Qnity Electronics, Inc.

We are one of the largest global leaders in materials and solutions for the semiconductor and electronics industries. We empower our customers’ technology roadmaps to enable advancements in megatrends such as artificial intelligence ("AI"), high-performance computing and advanced connectivity. We partner with leading semiconductor and advanced device manufacturers to address complex challenges and develop solutions that facilitate next-generation technological innovations. With over 50 years of experience in systems engineering and material science, a global manufacturing footprint, and major application labs across the world, we are well-positioned to capitalize on emerging opportunities across various sectors including transportation, data centers, consumer and personal electronics and aerospace and defense.

We are organized into two operating segments:

•Semiconductor Technologies: Our Semiconductor Technologies segment provides a portfolio of innovative materials and solutions utilized across multiple stages of the semiconductor manufacturing process. These advanced materials are qualified into customers’ roadmaps, designed to improve chip performance, enhance yield, and enable leading-edge node technology.

•Interconnect Solutions: Our Interconnect Solutions segment offers a comprehensive range of best-in-class material solutions that address the evolving complexities of signal integrity, thermal and power management and advanced packaging. These solutions are integral for advanced electronics hardware, including complex printed circuit boards and advanced semiconductor packaging.

Our broad portfolio of solutions and materials across both Semiconductor Technologies and Interconnect Solutions segments positions us as a comprehensive solutions provider for our customers. We are often the partner of choice due to our strong innovation capabilities and extensive materials and engineering expertise. In a fast-paced electronics industry, our customers’ needs are highly performance-driven and our long-standing relationships and strong renewal rates demonstrate our commitment to delivering excellence in a demanding market.

Macroeconomic Environment

Ongoing developments in U.S. and foreign policy, including uncertainty regarding tariffs on product imports, have heightened global trade tensions and increased macroeconomic and geopolitical uncertainty. To date the conflict in the Middle East has not materially impacted our financial condition, however, the conflict has increased disruption, instability and volatility in markets globally, and if it intensifies or expands could adversely affect our economic condition, supply chains and/or energy prices. The global nature of our business exposes us and our customers to risks arising from these conditions, including disruptions in the availability and pricing of raw materials, shipping logistics challenges, disruptions in global energy markets, fuel price increases, potential retaliatory actions by other countries, rising interest rates, and broader impacts on economic conditions, which could affect our financial condition, liquidity, or results of operations. These factors may reduce demand for our products, impair our competitiveness—particularly relative to locally or domestically sourced alternatives—harm customer relationships, and/or decrease profitability, any of which could adversely affect our business, financial condition, and results of operations. While we have meaningful exposure to global trade dynamics, our local‑for‑local sourcing of raw materials helps limit our exposure to tariff‑related risks and shipping logistics. However, these actions may not fully mitigate the impact of prolonged or escalating geopolitical or trade disruptions.

Recent Developments

Senior Secured Term Loan Facility

On July 1, 2026 (the "Repricing Closing Date"), we entered into the first amendment to the Credit Agreement, as defined in Note 12 to the unaudited interim Consolidated Financial Statements in this Quarterly Report (the "First Amendment"). The First Amendment reduced the applicable margin on term SOFR borrowings under the Senior Secured Term Loan Facility from 2.00% to 1.75% (and in the case of base rate loans, from 1.00% to 0.75%), with no material changes to principal, maturity, amortization, or covenant structure. In connection with the repricing, the repriced borrowings under the Senior Secured Term Loan Facility are subject to a 1.00% premium on certain prepayments, repayments, and amendments constituting a “Repricing Event” occurring on or prior to the date that is six (6) months after the Repricing Closing Date. We analyzed the changes of the First Amendment on a lender-by-lender basis and determined that the transaction would primarily be accounted for as a modification, with a portion of it accounted for as debt extinguishment and corresponding new debt issuance. As a result, we recognized a loss on extinguishment of $3 million in the third quarter of 2026, primarily related to unamortized debt issuance costs related to the portion of the Senior Secured Term Loan Facility that was extinguished.

As part of the First Amendment, the majority of the Senior Secured Term Loan Facility lenders decided to roll over their loan balances immediately preceding the repricing, while certain lenders elected to be repaid and reassign all or a portion of their loan balances. On July 1, 2026, approximately $1,978 million of the outstanding principal was rolled over as a non-cash financing activity. The remaining approximately $360 million of the outstanding principal balance was repaid and subsequently reissued.

In connection with the First Amendment, we incurred $2 million of third-party fees in the third quarter of 2026. Fees attributable to the modified debt were expensed as incurred and recorded within Other income (expense) - net, in our unaudited interim consolidated statement of operations during the three months ended September 30, 2026. Fees attributable to the issuance of new debt were capitalized as debt issuance costs. Capitalized debt issuance costs associated with the new debt issuance were less than $1 million.

The First Amendment is expected to reduce annual cash interest expense by approximately $6 million.

Share Repurchase Authorization

On February 20, 2026, our Board of Directors approved a share repurchase authorization of up to $500 million of common stock (the "$500M Authorization"). Under the $500M Authorization, repurchases of common stock may be effected from time to time, either on the open market (including pre-set trading plans) or other transactions in accordance with applicable securities laws. The $500M Authorization has no expiration date and will terminate once the authorized amount of shares have been repurchased and retired or when terminated by our Board of Directors. The timing and amount of repurchases under the program will depend on a variety of factors. During the three months ended September 30, 2026, we repurchased 180,563 shares under the $500M Authorization for $25 million at an average share price of $138.44 per share. During the nine months ended September 30, 2026, we repurchased 583,251 shares under the $500M Authorization for $75 million at an average share price of $128.55 per share. All shares repurchased under the $500M Authorization have been retired. As of September 30, 2026, the aggregate amount of common stock remaining for repurchase under the $500M Authorization was $425 million.

Transformation Plan

In February 2026, we launched a multi‑year transformation plan, designed to strengthen operational productivity, enhance commercial and innovation excellence and optimize our presence in key markets. Costs incurred under this plan primarily comprise external consulting and separation services, severance, asset‑related charges, and program‑related operating costs. The transformation plan does not represent a company‑wide restructuring event; rather, it consists of a series of discrete initiatives, including separation‑related activities, integration efforts, and productivity programs.