Item 1. FINANCIAL STATEMENTS

Qnity Electronics, Inc.

Consolidated Statements of Operations (Unaudited)

			Three Months Ended March 31,
In millions, except per share amounts			2026			2025
Net sales			$	1,315		$	1,118
Cost of sales			697			587
Research and development expenses			94			84
Selling, general and administrative expenses			173			140
Amortization of intangibles			52			55
Transformation, integration and other charges (Note 4)			28			17
Equity in earnings of nonconsolidated affiliates			13			9
Interest expense			61			—
Other income (expense) - net			(5)			2
Income before income taxes			$	218		$	246
Provision for income taxes			56			47
Net income			$	162		$	199
Net income attributable to noncontrolling interests			11			6
Net income available for Qnity common stockholders			$	151		$	193
Per common share data:
Earnings per common share - basic			$	0.72		$	0.92
Earnings per common share - diluted			$	0.72		$	0.92
Weighted-average common shares outstanding - basic			209.7			209.4
Weighted-average common shares outstanding - diluted			210.3			209.4

See Notes to the Consolidated Financial Statements.

Qnity Electronics, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

			Three Months Ended March 31,
In millions			2026			2025
Net income			$	162		$	199
Other comprehensive (loss) income, net of tax
Cumulative translation adjustments			(52)			56
Pension benefit plans			(1)			(2)
Total other comprehensive (loss) income			$	(53)		$	54
Comprehensive income			$	109		$	253
Comprehensive income attributable to noncontrolling interests, net of tax			9			9
Comprehensive income attributable to Qnity			$	100		$	244

See Notes to the Consolidated Financial Statements.

Qnity Electronics, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

In millions			March 31, 2026			December 31, 2025
Assets
Current Assets
Cash and cash equivalents			$	857		$	915
Accounts and notes receivable - net			1,039			992
Inventories - net			696			661
Prepaid and other current assets			90			70
Total current assets			$	2,682		$	2,638
Property, plant and equipment - net of accumulated depreciation (March 31, 2026 - 1,478; December 31, 2025 - 1,450)			1,692			1,701
Other Assets
Goodwill			7,514			7,522
Other intangible assets			1,061			1,111
Investments and noncurrent receivables			417			402
Deferred income tax assets			40			42
Deferred charges and other assets			657			654
Total other assets			$	9,689		$	9,731
Total Assets			$	14,063		$	14,070
Liabilities and Equity
Current Liabilities
Short-term borrowings			$	23		$	24
Accounts payable			699			680
Income taxes payable			162			150
Accrued and other current liabilities			379			502
Total current liabilities			$	1,263		$	1,356
Long-Term Debt			4,000			4,003
Other Noncurrent Liabilities
Deferred income tax liabilities			259			273
Pensions and other post-employment benefits - noncurrent			80			80
Other noncurrent obligations			1,000			992
Total other noncurrent liabilities			$	1,339		$	1,345
Total Liabilities			$	6,602		$	6,704
Commitments and contingent liabilities (Note 13)
Stockholders' Equity
Common stock (authorized 1,666,666,667 shares of $0.01 par value each; issued 2026: 209,440,670 shares; 2025: 209,479,173 shares)			2			2
Preferred stock (authorized 1 share of $1.50 million par value each; issued 2026: 1 share; 2025: 1 share			2			2
Additional paid-in capital			7,276			7,286
Retained earnings			170			18
Accumulated other comprehensive loss			(264)			(213)
Total Qnity equity			$	7,186		$	7,095
Noncontrolling interests			275			271
Total equity			$	7,461		$	7,366
Total Liabilities and Equity			$	14,063		$	14,070

See Notes to the Consolidated Financial Statements.

Qnity Electronics, Inc.

Consolidated Statements of Cash Flows (Unaudited)

			Three Months Ended March 31,
In millions			2026			2025
Operating Activities
Net income			$	162		$	199
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment			46			39
Amortization of definite-lived intangible assets			52			55
Stock-based compensation			10			4
Credit for deferred income tax and other tax related items			(1)			(9)
Restructuring and asset related charges - net			(1)			17
Net periodic pension benefit cost			1			1
Periodic benefit plan contributions			(1)			(1)
Earnings of nonconsolidated affiliates less dividends received			(13)			(9)
Other net loss			9			—
Changes in assets and liabilities:
Accounts and notes receivable			(51)			(4)
Inventories			(42)			(35)
Other assets			(11)			1
Accounts payable			72			41
Accrued and other current liabilities			(120)			(67)
Other noncurrent liabilities			15			3
Income tax liabilities			8			(28)
Cash provided by operating activities			$	135		$	207
Investing Activities
Capital expenditures			(122)			(104)
Other investing activities, net			(1)			—
Cash used for investing activities			$	(123)		$	(104)
Financing Activities
Repayments on long-term debt			(6)			—
Repurchases of common stock			(25)			—
Employee taxes paid for share-based payment arrangements			(5)			—
Distributions to noncontrolling interests			(6)			(5)
Dividends paid to stockholders			(17)			—
Net transfers to Parent			—			(104)
Cash used for financing activities			$	(59)		$	(109)
Effect of exchange rate changes on cash and cash equivalents			(11)			2
Decrease in cash and cash equivalents			$	(58)		$	(4)
Cash and cash equivalents at beginning of period			$	915		$	166
Cash and cash equivalents at end of period			$	857		$	162

See Notes to the Consolidated Financial Statements.

Qnity Electronics, Inc.

Consolidated Statements of Changes in Equity (Unaudited)

For the three months ended March 31, 2026 and 2025

In millions			Common Stock			Preferred Stock			Additional Paid-in Capital			Retained Earnings			Parent Company Net Investment			Accumulated Other Comp (Loss) Income			Non-controlling Interests			Total Equity
Balance at December 31, 2024			$	—		$	—		$	—		$	—		$	11,058		$	(414)		$	252		$	10,896
Net income			—			—			—			—			193			—			6			199
Other comprehensive income			—			—			—			—			—			51			3			54
Distributions to noncontrolling interests			—			—			—			—			—			—			(5)			(5)
Net transfers to Parent			—			—			—			—			(105)			—			—			(105)
Balance at March 31, 2025			$	—		$	—		$	—		$	—		$	11,146		$	(363)		$	256		$	11,039
Balance at December 31, 2025			$	2		$	2		$	7,286		$	18		$	—		$	(213)		$	271		$	7,366
Net income			—			—			—			151			—			—			11			162
Other comprehensive loss			—			—			—			—			—			(51)			(2)			(53)
Stock-based compensation			—			—			5			—			—			—			—			5
Distributions to noncontrolling interests			—			—			—			—			—			—			(6)			(6)
Common stock repurchased			—			—			(25)			—			—			—			—			(25)
Separation-related adjustments			—			—			10			—			—			—			—			10
Other			—			—			—			1			—			—			1			2
Balance at March 31, 2026			$	2		$	2		$	7,276		$	170		$	—		$	(264)		$	275		$	7,461

See Notes to the Consolidated Financial Statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Table of Contents

Note						Page
1			Basis of Presentation			12
2			Recent Accounting Guidance			12
3			Revenue			13
4			Transformation, Integration and Other Charges			14
5			Relationship with DuPont			15
6			Supplementary Information			16
7			Income Taxes			17
8			Earnings Per Share Calculations			17
9			Inventories - net			18
10			Nonconsolidated Affiliates			18
11			Goodwill and Other Intangible Assets			19
12			Long-Term Debt			20
13			Commitments and Contingent Liabilities			20
14			Stockholders' Equity			21
15			Pension Plans			22
16			Stock-Based Compensation			22
17			Financial Instruments			22
18			Fair Value Measurements			23
19			Segment Information			24

NOTE 1 - BASIS OF PRESENTATION

Organization and Description of Business

Qnity Electronics, Inc. ("Qnity" or the "Company") is one of the largest global leaders in materials and solutions for the semiconductor and electronics industries. The Company empowers its customers’ technology roadmaps to enable advancements in megatrends such as artificial intelligence, high-performance computing and advanced connectivity. Qnity partners with leading semiconductor and advanced device manufacturers to address complex challenges and develop solutions that facilitate next-generation technological innovations.

Prior to November 1, 2025, the Company was wholly owned by DuPont de Nemours, Inc. (“DuPont” or "Parent"). On November 1, 2025 (the "Separation and Distribution Date"), Qnity was separated from DuPont into an independent publicly traded company (the "Separation") through a pro-rata distribution of one share of Qnity common stock for every two shares of DuPont common stock held at the close of business on the record date of October 22, 2025 (the "Distribution"). As a result of the Distribution, as of the Separation and Distribution Date, Qnity became an independent, publicly traded company, and Qnity common stock commenced trading on the New York Stock Exchange under the symbol "Q" at the start of trading on November 3, 2025.

Basis of Presentation

Prior to the Separation on November 1, 2025, Qnity had operated as a part of DuPont; consequently, stand-alone interim financial statements were not historically prepared for Qnity. For the period subsequent to November 1, 2025, the financial statements are presented on a consolidated basis as the Company became a standalone public company. In the opinion of management, the accompanying unaudited interim Consolidated Financial Statements reflect all adjustments (including normal recurring adjustments) which are considered necessary for the fair statement of the results for the periods presented. The unaudited interim Consolidated Financial Statements include the accounts of the Company and all of its subsidiaries in which a controlling interest is maintained. Results from interim periods should not be considered indicative of results for the full year. These unaudited interim Consolidated Financial Statements should also be read in conjunction with the audited annual Consolidated Financial Statements and notes thereto for the year ended December 31, 2025, collectively referred to as the “2025 Annual Financial Statements” as contained in the Company’s Annual Report on Form 10-K (the "Annual Report") filed on February 26, 2026 with the U.S. Securities and Exchange Commission (“SEC”) pursuant to the Securities Exchange Act of 1934, as amended.

Beginning in fiscal 2026, the Company presents costs incurred in connection with a multi‑year transformation plan, designed to strengthen operational productivity, enhance commercial and innovation excellence, and optimize the Company’s presence in key markets, within a single operating expense line titled “Transformation, integration and other charges” in the Consolidated Statements of Operations. The transformation plan does not represent a company‑wide restructuring event; rather, it consists of a series of discrete initiatives, including IT independence and other separation‑related activities, integration efforts, and productivity programs.

Consistent with the update above, we combined our historical “Restructuring and other asset related charges” and “Acquisition, integration and separation costs” into the expense caption, “Transformation, integration and other charges” to simplify our presentation and better reflect how management evaluates these activities. Prior period amounts presented in this Quarterly Report on Form 10-Q have been recast to conform to the current period presentation. This change in presentation did not affect total operating expenses, operating income, net income, earnings per share, or cash flows for any period presented.

NOTE 2 - RECENT ACCOUNTING GUIDANCE

Recently Adopted Accounting Guidance

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09") to improve transparency and disclosure requirements for the rate reconciliation, income taxes paid and other tax disclosures. The amendments in ASU 2023-09 are effective for annual fiscal years beginning after December 15, 2024, on a prospective basis. The disclosures were implemented as required for the year-ended December 31, 2025 in the Company's Annual Report.

In December 2025, the FASB issued Accounting Standards Update No. 2025-12, "Codification Improvements", which addresses stakeholders' feedback on the Accounting Standards Codification and makes other incremental improvements to generally accepted accounting principles. Specifically, Issue 10 of ASU 2025-12 added a clarification within ASC 505-30 to provide a policy election to permit the excess of repurchase price over par value in a stock repurchase transaction to be accounted for entirely as a reduction in additional paid-in capital when the repurchased shares are retired. The Company adopted Issue 10 of ASU 2025-12 during the quarter ended March 31, 2026.

Accounting Guidance Issued But Not Adopted at March 31, 2026

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, "Income Statement: Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures" ("ASU 2024-03") to improve disclosures about the nature of expenses within line items on the statements of operations. The amendments in ASU 2024-03 are effective for the Company's 2027 annual report and subsequent interim periods; however, early adoption is permitted. The amendments can be applied prospectively or retrospectively to all periods presented. The Company is currently evaluating the impact of adopting this guidance.

In September 2025, the FASB issued Accounting Standards Update No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”) to modernize the accounting for internal-use software costs and improve operability of the guidance across different software development project stages. The amendments in ASU 2025-06 are effective for the Company’s 2028 annual and quarterly reports; however, early adoption is permitted. The amendments can be applied prospectively, retrospectively, or using a modified transition approach. The Company is currently evaluating the impact of adopting this guidance.

NOTE 3 - REVENUE

Revenue Recognition

Products

Substantially all of Qnity’s revenue is derived from product sales. Product sales consist of sales of Qnity’s products to supply manufacturers and distributors. Qnity considers purchase orders, which in some cases are governed by master supply agreements, to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year.

Net sales to Samsung Electronics Co., Ltd accounted for 11% and 10% of total net sales for each of the three months ended March 31, 2026 and 2025, respectively. Additionally, net sales to Taiwan Semiconductor Manufacturing Company Limited (TSMC) accounted for 8% of total net sales for the three months ended March 31, 2026 and 2025. The majority of revenues for both customers relate to the Semiconductor Technologies segment.

Disaggregation of Revenue

The Company disaggregates its revenue from contracts with customers by segment and geographic region, as the Company believes it best depicts the nature, amount, timing and uncertainty of its revenue and cash flows.

Net Sales by Segment			Three Months Ended March 31,
In millions			2026			2025
Semiconductor Technologies			$	722		$	644
Interconnect Solutions			593			474
Total			$	1,315		$	1,118

Net Sales by Segment by Geographic Region			Three Months Ended March 31,
2026									2025
Semiconductor Technologies			Interconnect Solutions			Total			Semiconductor Technologies			Interconnect Solutions			Total
In millions
Americas:			$	78		$	93		$	171		$	66		$	78		$	144
United States			77			84			161			65			71			136
Other Americas 1			1			9			10			1			7			8
EMEA 2			51			51			102			49			43			92
Asia Pacific:			593			449			1,042			529			353			882
China			205			230			435			205			191			396
Rest of Asia Pacific:			388			219			607			324			162			486
South Korea			164			30			194			140			23			163
Taiwan			151			53			204			121			36			157
Other			73			136			209			63			103			166
Total			$	722		$	593		$	1,315		$	644		$	474		$	1,118

1.Includes Canada and Latin America.

2.Europe, Middle East and Africa.

Contract Balances

From time to time, the Company enters into arrangements in which it receives payments from customers based upon contractual billing schedules. The Company records accounts receivables when the right to consideration becomes unconditional. Contract liabilities primarily reflect deferred revenue from advance payment for product that the Company has received from customers. The Company classifies deferred revenue as current or noncurrent based on the timing of when the Company expects to recognize revenue.

Revenue recognized from amounts included in contract liabilities at the beginning of the period were insignificant for the three months ended March 31, 2026 and 2025. The Company did not recognize any asset impairment charges related to contract assets during the periods. The Company will begin recognizing its deferred revenue when the project associated with the revenue that was deferred is completed and commercial production begins, currently expected in 2027.

Contract Balances			March 31, 2026			December 31, 2025
In millions
Accounts receivable - trade 1			$	702		$	656
Deferred revenue - current 2			$	2		$	1
Deferred revenue - noncurrent 3			$	46		$	46

1.Included in "Accounts and notes receivable - net" in the interim Condensed Consolidated Balance Sheets.

2.Included in "Accrued and other current liabilities" in the interim Condensed Consolidated Balance Sheets.

3.Included in "Other noncurrent obligations" in the interim Condensed Consolidated Balance Sheets.

NOTE 4 - TRANSFORMATION, INTEGRATION AND OTHER CHARGES

In February 2026, Qnity launched a multi‑year transformation plan, designed to strengthen operational productivity, enhance commercial and innovation excellence and optimize the Company’s 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.

As further discussed in Note 1, beginning in the first quarter of 2026, the Company combined its historical “Restructuring and asset‑related charges – net” financial‑statement line item with its historical “Acquisition, integration and separation costs” into a single operating expense caption titled “Transformation, integration and other charges.” This change represents a presentation change only, and does not represent a change in accounting principle. Consistent with SEC interim reporting requirements, prior‑period amounts presented herein have been recast to conform to the current‑period presentation. Although restructuring is no longer presented as a separate financial‑statement line item, the Company continues to monitor these charges as a discrete component of the new combined operating expense caption.

The following table represents reclassification of prior-period amounts to Transformation, integration and other charges:

Reclassification of Prior-Period Amounts			Three Months Ended March 31, 2025
In millions
Restructuring and asset related charges – net			$	17
Acquisition, integration and separation costs			—
Transformation, integration and other charges (recast)			$	17

The following table presents the components of Transformation, integration and other charges by major cost category. Amounts include costs recognized under ASC 420 (exit and disposal activities), ASC 712 (compensation – nonretirement postemployment benefits), ASC 360 (asset impairments), and other transformation and integration costs.

Transformation, Integration and Other Charges by Cost Category			Three Months Ended March 31,
In millions			2026			2025
Pre-Separation restructuring programs****1
Severance			$	(1)		$	17
Asset related charges			—			—
Total Pre-Separation restructuring programs			$	(1)		$	17
Qnity Transformation Plan
IT independence 2			$	24		$	—
Integration and other 2			3			—
Transformation initiative charges2			2			—
Total Qnity Transformation Plan			$	29		$	—
Total transformation, integration and other charges (recast)			$	28		$	17

1. This activity represents charges and credits related to DuPont-approved restructuring programs initiated prior to the Separation.

2. Charges primarily consist of external advisory services, professional fees, program management costs, internal program labor, and other operating expenses that are incremental and directly attributable to the Company’s transformation and separation activities. Internal program labor represents payroll costs for employees predominantly dedicated to the transformation and separation initiatives and reflects costs that are incremental to the Company’s normal operating activities.

There were no actions by the Company resulting in new exit or disposal cost obligations during the three months ended March 31, 2026.

Exit and disposal operations were a credit of $1 million and charges of $17 million for the three months ended March 31, 2026 and 2025, respectively. The entirety of these charges related to DuPont-approved restructuring programs that were initiated prior to the Separation. The total liability related to these programs was $3 million as of March 31, 2026, recorded in "Accrued and other current liabilities" in the interim Condensed Consolidated Balance Sheets.

Refer to Note 19 for the disaggregation of Transformation, integration and other charges incurred by segment. The Company expects the majority of the remaining cash outflows of the program to be incurred in the next two years.

NOTE 5 - RELATIONSHIP WITH DUPONT

Prior to the Separation, Qnity had been managed and operated in the normal course with other businesses of DuPont. Accordingly, certain shared costs had been allocated to Qnity and reflected as expenses in the stand-alone Consolidated Financial Statements. Management considers the allocation methodologies used to be reasonable and appropriate reflections of the pre-Separation expenses attributable to Qnity for purposes of the stand-alone financial statements. The expenses reflected in the Consolidated Financial Statements may not be indicative of expenses that will be incurred by Qnity in the future. All transactions with DuPont prior to the Separation approximate prices at cost.

Corporate Expense Allocations

Qnity’s Consolidated Statements of Operations for periods prior to the Separation included general corporate expenses of DuPont for services provided by DuPont for certain support functions that were provided on a centralized basis prior to the Separation. These costs were allocated using relevant allocation methods, primarily based on sales metrics.

Corporate expense allocations during the three months ended March 31, 2025 were recorded in the unaudited interim Consolidated Statements of Operations within the following captions:

In millions			Three months ended March 31, 2025
Selling, general and administrative expenses			$	53
Cost of sales			8
Research and development expenses			10
Transformation, integration and other charges1			11
Total corporate expense allocations			$	82

1. Refer to Note 4 for additional information.

Parent Company Equity

Net transfers to Parent are included within Parent company net investment on the unaudited interim Consolidated Statements of Changes in Equity. The components of the net transfers to Parent are as follows:

In millions			Three Months Ended March 31, 2025
Cash pooling and general financing activities			$	33
Less: Corporate cost allocations			82
Less: Taxes deemed settled with Parent			56
Total net transfers to Parent per unaudited interim Consolidated Statements of Changes in Equity			$	(105)
Stock-based compensation and other noncash transfers (to) from Parent			1
Net transfers to Parent per unaudited interim Consolidated Statements of Cash Flows			$	(104)

NOTE 6 - SUPPLEMENTARY INFORMATION

Other Income (Expense) - Net			Three Months Ended March 31,
In millions			2026			2025
Non-operating pension credits			$	1		$	—
Interest income			3			2
Foreign exchange (losses) gains - net			(7)			—
Indirect legacy (costs) benefits - net			(3)			—
Miscellaneous income (expense) - net			1			—
Other (expense) income - net			$	(5)		$	2

Accrued and Other Current Liabilities

In millions			March 31, 2026			December 31, 2025
Accrued payroll			$	105		$	162
Current indemnification liabilities1			168			183
Other 2			106			157
Total accrued and other current liabilities			$	379		$	502

1. Related to current portion of indemnification liabilities, primarily to DuPont. For additional information on these matters, refer to Note 5.

2. No other component of “Accrued and other current liabilities” was more than 5% of total current liabilities at March 31, 2026 and December 31, 2025.

Operating Leases

Supplemental balance sheet information related to leases was as follows:

In millions			March 31, 2026			December 31, 2025
Operating Leases
Operating lease right-of-use assets 1			$	502		$	493
Current operating lease liabilities 2			44			43
Noncurrent operating lease liabilities 3			466			455
Total operating lease liabilities			$	510		$	498

1.Included in "Deferred charges and other assets" in the interim Condensed Consolidated Balance Sheets.

2.Included in "Accrued and other current liabilities" in the interim Condensed Consolidated Balance Sheets.

3.Included in "Other noncurrent obligations" in the interim Condensed Consolidated Balance Sheets.

NOTE 7 - INCOME TAXES

During the periods presented in the unaudited interim Consolidated Financial Statements prior to the Separation, Qnity did not file separate tax returns in the U.S. for federal, certain state and local tax purposes, nor in foreign tax jurisdictions, as Qnity was included in the tax grouping of DuPont and its affiliate entities within the respective jurisdictions. The provision for income taxes included in these unaudited interim Consolidated Financial Statements has been calculated using the separate return basis, as if Qnity filed separate tax returns. The Company will file a separate tax return in these jurisdictions for the period ended March 31, 2026.

Each year, the Company files hundreds of tax returns in the various national, state, and local income taxing jurisdictions in which it operates. These tax returns are subject to examination and possible challenge by the tax authorities. The Company has ongoing federal, state, and international income tax audits in various jurisdictions and evaluates uncertain tax positions that may be challenged by local tax authorities. As a result, there is an uncertainty in income taxes recognized in the Company’s financial statements in accordance with accounting for income taxes and accounting for uncertainty in income taxes. The ultimate resolution of such uncertainties is not expected to have a material impact on the Company's interim results of operations.

The Company's effective tax rate fluctuates based on, among other factors, where income is earned and the level of income relative to attributes. The tax provision for the three months ended March 31, 2026 resulted in an effective tax rate on operations of 25.7% on pre-tax income of $218 million, compared with an effective tax rate of 19.1%, on pre-tax income of $246 million for the three months ended March 31, 2025. The increase in effective tax rate in 2026 relates to a limitation on the deductibility of interest expense and higher tax costs on the remittance of foreign earnings, partially offset by a reduction in foreign tax costs.

On July 4, 2025, the One Big Beautiful Bill Act (“the Act”) was enacted. The Act includes a broad range of tax reform provisions, including modifications and enhancements to the domestic and international provisions of the Tax Cuts and Jobs Act. Among other changes, the Act allows for immediate expensing of domestic research and development expenditures, revises provisions around foreign-sourced earnings and revises the corporate interest limitation rules. The legislation has multiple effective dates, with certain provisions having become effective in fiscal 2025 and the majority becoming effective in fiscal 2026. The Company has considered the impact of the enacted provisions in its consolidated tax provision as of March 31, 2026. The legislation did not have a material impact on our income tax expense or effective tax rate for this quarter. The Company continues to evaluate the broader effects of the legislation as further guidance is issued.

NOTE 8 - EARNINGS PER SHARE CALCULATIONS

On the Separation and Distribution Date, approximately 209 million shares of the Company's common stock, par value $0.01 per share, were distributed to DuPont shareholders of record as of October 22, 2025. This share amount was utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the Separation as all common stock was owned by DuPont prior to the Separation. For all periods presented prior to the Separation, it is assumed that there are no dilutive equity instruments as there were no equity awards of Qnity outstanding prior to the Separation. Therefore, the calculation of basic and diluted earnings per share is the same. Subsequent to the Separation, actual basic and diluted share counts were utilized for the calculation.

Net Income for Earnings Per Share Calculations - Basic & Diluted			Three Months Ended March 31,
In millions, except per share amounts			2026			2025
Net income			$	162		$	199
Net income attributable to noncontrolling interests			11			6
Net income attributable to common stockholders			$	151		$	193
Earnings attributable to common stockholders - basic			$	0.72		$	0.92
Earnings attributable to common stockholders - diluted			$	0.72		$	0.92

Share Count Information			Three Months Ended March 31,
In millions, except per share amounts			2026			2025
Weighted-average shares of common stock - basic			209.7			209.4
Plus dilutive effect of equity compensation plans			0.6			—
Weighted-average shares of common stock - diluted			210.3			209.4
Stock options, restricted stock units, and performance-based restricted stock units excluded from EPS calculations			0.7			—

NOTE 9 - INVENTORIES - NET

In millions			March 31, 2026			December 31, 2025
Finished goods			$	302		$	292
Work in process			238			221
Raw materials			157			145
Supplies			27			27
Less: Inventory reserves			28			24
Total inventories - net			$	696		$	661

NOTE 10 - NONCONSOLIDATED AFFILIATES

Qnity’s investments in companies accounted for using the equity method (“nonconsolidated affiliates”) are recorded in “Investments and noncurrent receivables” in the interim Condensed Consolidated Balance Sheets. Investments in nonconsolidated affiliates were $399 million and $386 million at March 31, 2026 and December 31, 2025, respectively.

At March 31, 2026 and December 31, 2025, Qnity had a note payable to Hitachi Chem DuP Microsystems LLC, a nonconsolidated affiliate, (the “Related Party Note Payable”) of $63 million and $53 million, respectively. This Related Party Note Payable arises from an arrangement in which Qnity manages the daily domestic cash position resulting from the normal cash operations of Hitachi Chem DuP Microsystems LLC. Under this arrangement, both parties may loan funds to one another based on the cash position of Hitachi Chem DuP Microsystems LLC.

The Related Party Note Payable is short-term in nature and bears an interest rate equal to the average daily rate during the preceding month, plus any applicable commission and fee percentage payable to Qnity for its support of the cash management program. The balance of this Related Party Note Payable and the related interest payable is included within “Accounts Payable” in the interim Condensed Consolidated Balance Sheets.

Sales to nonconsolidated affiliates represented less than 1% of total net sales for each of the three months ended March 31, 2026 and 2025. Purchases from nonconsolidated affiliates represented less than 2% and 1% of "Cost of sales" for the three months ended March 31, 2026 and 2025, respectively. The Company maintained an ownership interest in three nonconsolidated affiliates at March 31, 2026.

NOTE 11 - GOODWILL AND OTHER INTANGIBLE ASSETS

The following table summarizes changes in the carrying amount of goodwill during the three months ended March 31, 2026.

In millions			Semiconductor Technologies			Interconnect Solutions						Total
Balance at December 31, 2025			$	4,542		$	2,980					$	7,522
Currency translation adjustment			(2)			(6)						(8)
Balance at March 31, 2026			$	4,540		$	2,974					$	7,514

Other Intangible Assets

The gross carrying amounts and accumulated amortization of other intangible assets with finite lives, by major class are as follows:

			March 31, 2026									December 31, 2025
In millions			Gross Carrying Amount			Accumulated Amortization			Net			Gross Carrying Amount			Accumulated Amortization			Net
Other intangible assets:
Developed technology			$	544		$	(363)		$	181		$	544		$	(349)		$	195
Trademarks/tradenames			55			(39)			16			55			(38)			17
Customer-related			2,122			(1,258)			864			2,125			(1,226)			899
Total other intangible assets			$	2,721		$	(1,660)		$	1,061		$	2,724		$	(1,613)		$	1,111

The following table provides the net carrying value of other intangible assets by segment:

Net Other Intangibles			March 31, 2026			December 31, 2025
In millions
Semiconductor Technologies			$	250		$	264
Interconnect Solutions			811			847
Total			$	1,061		$	1,111

Total estimated amortization expense for the remainder of 2026 and the five succeeding fiscal years is as follows:

Estimated Amortization Expense
In millions
Remainder of 2026			$	149
2027			$	169
2028			$	144
2029			$	109
2030			$	89
2031			$	89

NOTE 12 - SHORT-TERM BORROWINGS, LONG-TERM DEBT, AND AVAILABLE CREDIT FACILITIES

A summary of Qnity's short-term borrowings, long-term debt and available credit facilities can be found in Note 14 to the Consolidated Financial Statements included in the Company's Annual Report. If applicable, updates have been included in the respective section below.

Short-term Borrowings

Long-term debt due within one year was $23 million and $24 million at March 31, 2026 and December 31, 2025, respectively. These balances are presented net of current portion of unamortized debt issuance cost and are recorded in "Short-term borrowings" in the interim Condensed Consolidated Balance Sheets.

Long-Term Debt

Long-term debt at March 31, 2026 and December 31, 2025 was $4,000 million and $4,003 million, respectively. The estimated fair value of the Company's long-term borrowings was determined using Level 2 inputs within the fair value hierarchy. Based on quoted market prices for the same or similar issues, or on current rates offered to the Company for debt of the same remaining maturities, the fair value of the Company's long-term borrowings, including long-term debt due within one year, was $4,099 million and $4,154 million at March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026, the Company was in compliance with all applicable covenants included in the terms of its debt arrangements.

Committed Credit Facilities and Outstanding Letters of Credit

The Company's $1,250 million Senior Secured Revolving Facility matures October 2030. As of March 31, 2026, there were no drawings on the facility, and outstanding letters of credit under the facility were approximately $12 million.

Uncommitted Credit Facilities and Outstanding Letters of Credit

Unused bank credit lines on uncommitted credit facilities were approximately $134 million at March 31, 2026. These lines are available to support short-term liquidity needs and general corporate purposes including letters of credit. Outstanding letters of credit and credit lines under these uncommitted credit facilities were approximately $24 million at March 31, 2026. These letters of credit support commitments made in the ordinary course of business.

NOTE 13 - COMMITMENTS AND CONTINGENT LIABILITIES

Litigation Matters

In the normal course of business, the Company is involved from time to time in various arbitrations, lawsuits, claims and other actions with respect to patent infringement claims, employment claims, including alleged wage and hour violations, and commercial claims.

The Company accrues for such matters where losses are deemed probable and reasonably estimable. There are other matters involving the Company for which a loss is deemed remote or reasonably possible, and, as a result, associated accruals have not been established. It is reasonably possible that some of these matters could result in future payments or costs in excess of the amounts accrued at March 31, 2026, but such excess amounts cannot be reasonably estimated. It is the opinion of the Company’s management that the possibility is remote that the aggregate of all such claims and lawsuits will have a material adverse impact on the results of operations, financial condition and cash flows of the Company.

Certain Indemnification Obligations to DuPont

A summary of indemnification obligations to DuPont can be found in Note 15 to the Consolidated Financial Statements included in the Company's Annual Report. If applicable, updates have been included in the respective section below.

As of March 31, 2026, the Company maintains indemnification liabilities related to the legacy liabilities detailed above of $87 million within “Accrued and other current liabilities” and $109 million within “Other noncurrent obligations” within the Condensed Consolidated Balance Sheets. As of December 31, 2025, the Company maintained indemnification liabilities related to these legacy liabilities of $80 million within “Accrued and other current liabilities” and $110 million within “Other noncurrent obligations” within the Condensed Consolidated Balance Sheets. It is reasonably possible that the potential exposure of these indemnifications could range up to $84 million above the amount accrued at March 31, 2026. It is also possible that the Company could incur additional costs or losses that may be material to its financial condition and its cash flows beyond those amounts accrued for or believed to be reasonably possible at this time. Such excess amounts cannot be reasonably estimated.

Liabilities under the MOU

As of March 31, 2026, DuPont has borne Qualified Spend of approximately $730 million and has recorded an indemnification liability for probable and reasonably estimable future Qualified Spend under the Memorandum of Understanding ("MOU") of $162 million. Qnity maintains an indemnification liability for such probable and reasonably estimable future Qualified Spend of $77 million which represents Applicable Qnity Percentage (the portion for which we have been contractually allocated, and directly pay or indemnify DuPont) of 44% of DuPont's after-tax liability.

New Jersey

On August 3, 2025, DuPont, together with Chemours and Corteva and its subsidiary, EIDP, agreed to a proposed Judicial Consent Order (the “Consent Order”) with the State of New Jersey to resolve outstanding claims by the state pending against the companies related to legacy use of a wide variety of substances of concern for an aggregate cash settlement payment to the state of $875 million, payable over a period of 25 years. As of March 31, 2026, DuPont maintains a pre-tax charge of $177 million related to the proposed Consent Order. The Company maintains an indemnification liability of $66 million for our contractually allocated portion of the recorded pre-tax charge. Additionally, DuPont recorded interest accretion of $9 million to date as of March 31, 2026, resulting in a liability of $186 million as of March 31, 2026. Qnity has recorded $3 million for its contractually allocated portion of this accreted interest. We will share in the ongoing costs of maintaining a reserve fund in the event the remedial funding source for a site has been exhausted and the party responsible is not otherwise performing the required remediation.

Other

DuPont has recorded liabilities related to business and operations, historical activities of DuPont, including environmental liabilities, and its present and former subsidiaries, for which the Company maintains an indemnification liability of $49 million and $46 million for its contractually allocated portion as of March 31, 2026 and December 31, 2025, respectively.

NOTE 14 - STOCKHOLDERS' EQUITY

Share Repurchase Authorization

On February 20, 2026, the Company's 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 the Board of Directors. The timing and amount of repurchases under the program will depend on a variety of factors. During the three months ended March 31, 2026, the Company repurchased 219,581 shares under the $500M Authorization for $25 million at an average share price of $113.78 per share. The aggregate amount of common stock available for repurchase under the $500M Authorization as of March 31, 2026 was $475 million.

Accumulated Other Comprehensive Loss

The following tables summarize the activity related to each component of accumulated other comprehensive loss ("AOCL") for the three months ended March 31, 2026 and 2025:

Accumulated Other Comprehensive Loss						Cumulative Translation Adj			Pension						Total
In millions
2025
Balance at January 1, 2025						$	(435)		$	21					$	(414)
Other comprehensive income						53			(2)						51
Balance at March 31, 2025						$	(382)		$	19					$	(363)
2026
Balance at January 1, 2026						$	(221)		$	8					$	(213)
Other comprehensive loss						(50)			(1)						(51)
Balance at March 31, 2026						$	(271)		$	7					$	(264)

The tax effects on the net activity related to each component of other comprehensive loss were immaterial for each of the three months ended March 31, 2026 and 2025.

NOTE 15 - PENSION PLANS

A summary of the Company's pension plans and other post-employment benefits can be found in Note 18 to the Consolidated Financial Statements included in the Company's Annual Report.

The following sets forth the components of the Company's net periodic benefit costs for defined benefit pension plans:

Net Periodic Benefit Costs for All Significant Plans			Three Months Ended March 31,
In millions			2026			2025
Service cost			$	2		$	1
Interest cost			4			1
Expected return on plan assets			(4)			(1)
Amortization of unrecognized net gain			(1)			—
Net periodic benefit costs - total			$	1		$	1

The net periodic benefit costs, other than the service cost component, are included in "Other income (expense) - net" in the unaudited interim Consolidated Statements of Operations.

NOTE 16 - STOCK-BASED COMPENSATION

A summary of the Company's stock-based compensation plans can be found in Note 19 to the Consolidated Financial Statements included in the Company's Annual Report.

In connection with the Separation, the Company adopted the Qnity Electronics, Inc. Equity and Incentive Plan ("EIP"). Under the EIP, the Company may grant options, stock appreciation rights ("SARs"), restricted shares, restricted stock units ("RSUs"), share bonuses, other share-based awards, cash awards, conversion awards, each as defined in the EIP, or any combination of the foregoing. Under the EIP, a maximum of 16 million shares of common stock are available for award as of March 31, 2026.

Qnity recognized share-based compensation expense of $10 million and $4 million for the three months ended March 31, 2026 and 2025, respectively. The income tax benefits related to stock-based compensation arrangements were $2 million and $1 million for the three months ended March 31, 2026 and 2025, respectively.

In the first quarter of 2026, the Company granted 0.3 million RSUs and 0.1 million performance based stock units ("PSUs"). The weighted-average fair values per share associated with the grants were $126.70 per RSU and $191.69 per PSU.

NOTE 17 - FINANCIAL INSTRUMENTS

The following table summarizes the fair value of financial instruments at March 31, 2026 and December 31, 2025:

Fair Value of Financial Instruments			March 31, 2026												December 31, 2025
In millions			Cost			Gain			Loss			Fair Value			Cost			Gain			Loss			Fair Value
Cash equivalents			$	109		$	—		$	—		$	109		$	143		$	—		$	—		$	143
Derivatives relating to:
Foreign currency 1, 2			—			2			(15)			(13)			—			14			—			14
Total derivatives			$	—		$	2		$	(15)		$	(13)		$	—		$	14		$	—		$	14

1.Classified as "Prepaid and other current assets" and "Accrued and other current liabilities" in the Condensed Consolidated Balance Sheets.

2.Presented net of cash collateral where master netting arrangements allow.

Derivative Instruments

Objectives and Strategies for Holding Derivative Instruments

In the ordinary course of business, the Company may enter into contractual arrangements (derivatives) to reduce its exposure to foreign currency, interest rate and commodity price risks. Derivative programs have procedures and controls and are approved by the Corporate Financial Risk Management Committee, consistent with the Company's financial risk management policies and guidelines. These programs reflect varying levels of exposure coverage and time horizons based on an assessment of risk.

The Company's financial risk management procedures also address counterparty credit approval, limits and routine exposure monitoring and reporting. The counterparties to these contractual arrangements are major financial institutions and major commodity exchanges. The Company is exposed to credit loss in the event of nonperformance by these counterparties. The Company utilizes collateral support annex agreements with certain counterparties to limit its exposure to credit losses. The Company anticipates performance by counterparties to these contracts and therefore no material loss is expected. Market and counterparty credit risks associated with these instruments are regularly reported to management.

The notional amounts of the Company's derivative instruments were as follows:

Notional Amounts			March 31, 2026			December 31, 2025
In millions
Derivatives not designated as hedging instruments:
Foreign currency contracts 1			$	(1,172)		$	(1,046)

1.Presented net of contracts bought and sold.

Derivatives not Designated in Hedging Relationships

Foreign Currency Contracts

The Company routinely uses forward exchange contracts to reduce its net exposure, by currency, related to foreign currency-denominated monetary assets and liabilities of its operations so that exchange gains and losses resulting from exchange rate changes are minimized. The netting of such exposures precludes the use of hedge accounting; however, the required revaluation of the forward contracts and the associated foreign currency-denominated monetary assets and liabilities intends to achieve a minimal earnings impact, after taxes. The Company also uses foreign currency exchange contracts to offset a portion of the Company's exposure to certain foreign currency-denominated revenues so that gains and losses on the contracts offset changes in the USD value of the related foreign currency-denominated revenues.

Foreign currency derivatives not designated as hedges are used to offset foreign exchange gains or losses resulting from the underlying exposures of foreign currency-denominated assets and liabilities. The amount charged on a pre-tax basis related to foreign currency derivatives not designated as hedges, which was included in “Other income (expense) - net” in the interim Consolidated Statements of Operations, were gains of $26 million and zero for the three months ended March 31, 2026 and 2025, respectively.

NOTE 18 - FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

The following tables summarize the basis used to measure certain assets and liabilities at fair value on a recurring basis:

Basis of Fair Value Measurements on a Recurring Basis of Significant Other Observable Inputs (Level 2)			March 31, 2026			December 31, 2025
In millions
Assets at fair value:
Cash equivalents 1			$	109		$	143
Derivatives relating to: 2
Foreign currency contracts 3			4			16
Total assets at fair value			$	113		$	159
Liabilities at fair value:
Derivatives relating to: 2
Foreign currency contracts 3			17			2
Total liabilities at fair value			$	17		$	2

1. Time deposits included in "Cash and cash equivalents" in the interim Condensed Consolidated Balance Sheets are held at amortized cost, which approximates fair value.

2. See Note 17 for the classification of derivatives in the interim Condensed Consolidated Balance Sheets.

3. Asset and liability derivatives subject to an enforceable master netting arrangement with the same counterparty are presented on a net basis in the interim Condensed Consolidated Balance Sheets. The offsetting counterparty and cash collateral netting amounts for foreign currency contracts were $2 million and zero respectively, for both assets and liabilities as of March 31, 2026. The offsetting counterparty and cash collateral netting amounts were $2 million and zero, respectively, for assets and liabilities as of December 31, 2025.

For assets and liabilities classified as Level 2 measurements, where the security is frequently traded in less active markets, fair value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability, or by using observable market data points of similar, more liquid securities to imply the price. For time deposits classified as held-to-maturity investments and reported at amortized cost, fair value is based on an observable interest rate for similar securities. Market inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance and quality checks.

For derivative assets and liabilities, standard industry models are used to calculate the fair value of the various financial instruments based on significant observable market inputs, such as foreign exchange rates, commodity prices, swap rates, interest rates and implied volatility obtained from various market sources. Market inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance/quality checks.

There were no transfers between Levels 1 and 2 during the three months ended March 31, 2026, and 2025.

NOTE 19 - SEGMENT INFORMATION

The Company's segments are aligned with the market verticals they serve, while maintaining integration and innovation strengths within strategic value chains. The Company's Chief Executive Officer is its Chief Operating Decision Maker ("CODM"). Effective in the first quarter of 2025, in anticipation of the Separation, DuPont and Qnity realigned their segment structure. As a result of this realignment, Qnity consists of two operating and reportable segments: Semiconductor Technologies (“Semi”) and Interconnect Solutions (“ICS”). All periods presented have been adjusted to conform to the current segment reporting structure. This realignment is consistent with how the CODM now assesses performance. Major products by segment include: Semi (which includes chemical mechanical planarization (“CMP”) pads and slurries, photoresists, functional sub-layers, advanced overcoats, post-CMP cleaners, post-Etch residue removers and emerging cleans) and ICS (which includes copper pillar plating, copper redistribution layer, solder bump plating, under bump metallization, photoresists, packaging dielectrics, gap fillers, phase change, specialty thermal interface materials, thermally conductive insulators, copper plating solutions, dry film photoresists, laminates and polyimide films). The Company operates globally in substantially all of its product lines. Transfers of products between operating segments are generally valued at cost, to the extent such transfers are applicable.

The Company's measure of profit/loss for segment reporting purposes is Adjusted Operating EBITDA as this is the manner in which the CODM assesses performance and allocates resources. The CODM utilizes Adjusted Operating EBITDA to assess financial performance and allocate resources by comparing actual results to historical and previously forecasted results. The Company defines Adjusted Operating EBITDA as earnings (i.e., “Income (loss) before income taxes”) before interest, depreciation, amortization, non-operating pension and other post-employment benefits / charges, and foreign exchange gains / losses, indirect legacy costs, and adjusted for significant items. Reconciliations of these measures are provided on the following pages.

Segment Net Sales, Significant Segment Expenses and Segment Adjusted Operating EBITDA			Three Months Ended March 31,
2026						2025
Semiconductor Technologies			Interconnect Solutions			Semiconductor Technologies			Interconnect Solutions
(In millions)
Segment net sales			$	722		$	593		$	644		$	474
Less 1:
Cost of sales			$	359		$	335		$	307		$	280
Selling, general and administrative expenses			74			80			64			66
Research and development expenses			60			33			53			31
Amortization of intangibles & other segment items 2			13			37			13			42
Add:
Equity in earnings of nonconsolidated affiliates			$	13		$	—		$	11		$	(2)
Depreciation and amortization 3			34			61			29			61
Segment Adjusted Operating EBITDA			$	263		$	169		$	247		$	114

1.The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

2.Other segment items include immaterial other gains or losses and miscellaneous income and expenses.

3.Depreciation is a reconciling item to Segment Adjusted Operating EBITDA as it is included within "Cost of sales", "Selling, general and administrative expenses" and "Research and development expenses".

Reconciliation of Segment Adjusted Operating EBITDA to Income Before Income Taxes						Three Months Ended March 31,
In millions						2026			2025
Semiconductor Technologies Segment Adjusted Operating EBITDA						$	263		$	247
Interconnect Solutions Segment Adjusted Operating EBITDA						169			114
Total Segment Adjusted Operating EBITDA						$	432		$	361
+			Corporate Adjusted Operating EBITDA 1			$	(21)		$	(6)
-			Depreciation and amortization			98			94
+			Interest income			3			—
-			Interest expense			61			—
+			Non-operating pension credits 2			1			—
+			Foreign exchange (losses) gains - net 2			(7)			—
+			Indirect legacy (costs) benefits - net 2			(3)			—
+			Significant items charge			(28)			(15)
Income before income taxes						$	218		$	246

1.Corporate includes certain enterprise and governance activities including non-allocated corporate overhead costs and support functions, leveraged services, and other costs not absorbed by reportable segments.

2.Included in "Other income (expense) - net."

The following tables summarize the pre-tax impact of significant items by segment that are excluded from Adjusted Operating EBITDA above:

Significant Items by Segment for the Three Months Ended March 31, 2026			Semiconductor Technologies			Interconnect Solutions			Corporate			Total
In millions
Transformation, integration, and other charges 1			$	—		$	1		$	(29)		$	(28)
Total			$	—		$	1		$	(29)		$	(28)

1. See Note 4 for additional information.

Significant Items by Segment for the Three Months Ended March 31, 2025			Semiconductor Technologies			Interconnect Solutions			Corporate			Total
In millions
Transformation, integration, and other charges 1			$	(2)		$	(4)		$	(11)		$	(17)
Employee Retention Credit 2			1			—			1			2
Total			$	(1)		$	(4)		$	(10)		$	(15)

1. See Note 4 for additional information.

2. Reflects the accrued interest earned on employee retention credits and is recorded in “Interest income” within the “Other income (expense) - net” line item in the Company’s unaudited interim Consolidated Statements of Operations

Segment and Corporate Information			Semiconductor Technologies			Interconnect Solutions			Corporate			Total
In millions
As of March 31, 2026
Total Assets			$	7,401		$	5,613		$	1,049		$	14,063
Investment in nonconsolidated affiliates			$	388		$	11		$	—		$	399
As of December 31, 2025
Total Assets			$	7,022		$	5,594		$	1,454		$	14,070
Investment in nonconsolidated affiliates			$	375		$	11		$	—		$	386

Capital Expenditure Reconciliation to Unaudited Interim Consolidated Financial Statements			Three Months Ended March 31,
In millions			2026			2025
Semiconductor Technologies			$	49		$	24
Interconnect Solutions			14			20
Corporate			11			3
Segment and Corporate Totals			$	74		$	47
Accrual to cash adjustment 1			48			57
Total			$	122		$	104

1.Reflects the incremental cash spent or unpaid on capital expenditures; total capital expenditures are presented on a cash basis.