Executives from Solstice Advanced Mat (NASDAQ:SOLS) highlighted broad-based growth across several business lines and outlined expansion plans tied to nuclear energy, refrigerants, and electronics demand during remarks at the Barclays Industrial Conference.
Recent results and 2026 outlook
Chief Executive Officer David Sewell said the company’s most recently reported quarter delivered 8% top-line growth, with momentum driven by what he characterized as “strong secular trends.” Sewell pointed to double-digit growth in three areas: nuclear, refrigerants and thermal management, and electronics.
Nuclear conversion: capacity, expansion, and demand signals
Sewell said Solstice operates the only nuclear conversion site in the United States, one of five globally. He described the process as converting mined uranium (yellowcake) into uranium hexafluoride (UF6) using hydrogen fluoride at the company’s Illinois facility, after which material goes to enrichment and then fabrication.
He linked the nuclear outlook to rising power demand, including from data center growth, and cited public policy commentary and industry activity, including an administration goal he described as “400% growth in nuclear energy over the next 25 years,” along with 75 new nuclear reactors under construction and another 100 announced, excluding small modular reactors.
Sewell said the company has announced a 20% debottlenecking for 2026 and is also exploring a larger expansion at the Metropolis site. He added that the site is “basically sold out through 2030,” and confirmed this statement included planned expansions. On competitive risk, Sewell emphasized Solstice’s vertical integration in hydrofluoric acid, a “60-plus year legacy” of UF6 manufacturing, and what he described as proprietary processes. He also said the company works closely with the Department of Energy and currently has permitting for 15,000 tons of UF6.
Refrigerants: regulatory conversion, mix, and margin expectations
Sewell described refrigerants as a core business and said the segment posted a double-digit growth quarter and double-digit growth for 2025. He attributed growth to regulation-driven conversion toward lower global warming potential products, saying hydrofluoroolefins (HFOs) have become the standard. According to Sewell, Europe converted earlier and the United States has now completed its conversion.
He said Solstice has a strong intellectual property position and noted it co-developed the HFO molecule. He described the refrigerants end-market split as roughly half commercial and industrial HVAC and half automotive.
On profitability, Sewell said the transition from HFCs to HFOs created some margin compression because the U.S. aftermarket opportunity has not yet fully developed. He said that as more units enter service, the aftermarket (including “break bulk and packaging”) should contribute higher margin business and support margin improvement. Sewell also referenced “transitory costs” related to the company’s split from Honeywell.
He reiterated the company’s growth framework discussed at an investor day: high single-digit growth for HFOs, partially offset by low single-digit cannibalization of HFCs, resulting in a mid-single-digit outlook overall. He said benefits from the completed conversion are “starting now,” and he expects U.S. aftermarket contribution to begin arriving in the second half of 2026, while noting continued “great data center growth” and stable automotive demand.
Electronics and data centers: three-way exposure and capacity expansion
Sewell said data centers represent a “explosive growth opportunity” because Solstice participates across three areas:
- Refrigerants for cooling
- Electronics materials tied to semiconductors, particularly leading-edge nodes
- Nuclear-related exposure to power generation needs
He also discussed shifts in cooling requirements as chips become smaller, faster, and more densely stacked, saying air cooling is increasingly insufficient and the industry is moving toward direct-to-chip and immersion cooling.
In electronics, Sewell said Solstice’s largest exposure is in “depositions,” including manufacturing copper-manganese sputtering targets. He said the company is the only manufacturer in the United States for those targets and argued that high-purity requirements at leading-edge nodes are an advantage as chip fabrication returns to the U.S. Sewell cited 19% growth in fourth-quarter electronics and said the company announced an expansion in Spokane that will double manufacturing capacity for sputtering targets, describing the business as currently “running hand-to-mouth” on demand.
Capital allocation, balance sheet, and additional growth areas
Management emphasized a “very healthy balance sheet” with “low leverage” and said the business has not completed an acquisition in 10 years, which they suggested provides flexibility. Sewell said the company has increased R&D spending and highlighted an intellectual property portfolio of more than 5,700 patents. He also stated that Solstice’s return on invested capital is over 19% and that innovation and organic expansions are the first priority, alongside a long-term goal of a 25%+ margin profile.
Mike Leithead added that the company announced its first dividend. Sewell said the company aims to remain conservatively levered, suggesting it could operate somewhat higher than 1.5x leverage but does not want to be “over-levered” beyond three times, except potentially for a temporary spike associated with M&A.
On customer alignment, Sewell said expansions are pursued in partnership with customers. He cited an example of expanding HFO technology into propellants for inhalers with AstraZeneca, saying the customer partnered on capital deployment and that the capability can be extended to other medical device applications.
Executives also discussed defense as another growth area, with Sewell referencing “next generation Spectra technology” for lightweight ballistic protection and saying capacity expansion is underway because the business is “sold out.”
Finally, management said conditions in more cyclical segments such as building materials and healthcare were more challenging in 2025, with some “green shoots” seen in January, but their forecast assumes stability rather than a strong rebound unless factors like interest rates, construction activity, and PMI improve.
Discussing the company’s early life as a public company, Leithead said the shareholder base experienced significant turnover after the spin, estimating roughly 50% of Honeywell shareholders “needed to sell.” He said subsequent filings showed a diversified ownership base including index investors and investors spanning traditional materials, clean energy, and technology.
About Solstice Advanced Mat (NASDAQ:SOLS)
Solstice Advanced Materials, Inc (NASDAQ: SOLS) is a publicly traded company that develops, manufactures and supplies advanced functional materials and specialty formulations for industrial and electronic applications. The company focuses on creating materials intended to enable or improve performance in end products, providing technical development, small- to medium-scale manufacturing and application support to customers that require tailored material solutions.
Its business activities typically include research and development of proprietary chemistries, formulation work to meet customer specifications, and production of materials for use in sectors such as electronics, sensors, coatings and other specialty markets.
