Quaker Chemical Corp: Form 10-Q for the period ended Sep 30, 2026

As used in this Report, the terms “Quaker Houghton,” the “Company,” “we” and “our” refer to Quaker Chemical Corporation (doing business as Quaker Houghton), its subsidiaries, and associated companies, unless the context otherwise requires.

Executive Summary

Quaker Houghton is the global leader in industrial process fluids. With a presence around the world, including operations in over 25 countries, our customers include thousands of the world’s most advanced and specialized steel, aluminum, automotive, aerospace, offshore, container, mining, and metalworking companies. Our high-performing, innovative and sustainable solutions are backed by best-in-class technology, deep process knowledge, and customized services. Quaker Houghton is headquartered in Conshohocken, Pennsylvania, located near Philadelphia in the U.S.

Net sales in the third quarter of 2026 were $544.5 million, an increase of 10% compared to $493.8 million in the third quarter of 2025. This increase was primarily driven by an increase in selling price and product mix of approximately 7% and an increase in sales volumes of approximately 3%. The increase in selling price and product mix reflects pricing actions taken to offset higher raw material costs, as well as changes in the mix of products and services, and the impact of our index-based customer contracts. The increase in sales volumes compared to the prior year was primarily a result of new business wins across all segments.

The Company reported net income in the third quarter of 2026 of $30.0 million, or $1.73 earnings per diluted share, compared to net income of $30.5 million, or $1.75 earnings per diluted share in the third quarter of 2025. Excluding non-recurring and non-core items in each period, the Company’s third quarter 2026 non-GAAP net income and earnings per diluted share were $41.4 million and $2.39 compared to $36.3 million and $2.08, respectively, in the prior year. The increase in current quarter non-GAAP earnings was primarily driven by an increase in net sales, partially offset by an increase in selling, general and administrative expenses (“SG&A”) and a decrease in non-GAAP gross margin. The Company’s current quarter adjusted EBITDA was $89.8 million compared to $82.9 million in the third quarter of 2025, primarily driven by the increase in net sales, partially offset by higher input costs and SG&A expenses. See the Non-GAAP Measures and Consolidated Operations Review sections of this Item below for additional details.

The Company’s third quarter 2026 operating performance in each of its three reportable segments: (i) Americas; (ii) EMEA; and (iii) Asia/Pacific, reflects similar drivers to that of the Company’s consolidated performance. Operating earnings for the EMEA segment increased compared to the prior year quarter, primarily due to an increase in net sales and an improvement in segment operating margins. Operating earnings for the Americas segment increased compared to the prior year quarter, primarily due to an increase in net sales, partially offset by lower segment operating margins. Operating earnings for the Asia/Pacific segment decreased compared to the prior year quarter primarily due to lower segment operating margins, partially offset by an increase in net sales. Additional details of segment operating performance are provided in the Reportable Segments Review in the Operations section of this Item below.

Net cash flows provided by operating activities were $47.6 million in the first nine months of 2026 compared to $89.9 million of net cash flows provided by operating activities the first nine months of 2025. The lower operating cash inflow year-over-year reflects higher net cash outflows from working capital, partially offset by improved operating performance and lower outflows from restructuring activities in the first nine months of 2026 compared to the first nine months of 2025. The key drivers of the Company’s operating cash flow and working capital are further discussed in the Company’s Liquidity and Capital Resources section of this Item below.

Overall, the Company’s results in the third quarter of 2026 reflect an increase in net sales in all segments compared to the prior year quarter, driven by new business wins and an increase in selling price and product mix, and the Company’s continued focus on delivering on its long-term financial and strategic initiatives.

Recent geopolitical developments, including the escalation of the military conflict involving Iran, have increased uncertainty in the Middle East and global markets. While we do not have direct operations in Iran, our business is exposed to the current disruptions to international shipping routes, supply chain delays, and increased raw material and transportation costs. Additionally, volatility in global energy prices resulting from the conflict may impact our operating expenses and margins. In addition, the potential imposition of new or expanded sanctions against Iran or entities doing business in the region could restrict our ability to transact with certain partners and may require us to undertake additional compliance measures, review our contractual arrangements, or incur higher costs to ensure adherence to applicable laws. We are actively monitoring the situation and have implemented contingency plans, including raising our selling prices to cover higher raw material costs and increasing inventory levels where feasible. At this time, the conflict has not had a material impact on our financial results; however, due to the unpredictable nature and scope of the conflict, we cannot guarantee that future developments will not materially affect our business, operations, or financial condition.

On July 4, 2025, H.R. 1, commonly known as the One Big Beautiful Bill Act (the “OBBB”), was signed into law. The OBBB includes significant changes to the federal corporate tax provisions and extends certain otherwise expiring provisions of the 2017 Tax Cuts and Jobs Act. Among other things, the legislation restores 100% bonus depreciation for eligible property, reinstates expensing for domestic research and experimental expenditures, imposes new limitations on interest expense deductibility, and expands disallowed deductions for certain employee remuneration. The legislation has multiple effective dates, with certain provisions effective in 2025 and other provisions implemented in 2026 and 2027 forward. The provisions effective in 2025 did not have a material impact to our consolidated financial statements, and the provisions effective in 2026 and 2027 are not expected to have a material impact to our consolidated financial statements.

Critical Accounting Policies and Estimates

Our significant accounting policies are described in “Management’s Discussion and Analysis” and “Note 1 – Significant Accounting Policies” to the Consolidated Financial Statements in our 2025 Form 10-K. There have been no material changes to the critical accounting policies and estimates disclosed in the 2025 Form 10-K.

Recently Issued Accounting Standards

See Note 3, Recently Issued Accounting Standards, to the Condensed Consolidated Financial Statements for a discussion regarding recently adopted accounting standards and recently issued accounting standards not yet adopted.

Liquidity and Capital Resources

We had cash and cash equivalents of $167.0 million and $179.8 million as of September 30, 2026 and December 31, 2025, respectively. Cash held by subsidiaries in foreign countries was approximately $155.9 million and $171.4 million at September 30, 2026 and December 31, 2025, respectively. The $12.8 million decrease in cash and cash equivalents was the net result of $30.8 million of cash used in financing activities, $28.7 million of cash used in investing activities, and a $0.9 million unfavorable impact of foreign currency translation, partially offset by $47.6 million of cash provided by operating activities.

Net cash flows provided by operating activities were $47.6 million in the first nine months of 2026 compared to net cash flows provided by operating activities of $89.9 million in the first nine months of 2025. The decrease in net operating cash flow year-over-year reflects higher net cash outflows from working capital, partially offset by improved operating performance and lower outflows from restructuring activities. The higher net cash outflows from working capital are due to higher net cash outflows from accounts receivable due to an increase in net sales and timing of collections and higher net cash outflows for purchases of inventory due to higher raw material costs and strategic inventory builds at production sites in advance of planned manufacturing transitions and to support customer service levels, and in response to global supply chain risks in connection with the conflict in the Middle East. This is partially offset by higher inflows from the timing of payments of accounts payable and higher accruals for incentive compensation.

Net cash flows used in investing activities were $28.7 million in the first nine months of 2026 compared to $193.0 million in the first nine months of 2025. The decrease in cash used in investing activities year-over-year is primarily the result of $164.2 million of payments, net of cash acquired, in the prior year related to the acquisitions of Chemical Solutions & Innovations (Pty) Ltd. (“CSI”), Dipsol Chemicals Co., Ltd., (“Dipsol”) and Natech, Ltd., (“Natech”). Additionally, payments related to capital expenditures decreased by $1.2 million in the current year. This is partially offset by $3.0 million proceeds from asset dispositions in the prior year. See Note 2, Business Acquisitions, to the Condensed Consolidated Financial Statements for further information about business acquisitions.

Net cash flows used in financing activities were $30.8 million in the first nine months of 2026 compared to $79.3 million cash provided by financing activities in the first nine months of 2025. The decrease in net cash inflows from financing activities is primarily driven by a $907.7 million increase in payments on the Company’s U.S. and Euro Term Loan and Revolver loans, which is primarily related to repaying in full all outstanding loan commitments under the Credit Facility in connection with amending the Credit Facility in April 2026, as further discussed below. Proceeds from the Revolver decreased by $3.9 million, which is primarily related to a revolver borrowing during the first six months of 2025 to fund the purchase price of the Dipsol acquisition, partially offset by revolver borrowings upon executing the amendment in April 2026. The first nine months of 2026 also includes a $6.2 million net cash outflow relating to financing-related debt issuance costs associated with amending the Credit Facility. This is partially offset by $800.0 million increase in proceeds from the U.S. and Euro Term Loan debt upon executing the amendment to the Credit Facility in April 2026 and a $9.0 million decrease in share repurchases compared to the prior year.

The Company, along with its wholly owned subsidiary, Quaker Houghton B.V., as borrowers, maintain a syndicated credit facility to support ongoing capital needs (the “Credit Facility”). Bank of America, N.A. serves as administrative agent under the Credit Facility for the Euro Term Loan, U.S. Term Loan, and Revolver (each as defined below), and, as of the Term Loan B Amendment (as defined below), JPMorgan Chase Bank, N.A. serves as administrative agent for the Term B Loans (as defined below). The Credit Facility was first entered into in 2019 and was amended in June 2022 to establish a $150.0 million Euro-equivalent senior secured term loan, a $600.0 million senior secured term loan, and a $500.0 million senior secured revolving credit facility, each maturing in June 2027.

In April 2026, the Company and its lenders entered into a fourth amendment to the Credit Facility (the “Fourth Amendment”). As so amended, the Credit Facility comprised (A) a $250.0 million Euro-equivalent senior secured term loan (the “Euro Term Loan”) (B) a $550.0 million senior secured term loan (the “U.S. Term Loan”) and (C) an $800.0 million senior secured revolving credit facility (the “Revolver”), each maturing in April 2031. The Company used the proceeds from the Fourth Amendment to, among other things, repay in full all outstanding loans and terminate the revolving credit commitments then outstanding. The Company has the right to increase the amount of the Credit Facility by an aggregate amount not to exceed (a) the greater of (i) $331.0 million and (ii) 100% of Consolidated EBITDA, subject to certain conditions including the agreement to provide financing by any lender providing such increase. The Credit Facility contains customary affirmative and negative covenants, financial covenants and events of default. Financial covenants contained in the Credit Facility include a consolidated interest coverage ratio test and a consolidated net leverage ratio test. As of September 30, 2026, the Company was in compliance with all of the Credit Facility covenants. See Note 14, Debt, to the Condensed Consolidated Financial Statements for additional information.

As of September 30, 2026 and December 31, 2025, the Company had Credit Facility borrowings outstanding of $883.3 million and $859.7 million, respectively. The Company’s other debt obligations are primarily industrial development bonds, bank lines of credit and municipality-related loans, which totaled $11.2 million as of September 30, 2026 and December 31, 2025. Total unused capacity under these arrangements, excluding the Credit Facility, as of September 30, 2026 was approximately $79 million. The Company’s total net debt as of September 30, 2026, which consists of total borrowings of $894.6 million less cash and cash equivalents of $167.0 million, was approximately $727.6 million.

The weighted average variable interest rate incurred on the outstanding borrowings under the Credit Facility during the three and nine months ended September 30, 2026 was approximately 4.6% and 4.70%, respectively. As of September 30, 2026, the interest rate on the outstanding borrowings under the Credit Facility was approximately 4.60%. In addition to paying interest on outstanding principal, the Company is also required to pay an annual commitment fee related to unutilized commitments under the Revolver, depending on the Company’s consolidated net leverage ratio. The Fourth Amendment to the Credit Facility modified the range of the annual commitment fee from 0.150% to 0.275% to 0.125% to 0.275%.

As of September 30, 2026, the Company had unused capacity under the Revolver of approximately $707.7 million, which is net of bank letters of credit of approximately $2.3 million.

In order to manage the Company’s exposure to variable interest rate risk associated with the Credit Facility, such as the Secured Overnight Financing Rate (“SOFR”), in the first quarter of 2023, the Company entered into $300.0 million notional amounts of three-year interest rate swaps to convert a portion of the Company’s variable-rate borrowings into a fixed-rate obligation. During March 2026, the Company’s interest rate swap contracts expired. In April 2026, the Company entered into $400.0 million notional amount of four-year interest rate swaps, converting a portion of the Company’s variable rate borrowings relating to the Credit Facility into an average fixed rate of 3.58% plus the applicable margin. See Note 17, Hedging Activities, to the Condensed Consolidated Financial Statements for further information.

Prior to executing the Fourth Amendment, the Company had $0.5 million of debt issuance costs recorded as a reduction of Long-term debt and $1.1 million of debt issuance costs recorded within Other non-current assets on the Condensed Consolidated Balance Sheets. In connection with executing the Fourth Amendment, the Company recorded debt modification and extinguishment costs of approximately $1.7 million, which includes the write-off of certain previously unamortized debt issuance costs and a portion of third-party costs that were incurred to execute the Fourth Amendment. Also in connection with executing the Fourth Amendment, during the second quarter of 2026 the Company capitalized $6.2 million of creditor debt issuance costs and certain third-party costs. Approximately $2.4 million of the capitalized costs were attributed to the Euro Term Loan and U.S. Term Loan and were recorded as a direct reduction of Long-term debt on the Condensed Consolidated Balance Sheets. Approximately $3.8 million of the capitalized costs were attributed to the Revolver and recorded within Other non-current assets on the Condensed Consolidated Balance Sheets. These capitalized costs, as well as the previously capitalized costs that were not written off, will collectively be amortized into Interest expense over the five-year term. As of September 30, 2026, the Company had $2.6 million of debt issuance costs recorded as a reduction of Long-term debt and $4.3 million of debt issuance costs recorded within Other non-current assets.

On October 1, 2026, the Company, JPMorgan Chase Bank, N.A., certain guarantors and other lenders entered into a Fifth Amendment (the “Term Loan B Amendment”) to the Credit Agreement. The Term Loan B Amendment amended the Credit Agreement to establish a new class of senior secured U.S. dollar-denominated term B loans (“Term B Loans”) under a new, $550.0 million seven-year term loan B facility (the “Term Loan B Facility”). The proceeds from the Term Loan B Facility were used to repay in full the U.S. Term Loan outstanding under the Credit Agreement.

The Term Loan B Facility bears interest, at the Company’s election, at the Base Rate or Term SOFR plus an Applicable Rate of 1.750% for Term SOFR Loans and 0.750% for Base Rate Loans. The Term Loan B Facility matures on October 1, 2033. See Note 14, Debt, to the Condensed Consolidated Financial Statements for additional information.

The Company uses foreign exchange forward contracts to economically hedge the impact of the variability in exchange rates on certain foreign currency-denominated assets and liabilities. During the nine months ended September 30, 2026, the Company entered into and settled forward contracts resulting in other expense of $0.8 million as compared to $0.5 million of other income during the nine months ended September 30, 2025. In connection with the Dipsol acquisition, in March 2025, the Company entered into foreign exchange forward contracts with various financial institutions with an aggregate notional amount of $155.3 million to hedge the variability in U.S. dollar-Japanese yen exchange rates associated with the purchase price. These contracts settled on April 1, 2025 in connection with the Dipsol acquisition. During the nine months ended September 30, 2025, the Company recognized a $1.4 million foreign currency loss in Other expense, net relating to changes in fair value of these instruments as of the settlement date. See Note 17, Hedging Activities, to the Condensed Consolidated Financial Statements for further information.

In 2026, the Company initiated a global business transformation program (the “2026 program”), encompassing several strategic transformation and restructuring initiatives. The 2026 program primarily involves simplifying the organizational structure of legal entities, projects associated with information technology infrastructure initiatives, the optimization of specific product portfolios through targeted rationalization efforts, the optimization of certain supply chain activities and related workforce reductions. The 2026 program began in the first quarter of 2026 and is expected to be complete in 2028. The Company expects the program to generate at least $20.0 million to $30.0 million of annualized cost savings. The Company recognized restructuring and related charges and cash payments relating to the settlement of restructuring liabilities of $12.3 million and $7.3 million during the nine months ended September 30, 2026, respectively, under this program. The Company expects total cash costs of this program to be approximately 1 to 1.5 times annualized savings.

During 2022, the Company initiated a global cost and optimization program (the “2022 program”) to improve its cost structure and drive a more profitable and productive organization. The Company has achieved its annualized cost savings goal from this program of at least $20.0 million. During 2025, the Company approved additional actions under the 2022 program, which are expected to generate approximately an additional $40.0 million of annualized cost savings. These actions are expected to be substantially complete by the first half of 2027. The Company recognized restructuring and related charges of $11.4 million and $31.1 million for the nine months ended September 30, 2026 and 2025, respectively, under this program. The Company made cash payments related to the settlement of restructuring liabilities under the 2022 program during the first nine months of 2026 of approximately $10.7 million compared to $21.7 million in the first nine months of 2025. The Company expects total cash costs of this program to be approximately 1 to 1.5 times annualized savings. See Note 7, Restructuring and Related Activities, to the Condensed Consolidated Financial Statements for further information.

As of September 30, 2026, the Company’s gross liability for uncertain tax positions, including interest and penalties, was $12.7 million. The Company cannot determine a reliable estimate of the timing of cash flows related to its uncertain tax position liability. However, should the entire liability be paid, the amount of the payment may be reduced by up to $5.4 million as a result of offsetting benefits in other tax jurisdictions.

The Company previously maintained a share repurchase program (the “2024 Share Repurchase Program”), which was approved by the Board and announced by the Company on February 28, 2024, which authorized the repurchase of up to $150.0 million of Quaker Chemical Corporation common stock, and had no expiration date. On May 13, 2026, the Board approved a new share repurchase program (the “2026 Share Repurchase Program”), authorizing the Company to repurchase up to an aggregate of $250.0 million of the Company’s outstanding common stock. The 2026 Share Repurchase Program was effective immediately, replaced the 2024 Share Repurchase Program, and has no expiration date. The Company made purchases under the 2024 Share Repurchase Program and 2026 Share Repurchase Program while each was in effect during the first half of 2026. The Company made purchases under the 2026 Share Repurchase Program during the third quarter of 2026. See Item 2, Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities, within Part II of this Report for further information.

The Company believes that its existing cash, anticipated cash flows from operations and available liquidity will be sufficient to support its operating requirements and fund its business objectives for at least the next twelve months, including but not limited to payments of dividends to shareholders, share repurchases, capital expenditures, other growth opportunities (including potential acquisitions), pension plan contributions, implementing actions to achieve the Company’s sustainability goals and other potential known or anticipated contingencies. The Company also believes it has sufficient additional liquidity to support its operating requirements and to fund its business obligations for the period beyond the next twelve months, including the aforementioned items which are expected to recur annually, as well as future principal and interest payments on the Company’s Credit Facility, tax obligations and other long-term liabilities. The Company’s liquidity is affected by many factors, some based on normal operations of our business and others related to the impact of global events on our business and on global economic conditions as well as industry uncertainties, which we cannot predict. We also cannot predict economic conditions and industry downturns or the timing, strength or duration of recoveries. We may seek, as we believe appropriate, additional debt or equity financing that would provide capital for corporate purposes, working capital funding, additional liquidity needs or to fund future growth opportunities, including possible acquisitions and organic investments. The timing and amount of potential additional capital requirements cannot be determined at this time and will depend on a number of factors, including the actual and projected demand for our products, specialty chemical industry conditions, competitive factors, and the condition of financial markets, among others.

Operations

Consolidated Operations Review – Comparison of the Third Quarter of 2026 with the Third Quarter of 2025

The following table summarizes the sales variances by reportable segment and consolidated operations from the prior year:

Net sales in the third quarter of 2026 were $544.5 million, an increase of 10% compared to $493.8 million in the third quarter of 2025. This increase was primarily driven by an increase in selling price and product mix of approximately 7% and an increase in sales volumes of approximately 3%. The increase in selling price and product mix reflects pricing actions taken to offset higher raw material costs, as well as changes in the mix of products and services, and the impact of our index-based customer contracts. The increase in sales volumes compared to the prior year was primarily a result of new business wins across all segments.

Cost of goods sold (“COGS”) was $351.0 million in the third quarter of 2026 compared to $313.0 million in the third quarter of 2025, an increase of approximately $38.0 million, or 12%. The increase in COGS reflects an increase in current year sales volumes and an increase in global raw material costs, partially offset by a $0.7 million loss related to an out-of-period inventory adjustment in the third quarter of 2025.

Gross profit was $193.5 million in the third quarter of 2026 compared to $180.9 million in the third quarter of 2025, an increase of $12.6 million, or 7%, primarily due to an increase in net sales and a $0.7 million loss related to an out-of-period inventory adjustment in the third quarter of 2025, partially offset by an increase in global raw material costs. The Company’s reported gross margin in the third quarter of 2026 was 35.5% compared to 36.6% in the third quarter of 2025. The Company’s non-GAAP gross margin in the third quarter of 2026 was 35.5% compared to 36.8% in the third quarter of 2025. See the Non-GAAP Measures section of this Item below for additional details.

SG&A expense was $136.4 million in the third quarter of 2026 compared to $126.5 million in the third quarter of 2025, an increase of approximately $9.9 million, or 8%, primarily driven by an increase in incentive compensation, an increase in costs associated with the relocation of the Company’s headquarters, and an increase in business transformation costs as part of the 2026 program.

The Company incurred Restructuring and related charges of $8.3 million and $7.7 million during the third quarter of 2026 and 2025, respectively, primarily related to additional reductions in headcount and facility closure costs as part of the 2022 program and 2026 program. See the Non-GAAP Measures section below and Note 7, Restructuring and Related Activities, to the Condensed Consolidated Financial Statements for additional information.

Operating income in the third quarter of 2026 was $48.9 million compared to the operating income of $46.6 million in the third quarter of 2025. Excluding non-recurring and non-core expenses that are not indicative of the future operating performance of the Company described in the Non-GAAP Measures section of this Item below, the Company’s non-GAAP operating income was $63.1 million in the third quarter of 2026 and $57.9 million in the third quarter of 2025. The increase in non-GAAP operating income was primarily due to an increase in net sales, partially offset by higher SG&A and lower non-GAAP gross margins, as described above.

The Company had Other expense, net of $0.8 million in the third quarter of 2026 as compared to Other expense, net of $0.3 million in the third quarter of 2025. The third quarter of 2026 included foreign exchange transaction losses of $1.2 million compared to foreign exchange transaction losses of $2.5 million in the prior year. Additionally, the third quarter of 2025 included income from non-income tax credits of $2.6 million, an earnout liability adjustment of $0.8 million, and a $0.9 million multiemployer plan withdrawal charge.

Interest expense was $10.0 million in the third quarter of 2026 compared to $10.9 million in the third quarter of 2025, a decrease of approximately $0.9 million, primarily as a result of decreases in interest rates, partially offset by higher outstanding borrowings.

The Company’s effective tax rates for the third quarters of 2026 and 2025 were 31.1% and 26.2%, respectively. The Company’s effective tax rate for the third quarter of 2026 was largely driven by our mix of pre-tax earnings and withholding taxes. Comparatively, the effective tax rate for the third quarter of 2025 was largely driven by our mix of pre-tax earnings and withholding taxes, offset by return to provision adjustments and net favorable reductions in uncertain tax positions. Excluding the impact of non-recurring and non-core items in each quarter, described in the Non-GAAP Measures section of this Item below, the Company estimates that its effective tax rates for the third quarters of 2026 and 2025 would have been approximately 27% and 28%, respectively. The Company may experience continued volatility in its effective tax rates due to several factors, including the timing of tax audits, the expiration of applicable statutes of limitations as they relate to uncertain tax positions, the unpredictability of timing and amount of certain incentives in various tax jurisdictions, and the timing and amount of certain share-based compensation-related tax benefits, among other factors. In addition, the foreign tax credit valuation allowance, or absence thereof, is based on a number of factors, including forecasted mix of earnings, which may vary.

Equity in net income of associated companies was $3.8 million in the third quarter of 2026 compared to $4.3 million in the third quarter of 2025, a decrease of $0.5 million, primarily due to lower current year income from the Company’s 32% investment in Primex, a captive insurance company.

Net (loss) income attributable to noncontrolling interest was immaterial in the third quarter of 2026 and 2025.

Consolidated Operations Review – Comparison of the First Nine Months of 2026 with the First Nine Months of 2025

The following table summarizes the sales variances by reportable segment and consolidated operations from the prior year:

Net sales were $1,557.6 million in the first nine months of 2026 compared to $1,420.2 million in the first nine months of 2025. The net sales increase of $137.4 million, or 10%, year-over-year reflects an increase in organic sales volumes of approximately 5%, increases in selling price and product mix of approximately 2%, a favorable foreign currency of approximately 2%, and contributions from acquisitions of approximately 1%. The increase in organic sales volumes, which was led by the Asia/Pacific segment, was primarily a result of continued new business wins across all segments. The increase in selling price and product mix reflects pricing actions taken to offset higher raw material costs, as well as changes in the mix of products and services, and the impact of our index-based customer contracts.

COGS was $998.1 million in the first nine months of 2026 compared to $906.3 million in the first nine months of 2025. The increase in COGS of approximately $91.8 million, or 10%, primarily reflects an increase in spend on the increase in current year sales volumes and an increase in global raw material costs. Additionally, COGS in the first nine months of 2025 includes a $2.9 million gain related to an out-of-period inventory adjustment, which is partially offset by $6.0 million amortization of the fair value step-up in Dipsol’s inventories as a result of the Dipsol acquisition.

Gross profit was $559.5 million in the first nine months of 2026 compared to $513.8 million in the first nine months of 2025, an increase of approximately $45.7 million, or 9%, primarily due to an increase in net sales as well as $6.0 million amortization of the fair value step-up in Dipsol’s inventories as a result of the Dipsol acquisition in the first nine months of 2025, partially offset by $2.9 million gain related to an out-of-period inventory adjustment in the first nine months of 2025. The Company’s reported gross margin in the first nine months of 2026 was 35.9% compared to 36.2% in the first nine months of 2025. The Company’s non-GAAP gross margin in the first nine months of 2026 was 35.9% compared to 36.4% in the first nine months of 2025. See the Non-GAAP Measures section of this Item below for additional details.

SG&A was $412.7 million in the first nine months of 2026 compared to $372.1 million in the first nine months of 2025, an increase of $40.6 million, or 11%, primarily driven by an increase in SG&A relating to acquisitions, an increase in incentive compensation, an increase in business transformation costs under the 2026 program, and unfavorable impacts from foreign currency translation.

The Company incurred Restructuring and related charges of $23.8 million and $31.1 million during the first nine months of 2026 and 2025, respectively, related to additional reductions in headcount and facility closure costs under the Company’s restructuring programs. See the Non-GAAP Measures section of this Item, below.

There were no impairment charges during the nine months ended September 30, 2026. During the second quarter of 2025, the Company recorded an $88.8 million non-cash impairment charge to write down the remaining value of goodwill associated with the Company’s EMEA reportable segment. This non-cash impairment charge was the result of the Company’s conclusion that the negative impacts of the lower than projected financial performance, driven by the continuation of soft end market conditions, as well as an increase in the Company’s cost of capital, driven by uncertainty around the potential negative impacts of tariffs, represented a triggering event for the Company’s EMEA reporting unit and the associated goodwill, as well as the related asset group. See Note 13, Goodwill and Other Intangible Assets, to the Condensed Consolidated Financial Statements for additional information.

Operating income in the first nine months of 2026 was $123.0 million compared to operating income of $21.8 million in the first nine months of 2025. The increase in operating income was primarily driven by the $88.8 million non-cash impairment charge recorded during the nine months ended September 30, 2025 described above. Excluding non-recurring and non-core expenses that are not indicative of the future operating performance of the Company described in the Non-GAAP Measures section of this Item below, the Company’s current year non-GAAP operating income increased to $163.8 million for the first nine months of 2026 compared to $154.3 million in the prior year’s first nine months, primarily due to an increase in net sales, partially offset by an increase in SG&A and lower non-GAAP gross margins.

The Company had Other expense, net of $0.4 million in the first nine months of 2026 compared to Other expense, net of $1.6 million in the first nine months of 2025. The first nine months of 2026 and 2025 both included foreign exchange transaction losses, which were $5.9 million higher in the prior year and income from non-income tax credits, which were $2.8 million lower in the current year. The first nine months of 2026 included debt extinguishment and modification costs of $1.7 million and a product liability claim reimbursement of $1.0 million. In contrast, the first nine months of 2025 included a $2.1 million gain on disposals of property and a multiemployer plan withdrawal charge of $0.9 million. See the Non-GAAP Measures section of this Item below.

Interest expense of $29.8 million decreased $3.5 million in the first nine months of 2026 compared to $33.3 million in the first nine months of 2025 primarily as a result of decreases in interest rates, partially offset by higher outstanding borrowings.

The Company’s effective tax rates for the first nine months of 2026 and 2025 were 32.5% and (169.5)%, respectively. The Company’s effective tax rate for the nine months ended September 30, 2026 was largely driven by the mix of pre-tax earnings and withholding taxes. Comparatively, the effective tax rate for the nine months ended September 30, 2025 was primarily impacted by the mix of pre-tax earnings, goodwill impairment charges, and withholding taxes offset by return to provision adjustments and net favorable reductions in uncertain tax positions. The Company expects continued volatility in its effective tax rates due to several factors, including the timing and scope of tax audits and the expiration of applicable statutes of limitations as they relate to uncertain tax positions, the unpredictability of the timing and amount of certain incentives in various tax jurisdictions, the treatment of certain acquisition-related costs and the timing and amount of certain share-based compensation-related tax benefits, among other factors. In addition, the foreign tax credit valuation allowance, or absence thereof, is based on a number of factors, including forecasted mix of earnings, which may vary. Excluding the impact of non-recurring and non-core items in each period, described in the Non-GAAP Measures section of this Item below, the Company estimates that its effective tax rates would have been approximately 28% for the first nine months of 2026 and 2025.

Equity in net income of associated companies was $13.8 million in the first nine months of 2026 compared to $12.3 million in the first nine months of 2025. The increase of $1.5 million was primarily due to higher current year income from the Company’s 50% equity interest in a joint venture in Korea.

Net (loss) income attributable to noncontrolling interest was less than $0.1 million in the first nine months of 2026 and 2025.

Reportable Segments Review - Comparison of the Third Quarter of 2026 with the Third Quarter of 2025

The Company’s reportable segments reflect the structure of the Company’s internal organization, the method by which the Company’s resources are allocated and the manner by which the Chief Operating Decision Maker of the Company assesses performance. The Company has three reportable segments: (i) Americas; (ii) EMEA; and (iii) Asia/Pacific.

Segment operating earnings for each of the Company’s reportable segments are comprised of the segment’s net sales less directly related product costs and other segment items. Operating expenses not directly attributable to the net sales of each respective segment, such as certain corporate and administrative costs and restructuring charges, are not included in segment operating earnings. Other items not specifically identified with the Company’s reportable segments include Interest expense and Other expense, net.

Americas

Americas represented approximately 47% of the Company’s consolidated net sales in the third quarter of 2026. This segment’s net sales were $254.0 million, an increase of $31.2 million, or 14%, compared to the third quarter of 2025. This was driven by an increase in selling price and product mix of approximately 8% and an increase in sales volumes of approximately 6%. The increase in selling price and product mix was primarily attributable to pricing actions taken to offset higher raw material costs, as well as changes in the mix of products and services, and the impact of our index-based customer contracts. Sales volumes increased compared to the prior year primarily due to new business wins. Foreign currency translation remained consistent compared to the prior year. Segment operating earnings were $65.7 million, an increase of $6.7 million, or 11%, compared to the third quarter of 2025, primarily due to an increase in net sales.

EMEA

EMEA represented approximately 28% of the Company’s consolidated net sales in the third quarter of 2026. This segment’s net sales were $152.5 million, an increase of $8.6 million, or 6%, compared to the third quarter of 2025. This was driven by an increase in selling price and product mix of approximately 10%, partially offset by a decrease in organic sales volumes of approximately 2% and an unfavorable impact from foreign currency translation of approximately 2%. The increase in selling price and product mix was primarily attributable to pricing actions taken to offset higher raw material costs, as well as changes in the mix of products and services, and the impact of our index-based customer contracts. The decrease in organic sales volumes was primarily driven by the reversal of pre-buy activity in the prior quarter of 2026, partially offset by new business wins. The unfavorable foreign currency translation impact was primarily due to the strengthening of the U.S. dollar against the Euro. Segment operating earnings were $31.2 million, an increase of $4.7 million, or 18%, compared to the third quarter of 2025, primarily due to an increase in net sales and lower SG&A, partially offset by higher input costs.

Asia/Pacific

Asia/Pacific represented approximately 25% of the Company’s consolidated net sales in the third quarter of 2026. This segment’s net sales were $138.1 million, an increase of $10.9 million, or 9%, compared to the third quarter of 2025. This was driven by an increase in organic sales volumes of approximately 5%, an increase in selling price and product mix of approximately 3%, and a favorable impact from foreign currency translation of approximately 1%. The increase in organic sales volumes was primarily driven by new business wins. The increase in selling price and product mix was primarily attributable to pricing actions taken to offset higher raw material costs, as well as changes in the mix of products and services, and the impact of our index-based customer contracts. The favorable foreign currency translation impact was primarily due to the weakening of the U.S. dollar against the Chinese renminbi. Segment operating earnings were $35.1 million, a decrease of $0.5 million, or 1%, compared to the third quarter of 2025, primarily due to higher input costs and higher SG&A, partially offset by an increase in net sales.

Reportable Segments Review - Comparison of the First Nine Months of 2026 with the First Nine Months of 2025

Americas

Americas represented approximately 45% of the Company’s consolidated net sales in the first nine months of 2026. This segment’s net sales were $704.3 million, an increase of $46.7 million, or 7%, compared to the first nine months of 2025. This was driven by an increase in organic sales volumes of approximately 3%, an increase in selling price and product mix of approximately 3%, and a favorable impact of foreign currency translation of approximately 1%. Sales volumes increased compared to the prior year due to new business wins. The increase in selling price and product mix was primarily attributable to pricing actions taken to offset higher raw material costs, as well as changes in the mix of products and services, and the impact of our index-based customer contracts. The favorable foreign exchange impact was primarily due to the weakening of the U.S. dollar against the Brazilian real during the first nine months of 2026 compared to 2025. The Americas segment’s operating earnings were $176.8 million, an increase of $0.5 million, compared to the first nine months of 2025, primarily driven by an increase in net sales, partially offset by higher input costs and higher SG&A.

EMEA

EMEA represented approximately 29% of the Company’s consolidated net sales in the first nine months of 2026. This segment’s net sales were $453.0 million, an increase of $39.9 million, or 10%, compared to the first nine months of 2025. This was the result of a favorable foreign currency translation impact of approximately 4%, an increase in organic sales volumes of approximately 3%, and an increase in selling price and product mix of approximately 3%. The favorable foreign currency translation impact was primarily due to the weakening of the U.S. dollar against the Euro. Sales volumes increased compared to the prior year due to new business wins. The increase in selling price and product mix was primarily attributable to pricing actions taken to offset higher raw material costs, as well as changes in the mix of products and services, and the impact of our index-based customer contracts. The EMEA segment’s operating earnings were $89.5 million, an increase of $14.6 million, or 20%, compared to the first nine months of 2025, primarily driven by an increase in net sales.

Asia/Pacific

Asia/Pacific represented approximately 26% of the Company’s consolidated net sales in the first nine months of 2026. This segment’s net sales were $400.3 million, an increase of $50.8 million, or 15%, compared to the first nine months of 2025. This was driven by an increase in organic sales volumes of approximately 8%, contributions from the acquisition of Dipsol of approximately 4%, a favorable impact of foreign currency translation of approximately 2%, and an increase in selling price and product mix of approximately 1%. The increase in organic sales volumes was primarily driven by new business wins. The favorable foreign exchange impact was primarily due to the weakening of the U.S. dollar against the Chinese renminbi. The increase in selling price and product mix was primarily attributable to pricing actions taken to offset higher raw material costs, as well as changes in the mix of products and services, and the impact of our index-based customer contracts. The Asia/Pacific segment’s operating earnings were $105.9 million, an increase of $15.7 million, or 17%, compared to the first nine months of 2025, primarily driven by an increase in net sales.

Non-GAAP Measures

The information in this Form 10-Q includes non-GAAP (unaudited) financial information that includes EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross margin, taxes on income before equity in net income of associated companies – adjusted, non-GAAP net income and non-GAAP earnings per diluted share. The Company believes these non-GAAP financial measures provide meaningful supplemental information as they enhance a reader’s understanding of the financial performance of the Company, facilitate a comparison among fiscal periods, and exclude items that management believes are not indicative of future operating performance or considered core to the Company’s operations. Non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for the financial information presented in accordance with GAAP. In addition, our definitions of EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross margin, taxes on income before equity in net income of associated companies – adjusted, non-GAAP net income, and non-GAAP earnings per diluted share, as discussed and reconciled below to the most comparable GAAP measures, may not be comparable to similarly named measures reported by other companies.

The Company presents EBITDA, which is calculated as net income attributable to the Company before depreciation and amortization, interest expense, and taxes on income before equity in net income of associated companies. The Company also presents adjusted EBITDA, which is calculated as EBITDA plus or minus certain items that management believes are not indicative of future operating performance or considered core to the Company’s operations. The Company presents non-GAAP operating income, which is calculated as operating income plus or minus certain items that are not considered indicative of future operating performance or considered core to the Company’s operations. Additionally, the Company presents non-GAAP gross profit, which is calculated as gross profit plus or minus certain items that management believes are not considered indicative of future operating performance or considered core to the Company’s operations. Adjusted EBITDA margin, non-GAAP operating margin, and non-GAAP gross margin are calculated as the percentage of adjusted EBITDA, non-GAAP operating income, and non-GAAP gross profit to consolidated net sales, respectively. The Company believes these non-GAAP measures provide transparent and useful information and are widely used by analysts, investors, and competitors in our industry as well as by management in assessing the operating performance of the Company on a consistent basis.

Additionally, the Company presents non-GAAP net income and non-GAAP earnings per diluted share as additional performance measures. Non-GAAP net income is calculated as adjusted EBITDA, defined above, less depreciation and amortization, interest expense, and taxes on income before equity in net income of associated companies, in each case adjusted, as applicable, for any depreciation, amortization, interest or tax impacts resulting from the non-core items identified in the reconciliation of net income attributable to the Company to adjusted EBITDA. Non-GAAP earnings per diluted share is calculated as non-GAAP net income per diluted share as accounted for under the “two-class share method.” The Company believes that non-GAAP net income and non-GAAP earnings per diluted share provide transparent and useful information and are widely used by analysts, investors, and competitors in our industry as well as by management in assessing the performance of the Company on a consistent basis.

Certain of the prior period non-GAAP financial measures presented in the following tables have been adjusted to conform with current period presentation. The following tables reconcile the Company’s non-GAAP financial measures (unaudited) to their most directly comparable GAAP (unaudited) financial measures (dollars in thousands unless otherwise noted, except per share amounts):

38

Management’s Discussion and Analysis

39

Management’s Discussion and Analysis

(a) Restructuring and related charges, net represent the costs incurred by the Company associated with the Company’s restructuring programs and facility closure actions. See Note 7, Restructuring and Related Activities, to the Condensed Consolidated Financial Statements for additional information.

(b) Acquisition-related expenses include expenses associated with the Company’s recent and potential acquisitions, including legal, financial, consulting and other costs.

(c) Business transformation costs represent expenses associated with the Company’s global business transformation program which was initiated in 2026. These costs generally relate to one-time third-party consulting costs relating to simplifying the organizational structure of legal entities, projects associated with information technology infrastructure initiatives, the optimization of specific product portfolios through targeted rationalization efforts, and the optimization of certain supply chain activities. See Note 7, Restructuring and Related Activities, to the Condensed Consolidated Financial Statements for additional information.

(d) Pension and postretirement benefit costs, non-service components represents the pre-tax, non-service components of the Company’s pension and postretirement net periodic benefit cost in each period. See Note 9, Pension and Other Postretirement Benefits, and Note 10, Other Expense, net, to the Condensed Consolidated Financial Statements for additional information.

(e) Other charges (credits) include professional fees incurred in connection with tax audits, certain consultant and advisory expenses for the Company’s long-term strategic planning, and other items.

(f) Equity income in a captive insurance company represents the after-tax income attributable to the Company’s interest in Primex, Ltd. (“Primex”), a captive insurance company. The Company holds a 32% investment in and has significant influence over Primex, and therefore accounts for this interest under the equity method of accounting.

(g) Currency conversion impacts of hyper-inflationary economies represents the foreign currency remeasurement impacts associated with the Company’s affiliates in Argentina and Türkiye whose local economies are designated as hyper-inflationary under U.S. GAAP. These pre-tax foreign currency remeasurement impacts are not deductible for tax purposes for both the three and nine months ended September 30, 2026 and 2025. The charges incurred relate to the immediate recognition of foreign currency remeasurement in the Condensed Consolidated Statements of Operations.

(h) Loss on acquisition-related hedges represents the mark-to-market and settlement of the foreign exchange forward contracts entered into in March 2025 for an aggregate notional amount totaling $155.3 million to hedge the variability of exchange rate impacts between the U.S. Dollar and Japanese yen in connection with the acquisition of Dipsol. See Note 2, Business Acquisitions, and Note 17, Hedging Activities, to the Condensed Consolidated Financial Statements for additional information.

(i) Loss (gain) on sale of assets represents the gain recognized on the sale of certain property previously classified as held for sale and gain on sale of other assets that are not considered core to the Company’s operations. See Note 7, Restructuring and Related Activities, to the Condensed Consolidated Financial Statements for additional information.

(j) Discrete tax items include certain impacts of uncertain tax positions. See Note 11, Income Taxes, to the Condensed Consolidated Financial Statements for more information.

(k) Acquisition-related depreciation and amortization represents amortization expense recorded for definite-lived intangible assets in connection with the Dipsol and Natech acquisitions and depreciation expense recorded in connection with the fair value step-up of Dipsol’s property, plant, and equipment. See Note 2, Business Acquisitions, and Note 13, Goodwill and Other Intangible Assets, for more information.

(l) Acquisition-related step-up inventory amortization represents the amortization of the fair value step-up in Dipsol’s inventories as a result of the acquisition, which was recorded within Cost of goods sold in the Company’s Condensed Consolidated Statements of Operations during the nine months ended September 30, 2025. See Note 2, Business Acquisitions, to the Condensed Consolidated Financial Statements for additional information.

(m) Loss (gain) on inventory and other adjustments represents immaterial out-of-period adjustments for inventory and other items and was recorded within Cost of goods sold and SG&A in the Company’s Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2025.

(n) Debt modification and extinguishment costs includes the write-off of certain previously unamortized deferred financing costs as well as a portion of the third-party costs incurred to execute an amendment to the Company’s Credit Facility in April 2026. See Note 14, Debt, to the Condensed Consolidated Financial Statements for additional information.

(o) Impairment charges represents the non-cash charge taken to write down the remaining carrying value of goodwill in the EMEA reportable segment during the second quarter of 2025. See Note 13, Goodwill and Other Intangible Assets, to the Condensed Consolidated Financial Statements for additional information.

(p) Product liability claim reimbursement reflects insurance recoveries relating to a previous payment by the Company in connection with a product liability dispute with a customer. See Note 10, Other Expense, net, to the Condensed Consolidated Financial Statements for additional information.

(q) Duplicate headquarter lease costs represents operating lease expenses and variable lease costs associated with the new Radnor, Pennsylvania laboratory and Headquarters lease, a non-recurring event, during the transition period. These costs are incurred concurrently with the Company's existing Conshohocken, Pennsylvania laboratory and Headquarters lease. Once the Company’s old lease agreement expires during the first quarter of 2027, adjustments for the new headquarter lease costs will not be necessary. See Note 6, Leases, to the Condensed Consolidated Financial Statements for additional information.

(r) Depreciation and amortization for the three and nine months ended September 30, 2026 and 2025 each includes approximately $0.2 million and $0.7 million, respectively, of amortization expense recorded within equity in net income of associated companies in the Company’s Condensed Consolidated Statements of Operations. This is attributable to the amortization of the fair value purchase accounting step-up in connection with the acquisition of the Company’s 50% equity interest in Korea Houghton Corporation.

(s) Taxes on income before equity in net income of associated companies – adjusted presents the impact of any current and deferred income tax expense (benefit), as applicable, of the reconciling items presented in the reconciliation of net income attributable to Quaker Chemical Corporation to adjusted EBITDA and was determined utilizing the applicable rates in the taxing jurisdictions in which the adjustments occurred, subject to deductibility. This caption also includes the impact of specific tax charges and benefits for the three and nine months ended September 30, 2026 and 2025.

(t) Multiemployer plan withdrawal charge represents the expense related to the Company withdrawing from the Cleveland Bakers and Teamsters Pension Fund, a multiemployer defined benefit pension plan, in connection with a site closure under the Company’s restructuring program and facility closure actions. See Note 7, Restructuring and Related Activities, and Note 10, Other expense, net to the Condensed Consolidated Financial Statements for additional information.

(u) Brazilian non-income tax credits represents indirect tax credits and interest related to the Brazil Supreme Court ruling in regard to certain non-income (indirect) taxes that have been previously charged and paid. See Note 10, Other expense, net to the Condensed Consolidated Financial Statements for additional information.

(v) The Company calculates adjusted EBITDA margin, non-GAAP operating margin, and non-GAAP gross margin as the percentage of adjusted EBITDA, non-GAAP operating income, and non-GAAP gross profit to consolidated net sales.

(w) In each given period, the Company calculates non-GAAP earnings per diluted share as non-GAAP net income attributable to the Company per weighted average diluted shares outstanding using the “two-class share method”.

Off-Balance Sheet Arrangements

The Company’s off-balance sheet items outstanding as of September 30, 2026 include approximately $7 million of bank letters of credit and guarantees. The bank letters of credit and guarantees are not significant to the Company’s liquidity or capital resources.

Factors That May Affect Our Future Results

Certain information included in this Report and other materials filed or to be filed by us with the SEC, as well as information included in oral statements or other written statements made or to be made by us, contain or may contain forward-looking statements that fall under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended. These statements can be identified by the fact that they do not relate strictly to historical or current facts and can generally be identified by words such as “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “outlook,” “target,” “possible,” “potential,” “plan” or similar expressions, but these terms are not the exclusive means of identifying such statements. Such statements include information relating to current and future business activities, operational matters, capital spending, and financing sources. We have based these forward-looking statements on assumptions, projections and expectations about future events that we believe are reasonable based on currently available information, including statements regarding the potential effects of economic downturns, tariffs, including retaliatory tariffs, “trade wars” and uncertainty surrounding changes in tariffs, inflation, and global supply chain constraints on the Company’s business, results of operations, and financial condition; our expectation that we will maintain sufficient liquidity and remain in compliance with the terms of the Company’s credit facility; expectations about future demand and raw material costs; and statements regarding the impact of increased raw material costs and pricing initiatives.

These forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, intentions, financial condition, results of operations, future performance, and business, which may differ materially from expectations, estimates and projections of many factors, including, but not limited to:

• the timing and extent of the impacts on our business from acts of war, terrorism and military conflicts, including those in Ukraine and the Middle East, as well as related economic, political and governmental actions taken by various governments and governmental organizations in response;
• inflationary pressures, increases in raw material costs, supply chain constraints and other impacts of economic downturns, as well as high interest rates and their impact on our and our customers’ business operations;
• the potential timing, impacts, benefits and other uncertainties of acquisitions and divestitures, including our ability to finance any acquisition on commercially reasonable terms or to realize synergies, integrate acquisitions and acquired businesses or separate divested assets and businesses;
• broader macroeconomic factors, including potential for changes in global and regional economic conditions, the possibility of global or regional slowdowns or recessions, other macroeconomic stresses and uncertainties, including potential impacts related to the recent actions of the federal government and responses thereto, as well as other political and geopolitical events, civil disturbances and endemics/pandemics or extreme weather events and other natural disasters that may adversely affect regional economic conditions;
• U.S. political conditions and legislative and regulatory activity (or inactivity), including adoption of (or failure to adopt) new laws, regulations and executive orders, changes in existing laws, regulations and executive orders or the way they are interpreted or applied, and adoption of laws, regulations or executive orders that conflict among jurisdictions in which we operate; and
• our future results and plans including our sustainability goals and enterprise strategy.

A major risk is that demand for the Company’s products and services is largely derived from the demand for our customers’ products, which subjects the Company to uncertainties related to downturns in a customer’s business and unanticipated customer production slowdowns and shutdowns.

Other major risks and uncertainties include, but are not limited to, legislative and regulatory developments including changes to existing laws and regulations, or the way they are interpreted, applied or enforced; tariffs, trade restrictions and the economic and other sanctions imposed by other nations on Russia and Belarus and/or other governments or government organizations; suspensions of activities in Russia by many multinational companies; foreign currency fluctuations; significant changes in applicable tax rates and regulations and the potential impacts therefrom, including those arising from OBBB; the impacts of consolidation in our industry, including loss or consolidation of a major customer; the effects of climate change, fires or other natural disasters; and the potential occurrence of cyber-security breaches, cyber-security attacks, and other technology outages and security incidents. Furthermore, the Company is subject to the same business cycles as those experienced by our customers in the steel, automotive, aerospace, industrial equipment, aluminum, and durable goods industries.

Any or all of the forward-looking statements in this Report, in the Company’s 2025 Form 10-K and in any other public statements we make may prove to be incorrect due to inaccurate assumptions or unforeseen risks and uncertainties. In addition to the factors above, our forward-looking statements are qualified with respect to the risks disclosed elsewhere in this Report, including Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations. These risks, uncertainties, and possible inaccurate assumptions relevant to our business could materially impact our future performance and cause our actual results to differ materially from expected and historical results. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. However, additional disclosures on related subjects can be found in the Company’s subsequent reports on Forms 10-K, 10-Q, 8-K and other related filings. We caution you not to place undue reliance on our forward-looking statements.

Quaker Houghton on the Internet

Financial results, news and other information about Quaker Houghton can be accessed from the Company’s website at https://www.quakerhoughton.com. This site includes important information on the Company’s locations, products and services, financial reports, news releases and career opportunities. The Company’s periodic and current reports on Forms 10-K, 10-Q, 8-K, and other filings, including exhibits and supplemental schedules filed therewith, and amendments to those reports, filed with the SEC are available on the Company’s website, free of charge, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. Information contained on, or that may be accessed through, the Company’s website is not incorporated by reference in this Report and, accordingly, you should not consider that information part of this Report.

We have evaluated the information required under this Item that was disclosed in Part II, Item 7A, of our Annual Report on Form 10-K for the year ended December 31, 2025, and we believe there has been no material change to that information, except the interest rate risk noted below:

Interest Rate Risk

As of September 30, 2026, borrowings under the Company’s Credit Facility bear interest at either term SOFR or a base rate, in each case, plus an applicable margin based upon the Company’s consolidated net leverage ratio, and, in the case of term SOFR, a spread adjustment equal to 0.10% per annum. As a result of the variable interest rates applicable under the Credit Facility, if interest rates rise significantly, the cost of debt to the Company will increase. This may have an adverse effect on the Company, depending on the extent of the Company’s borrowings outstanding throughout a given year.

In October 2026, the Company entered into the Fifth Amendment to the Credit Agreement (the “Term Loan B Amendment”), which established a new, $550.0 million seven-year term loan B facility (the “Term Loan B Facility”). Borrowings under the Term Loan B Facility bear interest at either Term SOFR plus 1.750% per annum or a base rate plus 0.750% per annum. Term SOFR is reset at the beginning of each Interest Period selected by the Company, so borrowings under the Term Loan B Facility remain subject to changes in market interest rates. Unlike other borrowings under the Credit Facility, however, the applicable margin under the Term Loan B Facility is fixed and is not dependent on the Company's Consolidated Net Leverage Ratio. As a result, the Company will not benefit from reductions in the applicable margin if its Consolidated Net Leverage Ratio declines. Additionally, if interest rates rise significantly, the Company’s cost of borrowing under the Term Loan B Facility will increase, which may have an adverse effect on the Company, depending on the extent of the Company’s borrowings outstanding throughout a given year.

From 2023 until the first quarter of 2026, the Company had interest rate swaps in place to convert a portion of the Company's variable rate borrowings under the Credit Facility to a fixed rate exposure. In March 2026, these interest rate swap contracts expired. In April 2026, the Company further amended its Credit Facility. In April 2026, the Company entered into $400.0 million notional amounts of four-year interest rate swaps, converting a portion of the Company’s variable rate borrowings into an average fixed rate of 3.58% plus the applicable margin.

As of September 30, 2026, and December 31, 2025, the Company had outstanding borrowings under the Credit Facility of approximately $883.3 million and $859.7 million, respectively. The interest rate applicable on outstanding borrowings under the Credit Facility was approximately 4.6% and 4.7% as of September 30, 2026, and December 31, 2025, respectively. An interest rate change of 100 basis points would have resulted in an approximate $6.6 million and $8.6 million increase or decrease to interest expense for the nine months ended September 30, 2026, and year ended December 31, 2025, respectively.

Evaluation of disclosure controls and procedures. As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, including our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Report. Based on that evaluation, our principal executive officer and our principal financial officer have concluded that, as of September 30, 2026, the end of the period covered by this Report, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective.

Changes in internal control over financial reporting. As required by Rule 13a-15(d) under the Exchange Act, our management, including our principal executive officer and principal financial officer, has evaluated our internal control over financial reporting to determine whether any changes to our internal control over financial reporting occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there were no changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarter ended September 30, 2026.

PART II.

OTHER INFORMATION

Items 3 and 4 of Part II are inapplicable and have been omitted.

The Company’s business, financial condition, results of operations and cash flows are subject to various risks that could cause actual results to vary materially from recent results or from anticipated future results. In addition to the other information set forth in this Report, you should carefully consider the risk factors previously disclosed in Part I, Item 1A of the Company’s 2025 Form 10-K. There have been no material changes to the risk factors described therein other than as follows. However, the primary and secondary impacts of recent government actions including tariffs and trade policies, have impacted the global economy, disrupted global supply chains, created significant uncertainty and volatility in financial markets, and increased the risk of recession and elevated unemployment levels, and those conditions could continue or worsen. Accordingly, these actions and their impact on, among other things, the macroeconomic environment and regulatory policies could exacerbate the other risks and uncertainties set forth in “Item 1A. Risk Factors” in our 2025 10-K and could negatively impact our businesses and financial results.

Geopolitical instability, ongoing military conflicts involving Iran and other potential global events could materially and adversely affect our business, operations, and financial results.

Military conflict in the Middle East involving Iran has escalated in recent periods. This may result in extended or expanded military conflict, including to other countries, acts of terrorism, or other forms of regional instability. Such events could have a number of adverse impacts on our business, including but not limited to:

• Disruption of Supply Chains: Events unfolding in the Middle East have disrupted critical shipping routes (such as the Strait of Hormuz), delayed the delivery of raw materials and finished goods, and increased transportation and logistics costs. These may further increase our materials costs or make it difficult or impossible to obtain necessary raw materials.
• Energy Price Volatility: Iran and its neighbors are significant oil producers, and conflict in the region has led to sharp increases and volatility in global energy prices, which may be prolonged and which may increase our operating costs and impact customer demand.
• Sanctions and Regulatory Risks: The imposition of new or expanded U.S., EU, or UN sanctions in response to hostilities could restrict our ability to conduct business with certain customers, suppliers, or financial institutions, and may require us to incur significant costs to ensure compliance or to unwind existing relationships.
• Cybersecurity Threats: Heightened geopolitical tensions may increase the risk of cyberattacks or other malicious activities targeting our information systems, potentially resulting in data breaches, business interruption, or reputational harm.
• Insurance and Financial Market Impacts: War or ongoing instability may result in higher insurance premiums, reduced availability of coverage for war-related losses, and increased volatility in global financial markets, which could adversely affect our liquidity and access to capital.

The occurrence of any of these events, or other unforeseen consequences of conflict involving Iran and/or the Middle East, could materially and adversely affect our business, financial condition, results of operations, and cash flows. We cannot predict the duration or scope of any such conflict, nor the extent to which it may impact our business or the global economy.