WILMINGTON, DE — Ashland Inc. (NYSE: ASH) reported financial results for the fourth quarter and full fiscal year ended September 30, 2025, while providing guidance for fiscal 2026. The global additives and specialty ingredients company, which serves the pharmaceuticals, personal care, and architectural coatings markets, emphasized disciplined execution and continued progress on its strategic priorities amid a challenging environment.
Fourth Quarter and Full-Year Performance
Fourth-quarter sales were $478 million, down 8% from $522 million in the prior-year quarter. Ashland attributed approximately $38 million, or seven percent, of the decline to portfolio optimization initiatives, which included the divestiture or curtailment of certain lower-margin businesses such as carboxymethylcellulose, methylcellulose, Nutraceuticals, and Avoca. Excluding those changes, sales declined just one percent.
Income from continuing operations totaled $33 million, or $0.73 per diluted share, compared to $19 million, or $0.39 per share, last year. Adjusted income from continuing operations excluding intangibles amortization expense was $50 million, or $1.08 per diluted share. Net income was $32 million, or $0.71 per diluted share. Adjusted EBITDA reached $119 million, down four percent from $124 million in the prior-year quarter. Excluding the impact of portfolio actions, adjusted EBITDA increased five percent.
Cash flow from operations was $40 million, with ongoing free cash flow of $52 million. Ashland also received a $103 million tax refund in October related to the capital loss carryback from the Nutraceuticals divestiture.
“Ashland’s fourth-quarter performance reflects our disciplined approach and ability to deliver results in line with expectations, even as market conditions remained challenging,” said Guillermo Novo, chair and chief executive officer of Ashland. “We maintained strong margins and delivered revenue and EBITDA consistent with prior guidance. Our continued focus on execution helped offset pockets of competitive pressure and muted demand.”
Novo added, “Life Sciences sustained momentum in pharma, driven by innovation and healthy demand for high-value excipients, injectables, and tablet coatings. Personal Care delivered strong growth and benefited from recent strategic investments, with robust performance across end markets and regions. For Specialty Additives, sequential coatings stability across regions continued to reflect portfolio strength and disciplined execution. Demand remained soft in China and North America, contributing to a year-over-year decline, with elevated competitive intensity in MEAI. Our ongoing network rebalancing helped sustain margins despite these headwinds. Intermediates continued to manage through trough-like conditions with commercial and operational discipline.”
“These results underscore Ashland’s commitment to executing on its strategic priorities during dynamic market conditions,” Novo continued. “On a comparable basis, the team delivered Adjusted EBITDA growth in all business units except Intermediates, while continuing to navigate a challenging environment. Our emphasis on cost management, portfolio alignment, and operational productivity continues to position us for outsized profit growth as markets improve. Ashland closed the year with solid momentum, exceeding innovation targets, and delivering strong growth across our globalized segments. Our fourth-quarter performance reinforces the strength of our business model and the resilience of our portfolio.”
Segment Results
Life Sciences segment sales totaled $173 million, down 10% year-over-year. Portfolio Optimization initiatives accounted for $15 million of that reduction. Adjusted EBITDA was $55 million, representing a 32% margin, down slightly from $56 million last year. Excluding optimization impacts, adjusted EBITDA increased $2 million. Ashland cited continued strength in pharmaceuticals and robust demand for high-value excipients and coatings.
Personal Care sales were $151 million, down 7% compared to last year’s $162 million. Adjusted EBITDA was $43 million, compared to $47 million last year, with the 28.5% margin remaining strong. The company said sales growth was broad-based across skin, hair, oral, biofunctional actives, and microbial protection, with double-digit growth in its globalized business lines.
Specialty Additives generated $131 million in sales, down nine percent year-over-year, reflecting softer demand in China and North America and competitive intensity in export markets. Adjusted EBITDA remained steady at $29 million, up $3 million sequentially. Novo said the segment maintained margins through disciplined execution and improved product mix despite weak coatings markets.
Intermediates posted $33 million in sales, down eight percent from the prior year. Adjusted EBITDA declined to $5 million from $10 million due to lower pricing and production volumes.
Fiscal 2025 Results Summary
For the full year, Ashland reported $1.824 billion in sales, down 14% from fiscal 2024. Portfolio Optimization initiatives accounted for $208 million of that decline. Adjusted EBITDA was $401 million, compared to $459 million last year, while adjusted EBITDA margin improved to 22%.
Net loss for fiscal 2025 was $845 million, primarily due to non-cash impairments of goodwill and losses related to the Avoca sale. Adjusted income from continuing operations excluding intangibles amortization expense was $157 million, down from $224 million the prior year.
Cash flow from operations totaled $134 million, compared to $462 million in 2024, reflecting higher working capital and lower earnings. Ongoing free cash flow was $127 million, down from $270 million last year.
Outlook for Fiscal 2026
Ashland issued guidance for fiscal 2026, forecasting sales between $1.835 billion and $1.905 billion, representing organic growth of one to five percent. Adjusted EBITDA is projected between $400 million and $430 million, with adjusted diluted earnings per share (excluding intangibles amortization) expected to deliver double-digit growth.
The company anticipates ongoing free cash flow conversion of about 50% of adjusted EBITDA, with approximately $100 million in capital expenditures. Ashland’s guidance assumes continued resilience in Life Sciences and Personal Care, while coatings and intermediates markets remain subdued.
“Our teams executed well in a challenging environment and remained aligned to our strategy throughout fiscal 2025,” said Novo. “Our fiscal 2026 guidance reflects a prudent view of current market conditions, including the previously shared shift in timing for benefits from our manufacturing optimization program. While operational actions are largely complete, financial delivery will be more weighted to future periods. Importantly, our planning scenarios reflect a return to growth, signaling a constructive shift in trajectory and renewed momentum across our businesses. We remain focused on advancing innovation, scaling our globalize platforms, and driving cost and productivity initiatives that support margin strength. With consistent execution, mix improvement, and disciplined capital allocation, Ashland is well-positioned to deliver resilient performance and long-term value creation.”
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