CABOT CORPORATION EARNINGS TELECONFERENCE
THIRD QUARTER - FISCAL 2026Q3 Fiscal 2026 1
Executive Leadership Transition
SEAN KEOHANE
President & CEO (2016 -2026)
ERICA McLAUGHLIN
President & CEO
(Effective October 1, 2026)
Q3 Fiscal 2026 3
Q3 2026 Highlights
Diluted EPS of
$0.12;
Adjusted EPS1 of $1.67
Reinforcement Materials segment EBIT of $97 million
Performance Chemicals segment EBIT of
$68 million
Cash Flows from Operations of $75 million
Awarded Platinum rating from EcoVadis
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1. Non-GAAP measure - See Appendix
Battery Materials Platform Supporting Attractive Long-Term Growth
Global Battery Demand Outlook by Applications
Battery Demand Expected to More Than Double by 2030
Business Highlights
Attractive Earnings Profile
FY2026 EBITDA expected at approximately $40M
24% Q3 FY26 TTM EBITDA margin
Leadership positions across EV, BESS and emerging applications
Growing with the leading global battery manufacturers
Non-EV applications represent ~30% of demand
Attractive Earnings Profile FY2026 EBITDA expected at approximately $40M
24% Q3 FY26 TTM EBITDA margin
Other
BESS
EV
Diversified Growth Drivers
Leadership positions across EV, BESS and emerging applications
Growing with the leading global battery manufacturers
Non-EV applications represent ~30% of demand
Consumer /
2025 2026
2027 2028 2029
2030
Source: Benchmark Minerals Intelligence, 2026 Q2 forecast
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Battery Materials - Scaling for Growth
Differentiated technology portfolio serving diverse battery applications Industry-leading portfolio of conductive carbons, carbon nanotubes, carbon nanostructures, blends and dispersions enables tailored solutions across battery applications and optimized performance
Technical expertise, global footprint, and strong customer
relationships support continued adoption across EV, BESS, consumer, and industrial battery applications
Global Conductive Additives Footprint
Manufacturing and technical centers located across every major battery producing region
Manufacturing Capacity Technical Centers
Broad Product Portfolio
Differentiated technology portfolio serving diverse battery applications
Industry-leading portfolio of conductive carbons, carbon nanotubes, carbon nanostructures, blends and dispersions enables tailored solutions across battery applications and optimized performance
Technical expertise, global footprint, and strong customer
relationships support continued adoption across EV, BESS, consumer, and industrial battery applications
Expanding Capacity to Capture Battery Market Opportunities
Strategic investments to support customer growth Capacity expansions in the U.S. and China to meet expected demand growth across battery applications
Expansion leverages existing footprint, providing a capital-efficient approach for capacity additions
Conductive Additives Capacity Expansion
Strategic investments to support customer growth
Capacity expansions in the U.S. and China to meet expected demand growth across battery applications
Expansion leverages existing footprint, providing a capital-efficient approach for capacity additions
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Q3 2026 Financial Highlights
Adjusted EPS1
$1.67
Diluted EPS
$0.12
Cash & Cash Equivalents
$250 Million
Debt Balance
$1.3 Billion
Liquidity
$1.3 Billion
Operating Cash Flow
$75 Million Discretionary Free Cash Flow1
$91 Million
YTD Operating Tax Rate1
29%
FY26 forecast range of 28%-30%
Capex
$38 million
FY26 forecast range of $200 - $215 million
1. Non-GAAP measure - See Appendix
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Reinforcement Materials Segment
1. Non-GAAP measure - See Appendix
Q3 Fiscal 2026 8
Q4 FY26 Outlook
Expect a modest sequential EBIT decline
Anticipate lower seasonal volumes and less favorable regional product mix impact, particularly in EMEA
Q3 FY26 Highlights
Lower gross profit per ton driven by CY26 customer agreement outcomes partially offset by higher volumes and a more favorable regional product mix
Volumes up 5% year-over-year with increases in Asia and the Americas
Operating Performance
Q3 FY26 | Q3 FY25 | o | |
Segment EBIT | $97M | $128M | (24%) |
Segment EBITDA1 | $117M | $146M | (20%) |
EBITDA Margin1 | 20% | 25% |
Performance Chemicals Segment
1. Non-GAAP measure - See Appendix
Q3 Fiscal 2026 9
Q4 FY26 Outlook
Expect segment EBIT to continue to be higher year-over-year, but lower sequentially
Lower sequential EBIT projection driven by lower expected seasonal volumes and the flow through of higher raw materials
Q3 FY26 Highlights
Volumes increased year-over-year in the battery materials and fumed metal oxides product lines
Higher gross profit per ton was primarily due to favorable product mix and price increases implemented ahead of rising material costs
Operating Performance
Q3 FY26 | Q3 FY25 | o | |
Segment EBIT | $68M | $57M | +19% |
Segment EBITDA1 | $91M | $78M | +17% |
EBITDA Margin1 | 26% | 24% |
Tightening our fiscal 2026 Adjusted EPS1 guidance range from
$6.00 to $6.50 per share to $6.15 to $6.45 per share
Expect continued strong cash flow generation, balance sheet strength, and investment grade credit rating
Fiscal 2026 financial outlook Executing our strategy and investing for growthPositioned for Continued Value Creation
Infrastructure, electronics, and energy storage remain strong
growth drivers for our business
Investing in expected high-return growth projects, including conductive additive capacity expansions for battery materials
Continue to leverage operating platform of commercial and operational excellence along with global asset optimization to drive performance
Leadership transition provides continuity as we continue to execute our strategy and drive long term value creation
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Infrastructure, electronics, and energy storage remain strong growth drivers for our business
Investing in expected high-return growth projects, including conductive additive capacity expansions for battery materials
Continue to leverage operating platform of commercial and operational excellence along with global asset optimization to drive performance
Leadership transition provides continuity as we continue to execute our strategy and drive long term value creation
Executing our strategy and investing for growth
Tightening our fiscal 2026 Adjusted EPS1 guidance range from
$6.00 to $6.50 per share to $6.15 to $6.45 per share
Expect continued strong cash flow generation, balance sheet strength, and investment grade credit rating
Fiscal 2026 financial outlook
1. Non-GAAP measure - See Appendix
QUESTIONS & ANSWERS
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APPENDIX
Q3 Fiscal 2026 12
FY26 Guidance & Modeling Assumptions
Full Year Modeling Assumptions | |
Adjusted Earnings per Share1 Interest Expense | ~$6.15 to $6.45 ~($72M) to ($75M) |
General Unallocated Income (Expense) | ~$30M to $35M |
Capital Expenditures | ~$200M to $215M |
Shares Repurchases | ~$100M to $150M |
Operating Tax Rate1 | ~28% to 30% |
Forecast FX Rates | July Rates |
Oil & Energy Prices | July Forward Curve |
1. Non-GAAP measure - See Appendix
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Use of Non-GAAP Financial Measures
This presentation includes references to adjusted earnings per share (EPS), segment EBITDA, adjusted EBITDA, free cash flow, discretionary free cash flow, and operating tax rate, which are non-GAAP measures. Reconciliations of Adjusted EPS to net income (loss) per share attributable to Cabot Corporation, the most directly comparable GAAP financial measure, Segment EBITDA and Adjusted EBITDA to Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies, the most directly comparable GAAP financial measure of each such non-GAAP measure, operating tax rate to effective tax rate, the most directly comparable GAAP financial measure and Free Cash Flow and Discretionary Free Cash Flow to Cash flow from operating activities, the most directly comparable GAAP financial measure, are provided in the tables included in our third quarter 2026 earnings release and filed on our Current Report on Form 8-K dated August 3, 2026.
Reconciliations for segment EBITDA for each segment are included in the following slides.
Cabot does not provide an expected GAAP EPS range or reconciliation of the Adjusted EPS range with an expected GAAP EPS range because, without unreasonable effort, we are unable to predict with reasonable certainty the matters we would allocate to "certain items," including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on GAAP EPS in future periods.
This presentation also includes our forecast of the range we expect our "operating tax rate", which represents the tax rate on our recurring operating results, to fall within. This rate excludes discrete tax items, which are included in the effective tax rate. Discrete tax items are comprised of (i) unusual or infrequent items, (ii) items related to uncertain tax positions, and (iii) other tax items, such as the impact from the timing of losses in certain jurisdictions and cumulative tax rate adjustments, the tax impact of legislative changes and tax accruals on historic earnings due to changes in indefinite reinvested assertions. The operating tax rate also excludes the impact of the items of expense and income we identify as certain items on both our operating income and the tax provision.
Management believes that the operating tax rate is useful supplemental information because it helps our investors compare our tax rate year to year on a consistent basis and to understand what our tax rate on current operations would be without the impact of these items.
Cabot does not provide a forward-looking reconciliation of the operating tax rate range with an effective tax rate range because, without unreasonable effort, we are unable to predict with reasonable certainty the matters we would allocate to "certain items," including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on the effective tax rate in future periods.
To calculate "Discretionary Free Cash Flow" we deduct sustaining and compliance capital expenditures and changes in Net Working Capital from cash flow from operating activities. To calculate "Free Cash Flow" we deduct capital expenditures as disclosed in the consolidated statement of cash flows (as Additions to property, plant and equipment) from cash flow from operating activities.
Explanation of Terms Used
Product Mix. The term "product mix" refers to the mix of types and grade of products sold or the mix of geographic regions where products are sold, and the positive or negative impact this has on the revenue or profitability of the business or segment.
Net Working Capital. The term "net working capital" includes accounts receivable, inventory and accounts payable and accrued liabilities.
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Non-GAAP Financial Measures Adjusted EPS
Fiscal 2026 (A) | ||||
Dec. Q | Mar. Q June Q | Sept. Q | FY 2026 | |
Reconciliation of Adjusted EPS to GAAP EPS Net income (loss) per share attributable to Cabot Corporation Less: Certain items after tax per share Adjusted earnings (loss) per share | $ 1.37 (0.16) | $ 1.27 $ 0.12 (0.34) (1.55) | $ - - | $ 2.77 (2.05) |
$ 1.53 | $ 1.61 $ 1.67 | $ - | $ 4.82 | |
Fiscal 2025 (A) | ||||
Dec. Q | Mar. Q June Q | Sept. Q | FY 2025 | |
Reconciliation of Adjusted EPS to GAAP EPS | ||||
Net income (loss) per share attributable to Cabot Corporation | $ 1.67 | $ 1.69 $ 1.86 | $ 0.79 | $ 6.02 |
Less: Certain items after tax per share | (0.09) | (0.21) (0.04) | (0.91) | (1.23) |
Adjusted earnings (loss) per share | $ 1.76 | $ 1.90 $ 1.90 | $ 1.70 | $ 7.25 |
(A) Per share amounts are calculated after tax. | ||||
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Non-GAAP Financial Measures Adjusted EBITDA
Dollars in millions | Fiscal 2025 | Fiscal 2026 |
June Q | June Q | |
Reconciliation of Adjusted EBITDA to Income (loss) from operations before | ||
income taxes and equity in earnings of affiliated companies | ||
Income (loss) from operations before income taxes and equity in earnings of | ||
affiliated companies | $ 155 | $ 58 |
Interest expense | 19 | 18 |
Certain items | 3 | 78 |
General unallocated (income) expense | (6) | (5) |
Less: Equity in earnings of affiliated companies | (1) | (2) |
Depreciation and amortization | 39 | 43 |
Adjusted EBITDA | $ 211 | $ 194 |
Q3 Fiscal 2026 16
Non-GAAP Financial Measures Segment EBITDA
Dollars in millions | Fiscal 2025 Fiscal 2026 June Q June Q | |
Reinforcement Materials EBIT Reinforcement Materials Depreciation and amortization Reinforcement Materials EBITDA Reinforcement Materials Sales Reinforcement Materials EBITDA Margin | $ 128 18 | $ 97 20 |
$ 146 $ 573 | $ 117 $ 599 | |
25% 20% | ||
Dollars in millions | Fiscal 2025 Fiscal 2026 June Q June Q | |
Performance Chemicals EBIT Performance Chemicals Depreciation and amortization Performance Chemicals EBITDA Performance Chemicals Sales Performance Chemicals EBITDA Margin | $ 57 21 | $ 68 23 |
$ 78 $ 320 | $ 91 $ 351 | |
24% 26% | ||
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Non-GAAP Financial Measures
Free Cash Flow (FCF) & Discretionary Free Cash Flow (DFCF)
Dollars in millions | Fiscal 2026 | ||||
Reconciliation of Free Cash Flow and Discretionary Free Cash Flow to Cash provided by (used in) operating activities | Dec. Q | Mar. Q | June Q | Sept. Q | FY 2026 |
Cash provided by (used in) operating activities (B) Less: Additions to property, plant and equipment Free cash flow Plus: Additions to property, plant and equipment | $ 126 69 | $ 77 45 | $ 75 38 | $ - - | $ 278 152 |
$ 57 69 | $ 32 45 | $ 37 38 | $ - - | $ 126 152 | |
Less: Changes in net working capital (C) Less: Sustaining and compliance capital expenditures Discretionary free cash flow | 5 50 | (19) 33 | (44) 28 | - - | (58) 111 |
$ 71 | $ 63 | $ 91 | $ - | $ 225 | |
(B) As provided in the Condensed Consolidated Statements of Cash Flows. (C) Defined as changes in Accounts and notes receivable, Inventories, and Accounts payable and accrued liabilities as presented on the Condensed Consolidated Statements of Cash Flows. | |||||
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Non-GAAP Financial Measures Operating Tax Rate
TABLE 3: RECONCILIATION OF EFFECTIVE TAX RATE TO OPERATING TAX RATE
Three months ended June 30 2026 2025
Dollars in millions (unaudited) | (Provision) / for Income | Benefit Taxes | (Provision) / Rate for Income | Benefit Taxes | Rate |
Effective Tax Rate | $ | (46) | 79% $ | (43) | 28% |
Less: Non-GAAP tax adjustments(A) | (4) | - | |||
Operating tax rate (C) (D) | $ | (42) | 31% $ | (43) | 28% |
Nine months ended June 30 | 2026 | 2025 | |||
(Provision) / | Benefit | (Provision) / | Benefit | ||
Dollars in millions (unaudited) | for Income | Taxes | Rate for Income | Taxes | Rate |
Effective Tax Rate | $ | (127) | 43% $ | (133) | 29% |
Less: Non-GAAP tax adjustments(A) | (14) | (6) | |||
Operating tax rate (C) (D) | $ | (113) | 29% $ | (127) | 28% |
(A) Non-GAAP tax adjustments are made to arrive at the operating tax provision. It includes the income tax (expense) benefit on certain items, discrete tax items, and, on a quarterly basis the timing of losses in certain jurisdictions. The income tax (expense) benefit on certain items is determined using the applicable rates in the taxing jurisdictions in which the certain items occurred and includes both current and deferred income tax (expense) benefit based on the nature of the certain items. Discrete tax items include, but are not limited to, changes in valuation allowance, uncertain tax positions, and other tax items, such as the tax impact of legislative changes and tax accruals on historic earnings due to changes in indefinite reinvestment assertions.
(B) This table indicates the line items where certain items are recorded in the Consolidated Statements of Operations.
(C) The operating tax rate is calculated based upon management's forecast of the annual operating tax rate for the fiscal year applied to adjusted pretax earnings. The operating tax rate excludes income tax (expense) benefit on certain items, discrete tax items and, on a quarterly basis the timing of losses in certain jurisdictions.
(D) Our operating tax rate for fiscal 2026 is expected to be in the range of 28% to 30%.
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