stockrowWhat it does
Solstice Advanced Materials makes specialty materials and provides services used in cooling, energy, electronics, healthcare and other industries. David Sewell is its president and chief executive officer.
Its Refrigerants & Applied Solutions business sells refrigerants for air conditioners, vehicles and industrial cooling systems. It also makes blowing agents used to produce insulating foam, solvents and pharmaceutical packaging materials. Through a joint venture, it provides uranium conversion services to utilities operating nuclear power plants: the process produces uranium hexafluoride, which customers then purify for use in energy applications.
Its Electronic & Specialty Materials business supplies materials used in semiconductor manufacturing, including sputtering targets, which provide material deposited in thin layers during chip production. It also sells thermal materials, high-strength fibers for products such as protective armor and ropes, and high-purity chemicals for laboratories and manufacturers.
Customers include equipment and vehicle manufacturers, construction companies, pharmaceutical packaging producers, nuclear utilities and semiconductor manufacturers. Solstice sells directly to manufacturers and through wholesalers, retailers and other distributors, depending on the product. Its brands include Solstice, Genetron, Aclar, Spectra, Fluka and Hydranal.
The company operates manufacturing and research sites around the world. It became an independent public company after separating from Honeywell in 2025.
How it makes money
Solstice earns revenue by selling materials and providing nuclear conversion services. In FY2025, product revenue was $3.6 billion and services revenue was $299.0 million; in Q3 2026, net sales were approximately $1.05 billion.
Refrigerants & Applied Solutions generated $2.8 billion of FY2025 revenue. Its refrigerant business sells to equipment and automotive manufacturers as well as to wholesalers and retailers that supply replacement and servicing markets. Building Solutions & Intermediates sells materials for insulation and cleaning; Healthcare Packaging supplies barrier films and aerosols; and the nuclear business converts uranium for utilities through the ConverDyn joint venture.
Electronic & Specialty Materials generated $1.1 billion of FY2025 revenue. It sells chipmaking and thermal materials, Spectra fibers and specialty chemicals. Its products generally go directly to other manufacturers, which incorporate them into finished products, and to research laboratories and consumer brands.
Pricing and contract terms vary by business. Some refrigerant and building-solutions contracts with equipment manufacturers run for one to five years and include fixed pricing mechanisms and cost-recovery clauses. Some aftermarket contracts run for one to three years, while healthcare agreements can last up to 10 years or more. Certain contracts include minimum purchase obligations. Multi-year nuclear sales agreements provide for long-term pricing.
Repeat business comes from longstanding customer relationships, long-term contracts and aftermarket sales. Solstice also develops materials with customers for specific applications. New products launched in the preceding five years contributed 50% of sales in 2025.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Products | $3.6 billion | 92.3% | 3.88% |
| Services | $299.0 million | 7.69% | −5.68% |
Customers and how it sells
In 2025, Solstice served over 3,000 customers in approximately 120 countries and territories. Customers span cooling and refrigeration, automotive, nuclear power, construction, healthcare, semiconductors, defense and life sciences.
No single customer accounted for more than 10% of net sales in 2025, and the top 10 customers accounted for less than 20%. Average customer tenure was approximately 10 years. Refrigerants & Applied Solutions served over 700 customers, while Electronic & Specialty Materials served over 2,400 customers.
Sales channels differ by product. Solstice sells stationary refrigerants to equipment manufacturers and aftermarket wholesalers, and automotive refrigerants to vehicle assembly plants as well as aftermarket wholesalers and retailers. It sells healthcare packaging materials to packaging converters and manufacturers. In electronic and specialty materials, it primarily distributes products directly to manufacturers further along the value chain.
The refrigerants and applied-solutions sales team has representatives across the U.S., Europe, Latin America and Asia. Dedicated account directors serve large global customers. Solstice also works with customers on product development and locates manufacturing facilities near customers in some markets. Its nuclear joint venture serves utilities in North America, Europe and Asia.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| U.S. Plan | $2.2 billion | 57.5% | −2.23% |
| Europe, Middle East and Africa | $922.0 million | 23.7% | 4.06% |
| Other International | $730.0 million | 18.8% | 21.9% |
Suppliers and costs
Solstice had 20 manufacturing sites and four standalone research and development sites as of December 31, 2025. Much of its refrigerants and applied-solutions portfolio uses fluorine chemistry, while its other operations manufacture electronic materials, fibers and specialty chemicals. The company also uses production partnerships and joint ventures.
Solstice works with primary and secondary suppliers and uses strategies including local sourcing, dual sourcing and developing new suppliers. It sources sulfur regionally in the Americas and Europe. The company said sulfur inflation affected refrigerants, but it secured pricing to offset that inflation.
Cost of product and services sold increased by $172 million or 7% in 2025, driven by higher volumes in both segments and the product mix in Refrigerants & Applied Solutions. Research and development expenses also increased as Solstice invested in products including Spectra Y and next-generation molecules. Capital expenditures represented 10% of net sales in 2025; the company expected spending to remain at or above that level in the near term for manufacturing expansion.
At Spokane, Solstice says equipment delivery timing affects the pace of its expansion. It is working with suppliers to accelerate the project.
- Revenue$3.9B
- Cost of revenue−$2.6B
- Research and development−$97.0M
- Selling, general and administrative−$421.0M
- Other operating costs−$117.0M
- Operating income$615.0M
Competitive position
Solstice names Arkema, Chemours, Daikin and Orbia as principal competitors in Refrigerants & Applied Solutions. It also faces alternatives based on different technologies and smaller or regional competitors, depending on the product and market. Electronic & Specialty Materials competes with different companies across its product lines.
The company develops customer-specific products, operates manufacturing sites near customers and has long-term relationships and contracts. As of December 31, 2025, it had over 5,700 issued patents and pending applications. It also uses manufacturing know-how, trade secrets and process-related patents.
Our reading: Intellectual property and specialized manufacturing provide a meaningful competitive barrier, particularly where customers require specific formulations or production processes. Customer collaboration and long relationships reinforce that barrier, although contracts and relationships do not eliminate competition.
In nuclear conversion, Solstice and its joint venture partner General Atomics are the only U.S. providers of uranium hexafluoride conversion services. The business serves utilities in several regions and competes in a regulated market. Its multi-year agreements provide for long-term pricing.
Our reading: The sole domestic conversion facility and the expertise needed to operate it support a strong U.S. position, though the business still depends on plant capacity and continued customer demand. In refrigerants, brands and aftermarket distribution support Solstice’s position, while alternative products and established competitors limit the protection they provide.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Arkema | Refrigerants & Applied Solutions products and end markets | Medium |
| Chemours | Refrigerants & Applied Solutions products and end markets | Medium |
| Daikin | Refrigerants & Applied Solutions products and end markets | Medium |
| Orbia | Refrigerants & Applied Solutions products and end markets | Medium |
Growth opportunities
Solstice is investing in capacity and new products for refrigerants, nuclear conversion, semiconductors and thermal management. It expects demand for lower-global-warming-potential refrigerants to benefit from the transition away from older refrigerants and from applications such as heat pumps. It also develops new materials with customers for cooling and semiconductor applications.
The company says its businesses serving data-center and AI-related applications represent approximately 6% of expected 2026 revenue. It expects approximately $100 million of 2026 refrigerant sales from data-center cooling applications and over $150 million of 2026 electronics sales from materials supporting the semiconductor and data-center value chain.
At Spokane, Solstice is expanding sputtering-target capacity and says it is selling everything it can make at the facility. It has pulled forward capital to accelerate the project and is in early discussions about a possible further expansion. The current expansion is a three-year program expected to conclude in 2028.
In nuclear conversion, the company’s backlog reached $2.6 billion in the third quarter of 2026, with contracts extending through 2039. Solstice expects to exceed 10 thousand tons of production in 2026 and says it has a pathway to an additional 1 thousand to 2,000 tons through incremental improvements. It is also evaluating a larger expansion, with a final decision dependent on customer commitments, costs and expected returns.
Solstice and Element Solutions mutually terminated their proposed merger. Solstice continues to evaluate smaller acquisitions alongside investment in its existing businesses.
- $3.6BFY2023
- $3.8BFY2024
- $3.9BFY2025
- $4.2BFY2026 guidance
Structural risks
- Regulation and chemicals: Solstice operates under changing environmental and product regulations. Future restrictions or stronger enforcement affecting fluorinated chemistries and other substances could affect its operations and products.
- Cyclical demand: Construction and semiconductor markets are sensitive to economic conditions. Prolonged reductions in semiconductor fabrication spending or construction activity could affect performance. Solstice also says housing conditions and customer destocking have created headwinds for its stationary 454B refrigerant business.
- Capacity and execution: Solstice is selling all it can produce at Spokane, and equipment delivery timing affects its expansion. A larger nuclear expansion remains subject to customer commitments, project costs and other considerations.
- Supply and costs: Tariffs, conflicts, labor disruptions and regulations can create supply-chain vulnerabilities and pricing fluctuations. Solstice says unsuccessful mitigation could materially affect its results, cash flows or financial condition.
- Separation and joint ventures: Historical results may not represent results as an independent company. The Honeywell separation could create tax indemnification obligations in certain circumstances, and joint-venture partners may have conflicting interests or be unable or unwilling to meet obligations.
Bottom line
Our reading
Solstice is a specialty materials and services business built around customer-specific products, manufacturing expertise and long relationships. Its refrigerants portfolio supplies both equipment makers and aftermarket channels, while nuclear conversion and electronic materials provide different sources of demand. Its growth plans depend on executing capacity projects and securing customer commitments, while regulation, cyclical markets and supply costs remain important exposures.