Qnity Electronics, Inc.Q
Qnity Electronics, Inc. Segments Disclosure
SEGMENTS AND GEOGRAPHIC REGIONS
The Company's segments are aligned with the market verticals they serve, while maintaining integration and innovation strengths within strategic value chains. The Company's Chief Executive Officer is its CODM. Effective in the first quarter of 2025, in anticipation of the Separation, DuPont and Qnity realigned their segment structure. As a result of this realignment, Qnity consists of two operating and reportable segments: Semiconductor Technologies (“Semi”) and Interconnect Solutions (“ICS”). All periods presented have been adjusted to conform to the current segment reporting structure. This realignment is consistent with how the CODM now assesses performance. Major products by segment include: Semi (which includes chemical mechanical planarization (“CMP”) pads and slurries, photoresists, functional sub-layers, advanced overcoats, post-CMP cleaners, post-Etch residue removers and emerging cleans) and ICS (which includes copper pillar plating, copper redistribution layer, solder bump plating, under bump metallization, photoresists, packaging dielectrics, gap fillers, phase change, specialty thermal interface materials, thermally conductive insulators, copper plating solutions, dry film photoresists, laminates and polyimide films). The Company operates globally in substantially all of its product lines. Transfers of products between operating segments are generally valued at cost, to the extent such transfers are applicable.
The Company's measure of profit/loss for segment reporting purposes is Adjusted Operating EBITDA as this is the manner in which the CODM assesses performance and allocates resources. The CODM utilizes Adjusted Operating EBITDA to assess financial performance and allocate resources by comparing actual results to historical and previously forecasted results. Beginning with this reporting period, the Company refers to the previously disclosed “Operating EBITDA” metric as “Adjusted Operating EBITDA". This represents a change in name only. The Company defines Adjusted Operating EBITDA as earnings (i.e., “Income (loss) before income taxes”) before interest, depreciation, amortization, non-operating pension and other post-employment benefits / charges, and foreign exchange gains / losses, indirect legacy costs, and adjusted for significant items. Reconciliations of these measures are provided on the following pages.
Long-lived assets are attributed to geographic regions based on asset location.
| Long-lived Assets by Geographic Region | December 31, | |||||||
| In millions | 2025 | 2024 | ||||||
| Americas: | $ | 1,099 | $ | 1,013 | ||||
| United States | 1,061 | 977 | ||||||
Other Americas 1 | 38 | 36 | ||||||
EMEA 2 | 28 | 28 | ||||||
| Asia Pacific: | 574 | 507 | ||||||
| Taiwan | 215 | 193 | ||||||
| South Korea | 150 | 131 | ||||||
| China | 98 | 85 | ||||||
| Other Asia Pacific | 111 | 98 | ||||||
| Total | $ | 1,701 | $ | 1,548 | ||||
1.Includes Canada and Latin America.
2.Europe, Middle East and Africa.
| Segment Revenue, Significant Segment Expenses and Segment Adjusted Operating EBITDA | For the years ended December 31, | |||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (In millions) | Semiconductor Technologies | Interconnect Solutions | Semiconductor Technologies | Interconnect Solutions | Semiconductor Technologies | Interconnect Solutions | ||||||||||||||
| Segment net sales | $ | 2,642 | $ | 2,112 | $ | 2,450 | $ | 1,885 | $ | 2,251 | $ | 1,784 | ||||||||
Less 1: | ||||||||||||||||||||
| Cost of sales | $ | 1,324 | $ | 1,230 | $ | 1,220 | $ | 1,119 | $ | 1,137 | $ | 1,143 | ||||||||
| Selling, general and administrative expenses | 274 | 295 | 267 | 276 | 239 | 257 | ||||||||||||||
| Research and development expenses | 222 | 130 | 194 | 118 | 184 | 119 | ||||||||||||||
Amortization of intangibles & other segment items 2 | 51 | 152 | 49 | 176 | 68 | 186 | ||||||||||||||
| Add: | ||||||||||||||||||||
| Equity in earnings (losses) of nonconsolidated affiliates | $ | 48 | $ | (1) | $ | 40 | $ | (3) | $ | 21 | $ | (5) | ||||||||
Depreciation and amortization 3 | 126 | 235 | 124 | 255 | 133 | 259 | ||||||||||||||
| Segment Adjusted Operating EBITDA | $ | 945 | $ | 539 | $ | 884 | $ | 448 | $ | 777 | $ | 333 | ||||||||
1.The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.
2.Other segment items include immaterial other gains or losses and miscellaneous income and expenses.
3.Depreciation is a reconciling item to segment Adjusted Operating EBITDA as it is included within Cost of sales, Selling, general and administrative expenses and Research and development expenses.
| Reconciliation of Segment Adjusted Operating EBITDA to Income before income taxes | For the years ended December 31, | |||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||
| Semiconductor Technologies Segment Adjusted Operating EBITDA | $ | 945 | $ | 884 | $ | 777 | ||||||||
| Interconnect Solutions Segment Adjusted Operating EBITDA | 539 | 448 | 333 | |||||||||||
| Reportable Segment Adjusted Operating EBITDA | $ | 1,484 | $ | 1,332 | $ | 1,110 | ||||||||
| + | Corporate Adjusted Operating EBITDA | $ | (43) | $ | (25) | $ | (27) | |||||||
| - | Depreciation and amortization | 376 | 394 | 403 | ||||||||||
| + | Interest income 1 | 2 | — | — | ||||||||||
| - | Interest expense | 65 | — | — | ||||||||||
| + | Non-operating pension/OPEB benefit credits (costs) 1 | 2 | 1 | (2) | ||||||||||
| + | Foreign exchange (losses) gains, net 1 | (4) | 5 | (1) | ||||||||||
| + | Indirect legacy benefits (costs) - net | 5 | — | — | ||||||||||
| + | Significant items charge | (43) | (18) | (45) | ||||||||||
| Income before income taxes | $ | 962 | $ | 901 | $ | 632 | ||||||||
1.The twelve months ended December 31, 2025 excludes accrued interest income earned on employee retention credits. Refer to details of significant items below.
The following tables summarize the pre-tax impact of significant items that are excluded from Adjusted Operating EBITDA above:
Significant Items for the Year Ended December 31, 2025 | Semiconductor Technologies | Interconnect Solutions | Corporate | Total | ||||||||||
| In millions | ||||||||||||||
Acquisition, integration and separation costs 1 | $ | — | $ | — | $ | (25) | $ | (25) | ||||||
Restructuring and asset related charges - net 2 | (3) | (4) | (13) | (20) | ||||||||||
Employee retention credit 3 | 2 | — | — | 2 | ||||||||||
| Total | $ | (1) | $ | (4) | $ | (38) | $ | (43) | ||||||
1. Acquisition, integration and separation costs primarily related to financial advisory, accounting, consulting, and other professional advisory fees related to the Separation.
2. Includes restructuring actions and asset related charges. See Note 4 for additional information.
3. Reflects the accrued interest earned on employee retention credits and is recorded in “Interest income” within the “Other income (expense) - net” line item in the Company’s Consolidated Financial Statements.
Significant Items for the Year Ended December 31, 2024 | Semiconductor Technologies | Interconnect Solutions | Corporate | Total | ||||||||||
| In millions | ||||||||||||||
Restructuring and asset related charges - net 1 | $ | (1) | $ | (11) | $ | 4 | $ | (8) | ||||||
Legal costs 2 | (23) | — | — | (23) | ||||||||||
Gain on licensing agreement 3 | 13 | — | — | 13 | ||||||||||
| Total | $ | (11) | $ | (11) | $ | 4 | $ | (18) | ||||||
1. Includes restructuring actions and asset related charges. See Note 4 for additional information.
2. Reflects legal settlement charges relating to an intellectual property matter.
3. Reflects the license fee income received under an intellectual property license agreement.
Significant Items for the Year Ended December 31, 2023 | Semiconductor Technologies | Interconnect Solutions | Corporate | Total | ||||||||||
| In millions | ||||||||||||||
Restructuring and asset related charges - net 1 | $ | — | $ | (13) | $ | (39) | $ | (52) | ||||||
Gain on divestiture 2 | — | — | 7 | 7 | ||||||||||
| Total | $ | — | $ | (13) | $ | (32) | $ | (45) | ||||||
1. Includes restructuring actions and asset related charges. See Note 4 for additional information.
2. Reflected in “Other income (expense) - net”.
| Segment and Corporate & Other Information | Semiconductor Technologies | Interconnect Solutions | Corporate | Total | ||||||||||
| In millions | ||||||||||||||
| For the Year Ended December 31, 2025 | ||||||||||||||
| Total assets | $ | 7,022 | $ | 5,594 | $ | 1,454 | $ | 14,070 | ||||||
| Investment in nonconsolidated affiliates | 375 | 11 | — | 386 | ||||||||||
| Capital expenditures | 146 | 114 | 15 | 275 | ||||||||||
| For the Year Ended December 31, 2024 | ||||||||||||||
| Total assets | $ | 6,520 | $ | 5,270 | $ | 483 | $ | 12,273 | ||||||
| Investment in nonconsolidated affiliates | 370 | 12 | — | 382 | ||||||||||
| Capital expenditures | 88 | 95 | 29 | 212 | ||||||||||
| For the Year Ended December 31, 2023 | ||||||||||||||
| Total assets | $ | 6,561 | $ | 5,482 | $ | 473 | $ | 12,516 | ||||||
| Investment in nonconsolidated affiliates | 370 | 16 | — | 386 | ||||||||||
| Capital expenditures | 121 | 70 | 26 | 217 | ||||||||||
| Capital Expenditure Reconciliation to Statements of Cash Flows | 2025 | 2024 | 2023 | ||||||||
| In millions | |||||||||||
| Segment and Corporate Totals | $ | 275 | $ | 212 | $ | 217 | |||||
Other 1 | 10 | (12) | 14 | ||||||||
| Total cash used for capital expenditures | $ | 285 | $ | 200 | $ | 231 | |||||
1.Reflects the incremental cash spent or unpaid on capital expenditures; total capital expenditures are presented on a cash basis.
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About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.