Ingevity Narrows 2026 EBITDA Outlook After Pavement Drop

The Tip Desk · November 11, 2026 · 3 min read

Third-quarter net sales were $305.1 million, down 8% after the Road Markings sale, while net income from continuing operations rose to $51.1 million, or $1.46 a share.

Ingevity Corporation (NGVT), the specialty materials company, reported third-quarter net sales of $305.1 million, down 8% from a year earlier after the April 15 sale of its Road Markings product line. Excluding that business, sales increased 2%.

Net income from continuing operations was $51.1 million, or $1.46 a share, compared with $40.8 million, or $1.10 a share, a year earlier. Adjusted earnings from continuing operations were $56.7 million, or $1.63 a share. Adjusted EBITDA from continuing operations was $108.0 million, down $2.4 million from the year-ago quarter; the adjusted EBITDA margin expanded 230 basis points to 35.4%.

The company said favorable pricing and product mix, strong operating performance in Performance Materials and improved results in Advanced Polymer Technologies partially offset higher input and logistics costs in Pavement Technologies and Advanced Polymer Technologies.

Performance Materials, the largest reportable segment, posted net sales of $154.1 million, nearly flat to the prior year. The company attributed the result to resilient North American demand, continued consumer preference for hybrid vehicles, and higher non-auto filtration sales driven primarily by pricing, which offset lower volumes from softness in automotive applications in China and Europe. Segment EBITDA was $83.4 million, essentially unchanged, with a 54.1% margin consistent with the year-ago period.

Pavement Technologies net sales decreased 24% to $106.0 million, primarily because of the Road Markings divestiture. Excluding Road Markings, sales were nearly flat as higher prices offset softer demand. Persistently higher asphalt costs, driven by crude oil inflation, continued to increase project costs for customers, the company said, pressuring demand. Segment EBITDA was $19.6 million, down $7.3 million, reflecting lower volumes, retention of dis-synergy costs largely due to the road-markings sale, and higher input and logistics costs. Segment EBITDA margin was 18.5%.

Advanced Polymer Technologies net sales increased 18% to $45.0 million on higher pricing, including a surcharge to offset increased input costs, and a mix shift toward higher-value derivative products. Segment EBITDA rose $0.7 million to $11.7 million. Segment EBITDA margin was 26.0%, down 280 basis points, as the company said pricing surcharges helped recover higher input costs but carried little to no incremental margin. Corporate and other expenses were $6.7 million.

Third-quarter operating cash flow was $99.2 million. Free cash flow was $85.5 million, down $32.3 million, which the company said was driven primarily by $21 million of working-capital benefits in the year-ago period from divested businesses. Capital expenditures were $14 million. Share repurchases totaled approximately $39 million at a weighted average price of $71.45 a share, bringing year-to-date buybacks to about $125 million. About $172 million of capacity remained under the current authorization. Net leverage was 2.5 times.

Following the quarter, Ingevity narrowed its full-year 2026 adjusted EBITDA outlook to $385 million to $395 million, maintaining the midpoint of the prior range. The company expects full-year net sales of approximately $1.1 billion and diluted adjusted EPS of $5.25 to $5.45. Free cash flow is now expected to be between $220 million and $230 million, excluding the second-quarter $113.2 million litigation settlement payment, reflecting increased capital expenditures and working-capital investments as the company enters 2027. The company said it intends to use free cash flow to keep leverage within a long-term target range of 2.0 to 2.5 times and return capital to shareholders.

President and CEO Dave Li said the company continues to advance the sale of Advanced Polymer Technologies, though the timing of an announced agreement may extend into early 2027.