a $1.5 billion TAM by 2030 and $3 billion by 2035, positioning Chemours as a key participant as 2-phase immersion cooling becomes essential for optimizing chip performance in advanced computing.

In its Advanced Performance Materials (APM) segment, Chemours' fluoropolymers are crucial for delivering high performance in harsh operating conditions, enhancing safety, and improving fuel economy in transportation. These materials are also vital for enabling electric vehicle (EV) electrification by improving battery performance and supporting clean hydrogen generation through water electrolyzers and fuel cell vehicles. The successful ramp-up of a newly constructed high-purity Teflon™ PFA resin production line further solidifies its presence in the semiconductor industry. Additionally, the Titanium Technologies (TT) business is developing its Ti-Pure™ Sustainability (TS) product series, designed to help customers achieve their sustainability goals through enhanced climate impact and resource efficiency.

Chemours is also strategically leveraging its expertise in critical minerals. Its TT business generates approximately $90 million in annual mineral sales, with about half comprising high-value monazite and precision investment casting zircon. Monazite, processed domestically, contains heavy rare earth elements essential for permanent magnets in EVs and defense applications, differentiating Chemours' domestic supply. The company has secured $10 million in grant funding for 2025 and 2026 to advance innovative separation assets, aiming to develop future critical mineral opportunities in the United States.

Financial Performance and Liquidity: A Story of Resilience and Strategic Adjustment

Chemours' recent financial performance reflects a mixed but strategically focused picture, demonstrating resilience amidst challenging market conditions and significant legacy obligations. For the three months ended September 30, 2025, net sales were $1.495 billion, a slight 1% decrease year-over-year, primarily due to a 3% volume decline in the TT and APM segments, partially offset by a 1% price increase and favorable currency movements. Over the nine-month period ending September 30, 2025, net sales increased by 1% to $4.478 billion, driven by a 2% volume increase in TSS and TT, despite a 1% price decrease in TT.

Profitability metrics show the impact of both market dynamics and strategic actions. Net income attributable to Chemours for Q3 2025 was $60 million, a notable increase from $32 million in Q3 2024, translating to diluted earnings per share of $0.40. For the nine months ended September 30, 2025, net income was $324 million, significantly higher than $81 million in the prior year period, with diluted EPS of $2.16. This improvement was partly driven by a $9 million benefit from income taxes in Q3 2025, resulting from a partial release of valuation allowance against deferred tax federal and state interest carryforwards, and a $70 million tax benefit related to environmental and litigation reserves over the nine-month period.

Segment-specific performance highlights the strategic shifts. TSS delivered robust results in Q3 2025, with net sales increasing 20% to $560 million and Adjusted EBITDA surging 40% to $194 million, achieving an impressive 34.6% Adjusted EBITDA margin. This was primarily fueled by stronger Opteon™ Refrigerant aftermarket demand and increased volumes from the U.S. AIM Act transition. In contrast, TT faced headwinds, with Q3 2025 net sales decreasing 9% to $612 million and Adjusted EBITDA falling 68% to $25 million, resulting in a 4.1% margin. This decline was attributed to sustained macroeconomic weakness and operational disruptions. APM also saw a 12% net sales decrease to $311 million in Q3 2025, with Adjusted EBITDA down 63% to $14 million, impacted by an outage at the Washington Works site and the exit of the SPS Capstone™ product line.

Chemours' liquidity position is a critical focus. As of September 30, 2025, the company held $613 million in unrestricted cash and cash equivalents, with $426 million held by foreign subsidiaries. Total current liabilities stood at $1.88 billion. The company maintains $953 million in availability under its revolving credit facility, which was recently amended to extend commitments to 2030.

Operating cash flows for the nine months ended September 30, 2025, turned positive at $127 million, a significant improvement from a $771 million usage in the prior year period, largely due to the release of $592 million in restricted cash from the U.S. public water system settlement fund. Capital expenditures for the nine-month period were $168 million.

The company's net leverage ratio on a trailing 12-month basis was 5x Adjusted EBITDA as of September 30, 2025. Management is committed to improving this, aiming for below 3x at mid-cycle. A key move to bolster financial flexibility was the 65% reduction in the quarterly dividend to $0.0875 per share in Q1 2025, a decision aimed at balancing capital return with the need for balance sheet flexibility to fund strategic growth and address liabilities.

Competitive Landscape and Strategic Positioning

Chemours operates within a dynamic and highly competitive global chemical industry, facing both large diversified players and specialized niche competitors. Key direct competitors include DuPont , Dow , Eastman Chemical , and Tronox (TROX). Chemours' competitive strategy under "Pathway to Thrive" emphasizes leveraging its specialized product performance, innovation speed, and cost leadership in specific areas.

In the Thermal Specialized Solutions (TSS) segment, Chemours' Opteon™ portfolio provides a distinct advantage through its low GWP technology, which is increasingly mandated by regulations. This allows Chemours to differentiate itself from competitors, including those offering older HFC products or alternative R32, by providing superior environmental performance and regulatory compliance. While larger competitors like DuPont may have broader portfolios, Chemours' focused expertise in next-generation refrigerants enables faster innovation cycles and a strong market position in this transitioning space. The company's ability to offset R32 input cost inflation through pricing and its supply chain flexibility (e.g., sourcing in the U.S., blending in Mexico) further strengthens its competitive stance.

The Titanium Technologies (TT) segment faces intense competition, particularly from Chinese producers. Chemours' strategy is to be a lowest-cost manufacturer and gain share in "fair trade markets" (North America, Europe, Brazil, Saudi Arabia) where anti-dumping duties and regulations are in place. These Western markets, representing nearly 70% of global TiO2 sales, offer significant opportunities. While Chinese exports continue, they are declining in fair trade regions, creating space for Chemours' value-based commercial strategy, which emphasizes product quality, reliability, customer service, and sustainability. The company anticipates at least 300 kilotons of Chinese capacity will be permanently shut down, leading to a more balanced supply-demand picture. Chemours' agreement with PCC Group to build a chlor-alkali facility at its DeLisle, Mississippi plant is an asset-light approach designed to bolster its efforts to become one of the world's lowest-cost TiO2 producers by 2028. This enhances its vertically-integrated chlorine positioning, ensuring U.S. domestic supply.

In Advanced Performance Materials (APM), Chemours focuses on shifting its product mix to higher-value applications and optimizing its asset footprint. Its high-end polymers and advanced materials offer unique attributes critical for demanding applications in consumer electronics, semiconductors, and the burgeoning EV and hydrogen markets. This specialization allows Chemours to compete effectively against more diversified players like Dow and Eastman Chemical (EMN), who may have broader material science portfolios but potentially less focused expertise in these niche, high-performance areas. The strategic exit from the SPS Capstone™ business and the review of its European asset footprint are part of this optimization, aiming to improve the quality of earnings and allocate capital to more profitable ventures. The partnership with SRF Limited (SRF) in India further enhances its global supply chain flexibility for fluoropolymers and fluoroelastomers without upfront capital investment.

Chemours' competitive disadvantages include its relatively smaller scale compared to chemical giants like DuPont (DD) and Dow (DOW), which can sometimes translate to less financial resilience or broader market diversification. However, its focused "Pathway to Thrive" strategy aims to mitigate these by concentrating resources on high-return areas and strengthening its balance sheet. The company's 15% backward integration into ore for TT is a strength, but its strategy to innovate for processing cheaper ore rather than further backward integration highlights a pragmatic approach to cost leadership.

Outlook and Guidance: A Path to Growth and De-risking

Chemours' outlook for the remainder of 2025 and into 2026 reflects a cautious yet optimistic view, underpinned by its strategic transformation. For the full year 2025, the company projects sales between $5.7 billion and $5.8 billion, with adjusted EBITDA in the range of $745 million to $770 million. Capital expenditures are anticipated to be around $220 million, and free cash flow conversion for the fourth quarter is expected to be between 50% and 70%.

Looking ahead to 2026, Chemours anticipates overall sales and earnings growth, coupled with improved cash flow performance. This growth is expected to be supported by continued progress on its cost-out efforts, targeting over $250 million in run rate savings across the company by 2027, with half of these expected by the end of 2025. The TSS segment is projected to continue its double-digit Opteon™ growth into early 2026, driven by the ongoing OEM transition to R-454B in the U.S. Product development costs for next-generation refrigerants and liquid cooling solutions are expected to normalize to around $20 million in 2026, down from approximately $40 million in 2025, contributing to improved earnings.

In the TT segment, some restocking efforts are anticipated in Q1 2026, which should lead to improved earnings, though muted market conditions are expected to persist in the near term. APM's fourth-quarter 2025 Adjusted EBITDA is projected to normalize to $30 million to $40 million, reflecting a return to stable operations at Washington Works and ongoing cost reductions, a trend expected to continue into future quarters. The expiry of two high-grade ore feedstock contracts in early 2026 and early 2027 is expected to yield a net cash flow benefit of $100 million to $150 million, further bolstering financial flexibility.

Risks and Challenges

Despite the positive strategic trajectory, Chemours faces several pertinent risks and challenges. The inherent uncertainties of legal and regulatory processes, particularly concerning PFAS liabilities, remain a significant concern. While the comprehensive New Jersey settlement is a major de-risking event, the possibility of future losses exceeding accrued amounts or for currently unestimable matters remains. The ongoing U.S. federal government shutdown could also delay regulatory approvals, environmental remediation, and impact cash flows from government contracts.

Macroeconomic weakness, especially in the global TiO2 market and cyclical end markets served by APM, continues to pose a challenge, potentially impacting demand and pricing. Operational disruptions, such as the past outages at Altamira and Washington Works, highlight the need for continued focus on operational excellence to ensure reliability and minimize cost impacts. Furthermore, changes in U.S. and foreign trade policies, including tariffs, introduce uncertainty, though Chemours has implemented mitigation strategies. The company's ability to refinance its debt on favorable terms and manage its net leverage ratio will also be critical for maintaining financial flexibility.

Conclusion

The Chemours Company is undergoing a profound transformation, actively reshaping its portfolio and operational footprint to capitalize on high-growth opportunities while systematically addressing its legacy challenges. The "Pathway to Thrive" strategy, with its clear focus on operational excellence, targeted growth in innovative segments like low GWP refrigerants and liquid cooling, and disciplined portfolio management, is central to its investment thesis. The significant progress in resolving PFAS liabilities, particularly the New Jersey settlement, materially de-risks the company and strengthens its long-term financial foundation.

While macroeconomic headwinds and competitive pressures in certain segments persist, Chemours' technological differentiation, strategic partnerships, and commitment to cost reduction position it for improved performance. The anticipated sales and earnings growth in 2026, driven by the Opteon™ franchise and the realization of cost savings, underscores the potential for enhanced shareholder value. Investors should closely monitor the execution of its strategic initiatives, the continued resolution of legacy liabilities, and its ability to leverage technological leadership in evolving markets to sustain its growth trajectory.