Quaker Chemical Corporation

What they do

The company develops, produces, and markets a broad range of formulated specialty chemical products and provides chemical management services (Fluidcare) through three segments: Americas, EMEA, and Asia/Pacific. Major product lines include metal removal fluids, rolling lubricants, hydraulic fluids, and surface solutions. Sales are made primarily through its own employees and Fluidcare programs, with the balance through distributors and agents.

Revenue drivers

• Metal removal fluids — Largest product line, accounting for 19.0% of consolidated net sales in 2025.
• Rolling lubricants — Second largest product line, representing 18.3% of consolidated net sales in 2025.
• Hydraulic fluids — Contributed 12.2% of consolidated net sales in 2025.
• Surface solutions — Contributed 10.9% of consolidated net sales in 2025, up from 5.2% in 2024.

Recent performance

In Q2 2026, net sales rose 10% year-over-year to $532.6 million, driven by a 7% increase in sales volumes, favorable FX of 2%, and improved price/mix of 1%. Net income was $26.8 million ($1.55 per diluted share) versus a net loss of $66.6 million in Q2 2025, which included the $88.8 million goodwill impairment. Adjusted EBITDA increased 13% to $85.2 million. For the first half of 2026, net sales were $1.01 billion, net income was $46.5 million, and operating cash flow was $33.2 million.

Strategy

Management is focused on delivering long-term financial and strategic initiatives, including new business wins across all segments and disciplined cost management. They are also addressing raw material cost inflation through pricing actions and have increased the quarterly dividend by approximately 4.3%. The company repurchased $24.2 million of shares in Q2 2026 and announced a new $250 million stock repurchase program.

Risks

• End market cyclicality — Demand is tied to steel, automotive, and other heavy industries, and softness or tariffs in Americas and EMEA have pressured volumes and results.
• Raw material cost inflation — Higher raw material costs have pressured gross margins, and pricing actions may not fully offset these increases.
• Geopolitical disruptions — The conflict in the Middle East has caused shipping disruptions, supply chain delays, and higher costs, which could intensify.
• Tax law changes — The One Big Beautiful Bill Act imposes new limitations on interest deductibility and expands disallowed deductions, with potential impacts in 2026 and 2027.

Outlook

Management expects stable demand entering Q3 2026 with flat to slightly positive end markets for the rest of the year. They anticipate gross margin percentage to stabilize in Q3 at Q2 levels as raw material cost inflation, inventory movements, and price recovery actions work through. The company expects meaningful revenue and adjusted EBITDA growth in 2026, supported by continued share gains and cost management.