Stepan Company reported a significant 54% decrease in net income to $10.8 million for Q3 2025, primarily due to a higher effective tax rate and increased interest expense. However, adjusted EBITDA saw a 6% increase to $56.2 million, and free cash flow improved to $40.2 million, driven by working capital reduction. Sales volume increased by 1% year-over-year.
Reported net income decreased by 54% to $10.8 million, while adjusted net income also fell by 54% to $10.9 million.
EBITDA and Adjusted EBITDA both increased by 6% year-over-year, reaching $56.1 million and $56.2 million respectively.
Global sales volume was up 1% year-over-year, with Polymer volume up 8% and double-digit growth in Agricultural and Industrial Cleaning end markets within Surfactants.
Free cash flow for the quarter was $40.2 million, significantly improved due to a reduction in working capital.
Stepan Company is focused on accelerating business strategies through operational excellence, improved product mix, and enhanced free cash flow generation. The company anticipates continued growth in key strategic end markets for Surfactants and improving Polymer demand. They expect to deliver full-year Adjusted EBITDA growth and positive free cash flow in 2025, despite ongoing market and tariff uncertainties.
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