Element Solutions Inc (NYSE:ESI) Q3 2025 Earnings Call Transcript

Element Solutions Inc (NYSE:ESI) Q3 2025 Earnings Call Transcript October 29, 2025

Operator: Good morning, ladies and gentlemen, and welcome to Element Solutions Third Quarter 2025 Financial Results Conference Call. I will now turn the call over to Varun Gokarn, Vice President of Strategy and Integration.

Varun Gokarn: Good morning, and thank you for participating in our third quarter 2025 results conference call. Joining me today are CFO, Carey Dorman. In accordance with Regulation G, web conference call. A replay will be available in the Investors section of company’s website. During today’s call, we will make forward-looking statements that current views of the company’s pro forma financial results. These statements are based on assumptions and expectations of future events, which are subject to risks and uncertainties. Please refer to the earnings release, supplemental most recent on our website for a discussion of the material risk factors that could cause our actual results to differ from our expectations and predictions.

Today’s materials also include financial information that has not been prepared in accordance with U.S. GAAP. Please refer to the earnings release and supplemental slides for definitions and reconciliations of these non-GAAP measures to comparable GAAP financial measures. It is now my pleasure to introduce our CEO, Ben Gliklich.

Benjamin Gliklich: Thank you, Varun, and good morning, everybody. Thank you for joining. This is an exciting morning for us. When we launched ESI, we talked about a value creation model, marrying operational excellence and prudent capital allocation. Today is a solid proof point showcasing our ability to do both. In addition to reporting record results yesterday, we’re also announcing the acquisition of Micromax, a highly accretive strategic transaction and a value-enhancing addition to our electronics portfolio. Before we get into that, though, I want to give proper view to our operating results. This was an outstanding quarter. We set multiple records. Despite selling our graphics business, this was our highest quarterly adjusted EBITDA since the inception of Element Solutions.

Our Electronics segment posted its sixth consecutive quarter of high single-digit organic growth and achieved a record level of revenue. Excluding the impact of graphics, adjusted EBITDA growth would have been 10% despite some of our legacy end markets remaining below prior peak volume levels, a weaker EV outlook and a soft macroeconomic backdrop in Western industrial markets. Our teams are executing well on their strategies. In our industrial segment, portfolio optimization, productivity initiatives and high-margin wins in both verticals drove strong profit growth despite a flat top line. The segment saw meaningful margin improvement. And excluding the impact of our graphics divestiture, adjusted EBITDA growth would have been almost 30%. On the electronics side, we’ve built a unified platform of technologies to solve emerging customer pain points just as burgeoning investment in data centers and their associated infrastructure accelerates demand for innovative material solutions.

Our portfolio is uniquely positioned to provide those solutions from metallization chemistries for high layer count printed circuit boards to specialized thermal management materials used in assembly to advanced packaging chip scale chemistries. Micromax will add to those solutions, its portfolio in electronics inks and paste with a specialization in the highest performance, most technically challenging applications such as aerospace, defense and health care is a great fit for Element Solutions. The acquisition broadens our offerings to our supply chain and enhances our value proposition to OEMs and specifiers. In 2019, our electronics business was just over $1 billion. And with this transaction, it will exceed $2 billion. Like our business, Micromax is a leader in niche electronics markets reliant on innovation that is co-developed with customers and requires high levels of applications expertise.

Its products are known for durability and performance in harsh environments and provide mission-critical solutions in highly specialized end markets. Micromax sits at the intersection of our assembly and circuitry businesses. Its metals-based manufacturing resembles assembly solutions, but its products are used more in circuit pathway applications like our Circuitry Solutions business. These products also fit our core competencies in formulation and our high-touch low capital intensity operating model. The business has a proven team of experienced, highly technical leaders who add depth and expertise to our electronics business, McDermott Alpha Electronics Solutions. The transaction meets our robust acquisition criteria and is consistent with our strategy of disciplined investment in markets we understand and in growth businesses that we believe are better under our ownership.

We expect the Micromax transaction to be more than 5% accretive to adjusted earnings per share. And based on its projected 2025 results, contribute approximately $40 million of adjusted EBITDA on a full year basis at accretive metals adjusted EBITDA margins. Subject to regulatory approvals and customary closing conditions, we expect to close in the first quarter of 2026, and we’re looking forward to welcoming the Micromax team into the Element Solutions family and to capitalizing on the unique value opportunities associated with this combination. Shortly, you’ll hear more from Carey on our results. But to me, the most exciting thing about the quarter is what it means for our future. We’ve been able to generate great organic outcomes while ramping up investment in future internal and inorganic opportunities.

While growing nicely in 2025, we’re simultaneously building levers to accelerate that growth going forward. Those include several new product introductions in high-value categories in 2026, the accretive, highly strategic acquisition of Micromax underway and substantial remaining balance sheet capacity to put to work should the right opportunities present themselves. The outlook is quite positive. Carey?

Carey Dorman: Thanks, Ben. Good morning, everyone. On Slide 4, you can see a summary of our third quarter financial results. Organic sales grew 5%, and adjusted EBITDA would have increased 10% when adjusting the graphics business out of both the 2024 and 2025 periods to account for that divestiture. Adjusted EBITDA was a record $147 million and exceeded our initial guidance for the quarter of $140 million to $145 million. Electronics organic growth of 7% was driven by solid performance in semi and assembly and exceptional volume growth in Circuitry Solutions. Through economic and industry investment cycles, we benefit from diversification within the electronics supply chain. This quarter, our circuitry business was a primary beneficiary of AI-related investment as our market-leading pulse plating products are used to support fabrication of high layer count server boards.

This demand, along with the sequential ramp in smartphones, allowed us to deliver high single-digit organic growth for the segment even as customer-related volume weakness weighed on power electronics growth in our semiconductor business. The addition of Micromax should further enhance end market diversification and increased opportunities to deliver on customer-led growth across the broader manufacturing landscape. Our core industrial surface treatment business has demonstrated stable or growing adjusted EBITDA for several quarters, even as volume has been under pressure. This quarter, underlying volumes improved as a result of strong growth in Asia and new business wins ramping in the Americas. At the same time, margins benefited from improved fixed cost absorption, portfolio optimization and ancillary business lines and favorable product mix.

ESI’s adjusted EBITDA margin improved roughly 20 basis points year-over-year in constant currency terms and was negatively impacted by higher pass-through metal prices. Excluding the impact of roughly $125 million of pass-through metal sales in Assembly Solutions, our adjusted EBITDA margin would have been 28%, a 100 basis point improvement year-over-year. Foreign exchange provided modest favorability of about $3 million in the quarter, and at current rates should provide a similar level of year-on-year benefit in the coming quarter as well. On Slide 5, we share additional detail on the drivers of organic net sales growth. Starting with electronics. In assembly, the third quarter saw an increase in China volumes associated with smartphone activity as well as continued growth from customers serving the high-performance computing and telecom infrastructure markets.

Advanced solder paste volumes for various computing applications continue to grow as well. Circuitry Solutions sales grew 13% organically. This was driven by continued demand for data center applications, a seasonal ramp in mobile phone activity, and circuit board demand in the Asian EV market. Data center growth is also increasing demand for data storage, which drove sequential acceleration in our memory disk business that should continue through year-end. Semiconductor Solutions organic net sales grew 5% as continued double-digit growth in wafer-level plating was offset by lower power electronics sales from a softer EV market. Copper plating products for foundry and Tier 1 OSAT customers continue to see sustained demand. We also saw a rise in products with high precious metals content such as gold and palladium in our semi business, which drove a negative mix impact to margins overall.

While we saw a year-on-year decline in power electronics from EV demand dynamics, we continue to win business with new customers, and the outlook for this business remains compelling. Industrial and Specialty organic net sales were flat year-over-year. Underlying chemistry volumes for the Industrial Solutions vertical were up mid-single digits as we saw strength in Asia, modest improvement in Europe, and a roughly flat end market in the Americas, which grew due to the contribution of new account wins. Reported revenue growth in this business was impacted by a large customer equipment deal in the third quarter of last year, which is tied to a high-value multiyear chemistry contract. Excluding this impact, organic sales would have been up 4% year-over-year.

And finally, the offshore business continues to grow nicely on the back of market strength pricing and competitive with. Slide 6 covers cash flow and the balance sheet. We generated $84 million of adjusted free cash flow in Q3. This included a $22 million investment in working capital, primarily driven by accounts receivable on the back of sequential revenue growth and slightly higher inventory values driven by metal inflation. Our days of inventory continued to improve, reflecting progress we have made to drive efficiencies in inventory management after several years of supply chain disruption. CapEx in the quarter was $17 million, primarily going towards compelling growth investments such as our first manufacturing site for Kuprion. We expect to invest roughly $65 million on a full year basis, in line with our prior forecast.

Now turning to the balance sheet. Our net leverage ratio at the end of the quarter was 1.9x, and our capital structure remains fully fixed at an effective interest rate of roughly 4%. We expect to fund the Micromax transaction with a combination of cash on hand and modest incremental debt. Assuming no further capital deployment this year, pro forma net leverage at year-end would be roughly 2.5x. This is comfortably below our 3.5x long-term target ceiling and leaves us with plenty of further financial flexibility to continue deploying capital should the right opportunities appear. And with that, I will turn the call back to Ben.

Benjamin Gliklich: Thank you, Carey. As you’ve heard, our strategy and execution are driving record results at Element Solutions, and we’re nicely ahead of our plan for the year despite real end market volatility over the course of the year. We now expect full year 2025 adjusted EBITDA to be between $545 million and $550 million, at the high end of the guidance range we provided last quarter. This translates to fourth quarter adjusted EBITDA of roughly $135 million to $140 million. This quarterly expectation incorporates lower EV volume, the end of the seasonal smartphone ramp and targeted incremental OpEx investment in support of high-growth initiatives like Kuprion. We expect leading-edge electronics driven by high-performance computing and data center to remain robust and have assumed stable industrial demand through year-end.

We’re pleased to have found a solid outlet for some of the balance sheet capacity we’ve been building. Micromax meets our high bar for acquisitions. It’s a growing business that matches our asset-light customer intimate people-intensive attributes. It will be a great addition to our portfolio and reinforces our conviction that we can continue to find high-value inorganic opportunities to accelerate per share earnings growth. We have capacity for more, but we’ll continue to be disciplined about quality and fit. I’ll close, as always, by thanking all of our stakeholders for their continued support of Element Solutions. Most importantly, let me express my deep gratitude for our people around the world for their effort and commitment. Our combination of strong positioning, thoughtful strategy and solid execution is entirely a product of our team and our exceptional people continue to deliver for us.

With that, operator, please open the line for questions.

Q&A Session

Operator: [Operator Instructions] Our first question comes from Bhavesh Lodaya from BMO Capital Markets.

Bhavesh Lodaya: Congrats on multiple fronts. On Micromax, could you share some thoughts on how you expect this platform to perform under the ESI umbrella just compared to your prior ownership, maybe opportunities with your existing customers? And how should we expect the growth and synergies starting from that $40 million EBITDA mark?

Benjamin Gliklich: Yes. Thanks for the question, Bhavesh. We’re really excited by the opportunity to bring Micromax into the ESI family of businesses and make it a part of our Electronics segment, McDermott Alpha Electronics Solutions. This is a business with a market growth algorithm in the mid-single digits. And just like with all of our other electronics businesses, we think we can outperform the market. The benefit of having this business inside of Element as opposed to where it’s been most recently, is the depth of our connectivity in the supply chain, in particular, in the circuit board supply chain. This is a product category that really fits right in between our assembly and circuitry capabilities. There’s a modest amount of customer overlap and there’s a great deal of OEM and specifier overlap, and our relationships can help accelerate that growth.

From a cost synergy perspective, we would expect those to be modest because we’re going to run it from a functional perspective and a supply chain perspective separately. But we do believe we can accelerate the growth here and the value proposition to our supply chains, which should translate into value creation from a margin perspective and profit perspective for the company.

Bhavesh Lodaya: And then maybe stepping to Kuprion, can you give us an update around the commercialization activities there? Are we on track for — I believe the start-up was planned for this quarter. And any initial thoughts around earnings or EBITDA contribution next year from that?

Benjamin Gliklich: Yes. So Kuprion, there are 2 major thrusts, I would say, commercialization and supply chain. Our mid-scale site, where we ramped up investment meaningfully in the third quarter is on track to be operational at the end of the year, which will provide more product to both qualify and sell. And so we should have some meaningful sales and profits into next year. Commercialization is really qualifying this product with our customers and the specifiers. And that also continues at pace. I would say that there’s a handful of very compelling commercial opportunities that are working their way through the different layers of approval required to sell something into this high-value, high-performance supply chain. And so we should be getting some qualification milestones here in the fourth quarter.

Operator: Our next question comes from Josh Spector from UBS.

Joshua Spector: Congrats on the Micromax deal. I just wanted to ask on that one first. Just I don’t know if you could provide any more color around the growth of that business from a top and bottom line perspective over the last couple of years, I guess, would that have been accretive to ESI’s growth over that time? And then also, as you think about the stability of that growth. Does it provide — I mean, basically, does it improve the stability of overall ESI growth in your view? Or is it slightly more volatile? Just any characterization there would be helpful.

Benjamin Gliklich: Yes. So the way to think about top line here is ex metals. So of the roughly $300 million of revenue here, about 2/3 of that is metal value. And so there’s been quite a bit of metal volatility, and that’s been impacting the, we’ll call it, SEC or GAAP revenue here, but the profits have been very stable. I would say that there was a pretty significant drawdown in the electronic ecosystem in 2022 and into 2023. This business fared better than our electronics business did through that period. It’s a very sticky product portfolio. And so it didn’t have the same drawdown. And they have a price lever as well that has been flex reasonably well, and we see opportunity associated with. On the way back from that drawdown, I would say the growth has been roughly in line with our assembly business, maybe a little bit faster over the past couple of years.

So this business enhances stability for sure, certainly, ex metal and on the profit line. And we see an opportunity to accelerate growth going forward. There’s — the products that this company sells are really specialized for the most demanding applications. So they’ve got a concentration in aerospace and defense, low earth orbit satellites health care applications, and we’re just starting to see the pull into the data center complex. So that as a market vector and also as a virtue of — as a product of being inside of Element and our access to that market should lead to an acceleration in earnings growth here.

Joshua Spector: That’s helpful. And just as a quick follow-up. I mean, you made comments in the release about still having capital flexibility. So I mean I think your 2.5x is pro forma for the deal closing. I guess, at first blush when that closes without those numbers, that leverage will go higher. So can you just talk about your ability, I guess, over the next 6 to 9 months to deploy cash to the extent that there’s maybe a bigger opportunity in your stock and a drawdown or otherwise, how high would you be willing to bring leverage in that scenario?

Benjamin Gliklich: Yes. So we think about things on a pro forma basis. And so the 2.5 we have is pro forma for the contribution of the expected contribution of Micromax and taking into consideration the full purchase price of Micromax. So 2.5 would be the number at year-end. Given the cash flow characteristics of our business and the growth opportunity we see into 2026, that number will be closer to 2 again by the end of 2026, barring any further capital deployment. We’ve always said that our long-term target ceiling for leverage is about 3.5x. So we see plenty of capacity even in the near term should something interesting become available to deploy incremental capital.

Operator: Our next question comes from Chris Parkinson from Wolfe Research.

Christopher Parkinson: Great. Ben, given Micromax’s history as part of DuPont, what would you say to somebody who perhaps would cortege the business and say, well, why did they get rid of it in the first place? And essentially, what would make — what’s evolved over the last 5 to 10 years? And what ultimately makes Element Solutions the best owner or best home for the platform as it stands today?

Benjamin Gliklich: Yes. Thanks for the question, Chris. Look, we can’t speak to DuPont’s decision-making as we really weren’t a party to it. But if I had to speculate, I’d probably say 2 things. The first is the SEC or the GAAP margins of this business on the face of them are lower than some of our other businesses and some of DuPont’s other businesses. And DuPont doesn’t have other metals-related businesses where they would make an ex metals adjustment like we do. right? To that point, on an ex metals basis, the margins of this business are in excess of 40%, which really speaks to how highly valued these materials are to their supply chain. This is a business that is highly specified by its customer base with substantial switching costs, very long qualification cycles.

It’s a very sticky business. It’s a very high-value business even if the margins on the face of them, again, on a GAAP basis, appear lower. The other reason may be that when DuPont chose to divest this business, this — the recent surge in innovation in the printed circuit board market, which has been away from the chip, right? Innovation in the integrated circuit has moved back into packaging and onto the circuit board that hadn’t really started at that point. And so as we sit here today, there’s a huge amount of innovation and technology moving back from the chip to the circuit board, and these materials are an important part of that. Finally, I think it’s worth noting that in the, whatever, 12, 16 hours since we announced this transaction, I’ve had many messages from DuPont and ex-DuPont people congratulating us on the acquisition and lamenting frankly, that they no longer own it.

So this is a really good business as a market leader in a high-value market with strong technology, solid growth outlook, great cash flows. And we’ve got several avenues to make it better as part of Element Solutions, it fits within this really cogent portfolio of technologies that we have to support high-value electronics.

Christopher Parkinson: That’s great color. And just as a quick follow-up, Ben, as we start thinking about on a preliminary basis about ’26, how should we think about the semiconductor growth side of it and the comments in the PowerPoint about softer power electronics, was that a singular customer that caused an issue? I mean, how should we think about the momentum into year-end and ultimately over the next 12 to 18 months?

Benjamin Gliklich: Yes, absolutely. So within the semi business, there’s really 2 prongs, their semi assembly and our wafer-level packaging business. The semi assembly business has a strong capability in power electronics, and we’ve all seen what’s happened in the EV market and certainly, with some of the larger participants in that market, and that’s what weighed on the Semi business in the third quarter. The wafer-level packaging business continued to grow in the teens and has a pretty compelling growth runway ahead from here. And in the power electronics business, even with a weaker EV market, we see substantial customer wins as we gain share with our material over competitive, more legacy technology materials for power semis and power modules. And so there’s a growth vector there as well. The semi business will continue to grow certainly above market and healthily as we get into 2026.

Operator: Our next question comes from Frank Mitsch from Fermium Research.

Frank Mitsch: Congrats on Micromax. I’m assuming that given the quick time to complete the deal, looking at the first quarter of ’26 that you’re not anticipating any antitrust issues in terms of government approvals?

Benjamin Gliklich: Yes. So as we’ve said, this is a complementary capability. While there’s some customer overlap, there really isn’t a technology or market share overlap. And so we don’t anticipate substantial regulatory hurdles going forward.

Frank Mitsch: And nice job on the third quarter upside. What most positively surprised you relative to the guidance? And how is that trending so far here in the fourth quarter?

Benjamin Gliklich: Yes. So the Industrial Solutions business had a really strong third quarter even if you don’t necessarily see it in the organic sales. But we were lapping a period where we sold a big piece of equipment in Q3 of 2024. And so when you adjust that out, which was a low-margin sale, when you adjust that out, we actually had volume growth and organic growth in that business which was mix favorable and positive. I think entering the third quarter, our expectations for Industrial were probably weaker than what we ultimately delivered. So if I had to call out one surprise, it would be that. And as we sit here in the fourth quarter, right, we’re almost through October, the momentum in the electronics side of the business has been a positive surprise thus far. And so we’re seeing real strong continued momentum in electronics. And that’s a positive indicator as we move into 2026.

Operator: Our next question comes from Aleksey Yefremov from KeyBanc Capital Markets.

Aleksey Yefremov: Ben, I realize you already talked a lot about Micromax, but I was hoping to give you an opportunity to talk about growth synergies here, either on the commercial side or technology or anything else?

Benjamin Gliklich: Yes. No, I appreciate it. Look, our — 70% of our business and correspondingly 70% of our people wake up every day thinking about the electronic supply chain and how they can add value to their customers and the specifiers, right? And so now we’ve got a new capability that’s highly strategic. It’s a market leader in a high-value market that we can add to the quiver of capabilities that we bring to bear to those suppliers. We’re doing tech days with the largest OEMs with the largest participants in the supply chain, bringing all of our capabilities to bear. And Micromax will be one of those capabilities. That’s not something that they had in their prior ownership. And so I believe that we will drive greater commercial traction through that.

At the same time, the technologies they have are becoming increasingly important as the demands that are being placed on the printed circuit board versus the semiconductor versus the chip are changing and growing. And so that is a market growth vector that will support this technology leader and we’ll be able to get them into the right rooms and provide them with greater access than they would have had previously. And so this is — that allows for — that should allow for this business to grow faster than its market has already got a solid growth outlook.

Aleksey Yefremov: Thanks, Ben. And then hopefully, I was hoping to look a little bit into ’26. On your electronics side, how do you feel about just volumes in general, given there’s been some destocking that occurred this year across sort of several key products. Do you see generally volume growth accelerating next year about the same or slower?

Benjamin Gliklich: Yes. So we think about units and we have conviction that the growth we’re seeing in high-end electronics will continue into 2026. And the growth that we’ve delivered in high-end electronics year-to-date has been really strong. And, I would say, clearly above market, so we should continue to deliver that. The outlook for automotive units, in particular, EVs is really hard — is hard to predict at this point, we’d simply be speculating. But we’ve got, especially on the Power Electronics side, plenty of market share to go after that should allow for us to outgrow that market. And so the question mark as we entered the third quarter was smartphones. We’re seeing a healthy smartphone environment as we sit here today, probably better than we would have expected.

We’ll see what the pull-through on that is into 2026. It’s hard to call that right now. All told, next year has promised to be another solid year of organic growth, and we’ve just added a strong impact from inorganic opportunities. So we’re very optimistic about 2026 and beyond.

Operator: Our next question comes from Pete Osterland from Truist.

Peter Osterland: First, just following up on Micromax. Do you view these assets as historically underinvested in? I mean do you see the need for any elevated capital spending initially in order for the business to reach the full potential you’re looking for? And could you share what you’re expecting in terms of onetime costs to stand up and integrate the business?

Benjamin Gliklich: Sure, Pete. So this business is just like our businesses. It’s a people-intensive technical applications-oriented employee base, customer-facing type of business and correspondingly, it’s asset-light formulation. And so I would think this is about a 2% of sales capital business just like ours, and it’s got the capacity it needs to support substantial incremental growth. So we don’t see this driving an uptick in CapEx across Element and nor requiring significant investment in physical assets. There is a stand-alone cost dynamic, which is burdened, which is in the approximately $40 million that we’ve communicated as the full year contribution for this business of a few million dollars. We’ll see synergies could come from that over a 12- to 18-month period, driving the earnings here higher.

Peter Osterland: Very helpful. And then switching gears. On the IMS business, the margin performance in the third quarter was very strong despite kind of continued challenges in the overall industrial operating environment. So my question is, where can margins go in this business? I mean in a more normalized demand environment, is there room to move margins meaningfully higher from the almost 24% that you put up in the third quarter?

Benjamin Gliklich: Yes is the short answer, Pete. The industrial business, while it had modest volume growth is still very far dislocated from its prior peak volumes. And so the productivity and procurement we’re driving to drive those margins higher will contribute, I would say, a very strong incremental as and when volume growth recovers, we get better absorption through our sites. The offshore business also continues to be strong, and that’s mix positive. So there’s room for further margin expansion. And I’d note that when you look across the ESI complex, our ex metal margins were 28% in the quarter. That’s only 100 basis points off of our prior peak. And we’re continuing to invest in OpEx in anticipation of and in support of pretty significant margin accretive future growth. So across all of Element, we see material opportunity for incremental margin expansion from here.

Operator: Our next question comes from John Tanwanteng from CJS Securities.

Jonathan Tanwanteng: Congrats on a nice quarter on the Micromax deal. I was wondering if we could drill down to the offshore business a little bit. How sustainable is the strength there? I think you mentioned that there are some good tailwinds, but I’m wondering were there any first fill programs there that might tail off and kind of what the demand outlook is as we go off into next year?

Benjamin Gliklich: Yes. The offshore business is a longer cycle business. And so what drives that is a solid, stable energy price which drives drilling activity, which subsequently translates into new producing wells and we get a large sale when you see a fill. And so when a drill is completed and then ongoing more annuity recurring like monthly orders for each well on which our fluids are being used. Drilling rates are pretty good right now. I think that there is an expected lull to some extent in drilling activity into 2026. I wouldn’t count on — you wouldn’t have expected in a 70% electronics business, we’re the fastest-growing vertical to be offshore drilling. But — and I wouldn’t expect that to continue into 2026. But it’s a healthy market. It’s a healthy business. We’ve got a pricing lever there as well that’s pretty compelling. And so we see sustained growth into 2026. We’re probably not at these rates.

Jonathan Tanwanteng: Got it. And then maybe a similar question, but focused on just the margins in the electronics side and the EV specifically. Do you expect that headwind from, I guess, the larger customer there to continue for the foreseeable future? Or is that something you expect to reverse out at some point? And kind of how do you think about that market overall?

Benjamin Gliklich: Look, I think it’s safe to say EV volumes are likely to be down again year-over-year in Q4 globally. I think that the worst of it is passed and I see opportunity for, again, this power electronics business to continue to grow. We see a compelling growth opportunity in power electronics going forward into 2026. And it’s not just actually for EV applications. We’re starting to see pull for these materials, these high thermal materials into other applications, network infrastructure and data center applications as well. We see a very strong pipeline for Argomax into 2026 and beyond.

Operator: Our next question comes from John Roberts from Mizuho.

John Ezekiel Roberts: MKS has decided to exit the Atotech industrial metal plating business as the main competitor, was part of your volume pickup share gain opportunities as they go through that process?

Benjamin Gliklich: Really can’t speak to that, John. I would say that our industrial business has been growing really nicely, executing very well. And we’ve outgrown our market for sure. So there has been some share gain, but I don’t think it’s appropriate to speak about any specific competitors we’ve got great capability there and a really good value proposition of the supply chain, and the team has been executing really, really well.

John Ezekiel Roberts: Okay. And then maybe I missed this, but you described Micromax as fitting between assembly and circuitry. Will it be reported in either of those 2 subsegments? Or will it be reported standalone?

Benjamin Gliklich: I don’t expect it to be reported in either of the segments. I think it will be standalone. And I would note that we will report this business ex metals to give a better picture on organic volume and appropriate margin.

Operator: That concludes the question-and-answer session. I would like to turn the call over back to Ben Gliklich for further remarks.

Benjamin Gliklich: All right. Great. Thank you very much. Thanks to everybody again for joining, and we’re looking forward to seeing many of you in the days and weeks to come on the road. Have a great day.

Operator: This concludes today’s conference call. Thank you for joining. You may now disconnect.