Ecovyst Inc. (ECVT)

ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Unless the context requires otherwise, references in this report to “Ecovyst,” “the Company,” “we,” “us” or “our” refer to Ecovyst Inc. and its consolidated subsidiaries.

Forward-looking Statements

This periodic report on Form 10-Q (“Form 10-Q”) includes “forward-looking statements” that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should” and similar expressions are intended to identify these forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short- and long-term business operations and objectives, and financial needs. Examples of forward-looking statements include, but are not limited to, statements we make regarding demand trends, economic effects on our operations and financial results and our liquidity, potential strategic acquisitions or divestitures, potential increased borrowing under our credit facilities, and our belief that our current level of operations, cash and cash equivalents, cash flow from operations and borrowings under our credit facilities and other lines of credit will provide us adequate cash to fund working capital requirements, capital expenditure projects, debt service requirements and other requirements for our business for at least the next twelve months.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed herein may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Some of the key factors that could cause actual results to differ from our expectations include the following risks related to our business:

•as a multinational business, we are exposed to general business risks and local business risks in different countries;

•we are affected by general economic conditions and economic downturns;

•exchange rate fluctuations could adversely affect our financial condition, results of operations and cash flows;

•our international operations require us to comply with anti-corruption laws, trade and export controls and laws and regulations of the U.S. and Canadian governments as well as the state, provincial and local governments where we operate;

•alternative technology may reduce or eliminate the need for certain of our products;

•our substantial level of indebtedness could adversely affect our financial condition;

•if we are unable to manage the current and future inflationary environment and to pass on increases in raw material prices, including natural gas, or labor costs to our customers or to retain or replace our key suppliers, our results of operations and cash flows may be negatively affected;

•we face substantial competition in the industries in which we operate;

•we are subject to the risk of loss resulting from non-payment or non-performance by our customers;

•we rely on a limited number of customers for a meaningful portion of our business;

•multi-year customer contracts are subject to potential early termination and such contracts may not be renewed at the end of their respective terms;

•our quarterly results of operations are subject to fluctuations because demand for some of our products is seasonal;

•our growth projects may result in significant expenditures before generating revenues, if any, which may materially and adversely affect our ability to implement our business strategy;

•we may be unable to successfully integrate the Calabrian sulfur dioxide and sulfur derivatives business into our business, and we may be unable to realize the benefits of that acquisition;

•we may be liable to damages based on product liability claims brought against us or our customers for costs associated with recalls of our or our customers’ products;

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•we are subject to extensive environmental, health and safety regulations and face various risks associated with potential non-compliance or releases of hazardous materials;

•existing and proposed regulations to address climate change by limiting greenhouse gas emissions may cause us to incur significant additional operating and capital expenses and may impact our business and results of operations;

•other governmental legislation and regulation;

•production and distribution of our products could be disrupted for a variety of reasons, including as a result of supply chain constraints, and such disruptions could expose us to significant losses or liabilities;

•the insurance that we maintain may not fully cover all potential exposures;

•we could be subject to damages based on claims brought against us by our customers or lose customers as a result of the failure of our products to meet certain quality specifications;

•our failure to protect our intellectual property and infringement on the intellectual property rights of third parties;

•disruption, failure or cyber security breaches affecting or targeting computers and infrastructure used by us or our business partners may adversely impact our business and operations;

•significant trade developments, including tariffs, could have an adverse effect on us or our customers; and

•other factors set forth in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report on Form 10-K”).

The forward-looking statements included herein are made only as of the date hereof. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-Q to conform these statements to actual results or to changes in our expectations.

Overview

We are a leading provider of regenerated sulfuric acid, virgin sulfuric acid, and sulfur dioxide and related derivatives, which we believe are essential to our customers’ operations and processes. We believe that our business contributes to improving the sustainability of the environment.

We are a leading provider of regenerated sulfuric acid to the North American refining industry for the production of alkylate, an essential gasoline component for lowering vapor pressure and increasing octane to meet stringent gasoline specifications and fuel efficiency standards. We are also a leading North American producer of high quality and high strength virgin sulfuric acid for industrial and mining applications. We also provide chemical waste handling and treatment services, as well as ex-situ catalyst activation services for the refining and petrochemical industry. As a result of the recent June 30, 2026 acquisition of the Calabrian sulfur dioxide and sulfur derivatives business (“Calabrian”), we expanded our product offering into the sulfur dioxide, sodium bisulfite, sodium thiosulfate and sodium metabisulfite product groups for mining, water treatment, energy and other specialty applications, including food and pharmaceuticals (see Note 8 for more information on this transaction).

On December 31, 2025, we completed the sale of our Advanced Materials & Catalysts business. The results of operations, financial condition, and cash flows for the Advanced Materials & Catalysts are presented herein as discontinued operations. Except where noted, any tables, percentages or metrics included within this filing exclude the results of our Advanced Materials & Catalysts business. Refer to Note 3 to our condensed consolidated financial statements for additional information.

On June 30, 2026 we completed our acquisition of the Calabrian business from INEOS Calabrian Holdings Limited and INEOS Calabrian Canada Holdings Limited for a purchase price of $190.0 million subject to certain adjustments including indebtedness, cash, and working capital, pursuant to the share purchase agreement (the “Calabrian Acquisition”). We paid $183.3 million in cash after certain customary adjustments for indebtedness, working capital and $4.8 million of cash acquired at the closing of the transaction. To fund the transaction, we increased our term loan by $100.0 million and used cash on hand for the remaining amount. The Calabrian Acquisition expanded our existing product offering through further expansion into the sulfur dioxide, sodium bisulfite, sodium thiosulfate and sodium metabisulfite product groups. Refer to Note 8 to our condensed consolidated financial statements for additional information.

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Stock Repurchase Program

On April 27, 2022, our Board of Directors (the “Board”) approved a stock repurchase program that authorized the Company to purchase up to $450.0 million of the Company’s common stock over the four-year period from the date of approval (the “Stock Repurchase Program”). On October 30, 2025, the Board amended the Stock Repurchase Program to remove the limitation that all repurchases must be made within the four-year period from the date of original approval. For the six months ended June 30, 2026, the Company repurchased 3,226,461 shares of its common stock on the open market at an average price of $11.07 per share, for a total cost of $35.7 million excluding brokerage commissions and accrued excise tax. As of June 30, 2026, $146.5 million was available for share repurchases under the program.

For the six months ended June 30, 2025, the Company repurchased 2,926,152 shares of its common stock on the open market at an average price of $7.47 per share, for a total cost of $21.9 million excluding brokerage commissions and accrued excise tax.

For possible future repurchases, the actual timing, number, and nature of shares repurchased will depend on a variety of factors, including stock price, trading volume, and general business and market conditions and may be conducted through negotiated transactions, open market repurchases or other means, including through Rule 10b-18 and 10b5-1 trading plans or accelerated share repurchases.

Key Performance Indicators

Adjusted EBITDA, Adjusted Net Income and Net Debt

Adjusted EBITDA, Adjusted Net Income and Net Debt are financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and that we use to evaluate our operating performance, for business planning purposes and to measure our performance relative to that of our competitors. Adjusted EBITDA, Adjusted Net Income, and Net Debt are presented as key performance indicators as we believe these financial measures will enhance a prospective investor’s understanding of our results of operations and financial condition. EBITDA consists of net income from continuing operations before interest, taxes, d

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ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Overview

We are a leading integrated provider of virgin and regenerated sulfuric acid products and services. We believe that our business contributes to improving the sustainability of the environment.

We are a leading provider of sulfuric acid recycling to the North American refining industry for the production of alkylate, an essential gasoline component for lowering vapor pressure and increasing octane to meet stringent gasoline specifications and fuel efficiency standards. We are a leading North American producer of high quality and high strength virgin sulfuric acid for mining and industrial applications. We also provide chemical waste handling and treatment services, as well as ex-situ catalyst activation services for the refining and petrochemical industry.

In 2025, we served customers across many end uses and, as of December 31, 2025, operated out of nine strategically located manufacturing facilities.

On September 10, 2025, we entered into a definitive agreement to sell our Advanced Materials & Catalysts business, which includes the Zeolyst Joint Venture, to Technip Energies N.V. for a purchase price of $556.0 million, subject to certain adjustments including for indebtedness, cash, working capital and transaction expenses. The transaction was concluded effective December 31, 2025. The results of operations, financial condition, and cash flows for the Advanced Materials & Catalysts business are presented herein as discontinued operations. Except where noted, any tables, percentages or metrics included within this filing exclude the results of our Advanced Materials & Catalysts business. Refer to Note 4 to our consolidated financial statements for additional information

Stock Repurchase Program

On April 27, 2022, the Board of Directors approved a stock repurchase program that authorized the Company to purchase up to $450.0 million of the Company’s common stock over the four-year period from the date of approval (the “Stock Repurchase Program”). In October 2025, the Board of Directors amended the Stock Repurchase Program to remove the limitation that all repurchases must be made within the four-year period from the date of original approval. For the year ended December 31, 2025, the Company repurchased 5,752,285 shares on the open market at an average price of $8.24 per share, for a total of $47.4 million excluding brokerage commissions and accrued excise tax. As of December 31, 2025, $182.2 million was available for share repurchases under the program.

During the year ended December 31, 2024, the Company repurchased 552,081 shares on the open market at an average price of $9.05 per share, for a total of $5.0 million, excluding brokerage commissions and accrued excise tax.

For possible future repurchases, the actual timing, number, and nature of shares repurchased will depend on a variety of factors, including stock price, trading volume, and general business and market conditions and may be conducted through negotiated transactions, open market repurchases or other means, including through Rule 10b-18 and 10b5-1 trading plans or accelerated share repurchases.

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Key Performance Indicators

Adjusted EBITDA, Adjusted Net Income and Net Debt

Adjusted EBITDA, Adjusted Net Income and Net Debt are financial measures that are not prepared in accordance with GAAP and that we use to evaluate our operating performance, for business planning purposes and to measure our performance relative to that of our competitors. Adjusted EBITDA, Adjusted Net Income and Net Debt are presented as key performance indicators as we believe these financial measures will enhance a prospective investor’s understanding of our results of operations and financial condition. EBITDA consists of net income from continuing operations before interest, taxes, depreciation and amortization. Adjusted EBITDA consists of EBITDA adjusted for (i) non-operating income or expense, and (ii) the impact of certain non-cash, nonrecurring or other items included in net income from continuing operations and EBITDA that we do not consider indicative of our ongoing operating performance. Adjusted Net Income consists of net income from continuing operations adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net income from continuing operations that we do not consider indicative of our ongoing operating performance. Net Debt consists of total debt less cash and cash equivalents. We believe that these non-GAAP financial measures provide investors with useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business.

You should not consider Adjusted EBITDA, Adjusted Net Income, or Net Debt in isolation or as alternatives to the presentation of our financial results in accordance with GAAP. The presentation of Adjusted EBITDA, Adjusted Net Income and Net Debt financial measures may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. In evaluating Adjusted EBITDA and Adjusted Net Income, you should be aware that we are likely to incur expenses similar to those eliminated in this presentation in the future and that certain of these items could be considered recurring in nature. Our presentation of Adjusted EBITDA and Adjusted Net Income should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Reconciliations of Adjusted EBITDA, Adjusted Net Income to GAAP net income and Net Debt to GAAP total debt are included in this “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for each of the respective periods.

Key Factors and Trends Affecting Operating Results and Financial Condition

Sales

Overall, our business continued to benefit from positive demand trends for our products and services in the majority of end uses we serve. Strong demand for refined products continued to support high refinery utilization rates, while more stringent gasoline standards and growing demand for premium gasoline to power higher-compression and turbo-charged engines continued to drive demand for alkylate and for our regeneration services product group. In addition, demand for virgin sulfuric acid across a wide range of industrial applications, including mining, remained favorable.

Cost of Goods Sold

Cost of goods sold consists of variable product costs, fixed manufacturing expenses, depreciation expense and freight expenses. Variable product costs include all raw materials and energy costs that are directly related to the manufacturing process. Fixed manufacturing expenses include all plant employment costs, manufacturing overhead and periodic maintenance costs.

The primary raw materials include spent sulfuric acid, sulfur, acids, bases (including sodium hydroxide, or “caustic soda”) and certain metals. Spent sulfuric acid for our regeneration services product group is supplied by customers as part of their contracts.

Most of our contracts feature take-or-pay volume protection and/or quarterly price adjustments for commodity inputs, labor, the Chemical Engineering Index (U.S. chemical plant construction cost index) and natural gas. About 90% of our sales for the year ended December 31, 2025 were under contracts featuring quarterly price adjustments. The price adjustments generally reflect actual costs for producing sulfuric acid and tend to protect us from volatility in labor, fixed costs and raw material pricing. The take-or-pay volume protection allows us to cover fixed costs through intermittent, temporary production issues at customer refineries.

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While natural gas is not a direct feedstock for any product, natural gas powered machinery and equipment are used to heat raw materials and create the chemical reactions necessary to produce end-products. We maintain multiple suppliers wherever possible and structure our customer contracts when possible to allow for the pass-through of raw material, labor and natural gas costs.

Seasonality

Our regeneration services product group typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer months and lower demand in the winter months as well as fluctuations associated with customer turnarounds. These demand fluctuations generally result in higher sales and working capital requirements in the second and third quarters.

Results of Operations

Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

Highlights

The following is a summary of our financial performance for the year ended December 31, 2025 compared with the year ended December 31, 2024, which excludes the results of the Advanced Materials & Catalysts business for all periods.

Sales

Sales increased $125.2 million to $723.5 million. The increase in sales primarily reflects higher average selling prices from the pass-through effect of higher sulfur costs, favorable contractual pricing for regenerated sulfuric acid and higher sales of virgin sulfuric acid, including the contribution from the acquired Waggaman, Louisiana location, partially offset by lower regenerated sulfuric acid volume.

Gross Profit

Gross profit decreased $5.3 million to $158.1 million. The decrease in gross profit was primarily due to lower regenerated sulfuric acid volume and higher manufacturing costs, partially offset by higher average selling prices.

Operating Income

Operating income decreased $20.2 million to $64.9 million. The decrease in operating income was primarily due to the decrease in gross profit and higher other operating expenses, net.

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The following is our consolidated statements of loss and a summary of financial results for the years ended December 31, 2025 and 2024.

Sales

Sales for the year ended December 31, 2025 were $723.5 million, an increase of $125.2 million, or 20.9%, compared with sales of $598.3 million for the year ended December 31, 2024. The increase in sales reflects higher average selling pricing of $97.9 million, including the pass-through effect of higher sulfur costs of approxi

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