Perimeter Solutions (NYSE:PRM) reported fourth-quarter and full-year 2025 results on its earnings call, emphasizing what management described as a sustained expansion in “structural earnings power,” improved predictability in its fire retardant business, and a more active M&A strategy following recent acquisitions.
Chief Executive Officer Haitham Khouri said 2025 reinforced three key themes: expanding baseline profitability, increasing financial consistency, and establishing an M&A playbook through the acquisitions of IMS and MMT.
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Khouri attributed the company’s higher earnings power to “rigorous application” of its operational value drivers: winning profitable new business, driving productivity improvements, and increasing customer value supported by value-based pricing. He also pointed to a shift in fire retardant contract structures away from purely volume-based models toward “more fixed and recurring structures,” which he said reduces sensitivity to fire season volatility.
In Fire Safety, Khouri cited examples of new business and operating initiatives, including entry into “preventative rail-applied retardant” in Europe, expansion of air-based services, continued global penetration of fluorine-free products, and productivity improvements tied to a new retardant manufacturing facility outside Sacramento. He also pointed to growth in non-retardant offerings such as suppressants, including “new multipurpose AD foams.”
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Khouri spent a significant portion of his remarks discussing ongoing operational and safety issues at the Sauget Lenore P2S5 facility operated by Flexsys. He said unplanned downtime “materially reduced production volumes” and negatively impacted financial results for the P2S5 business, and he described “recurring safety incidents” as part of a broader pattern of declining performance since Flexsys was acquired by One Rock Capital in 2021.
Perimeter previously exercised what it says is its contractual right to assume operation of the Sauget plant, but Khouri said Flexsys and One Rock have refused to permit the transition. He characterized negotiations as “bad faith” and said Perimeter is pursuing legal remedies in ongoing litigation, while also evaluating strategic and legal alternatives to ensure continuity of supply and restore prior financial performance. Until the issue is resolved, Khouri said investors should expect continued variability in the P2S5 business.
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Khouri said IMS is focused on acquiring proprietary product lines and applying Perimeter’s operating playbook to drive profitable growth. He said IMS closed several product line acquisitions in 2025, including one in the fourth quarter, and expects the business to deploy “tens of millions of dollars annually” into high-IRR product line acquisitions over time.
Khouri also discussed Medical Manufacturing Technologies (MMT), which closed in January 2026. He described MMT as a manufacturer of engineered machinery and proprietary aftermarket components used in the production of minimally invasive medical devices, including catheters and guidewires. He highlighted attributes including MMT’s position in a specialized industry where quality and reliability are critical, a historical pattern of high single-digit to low double-digit organic growth, and a large installed base that drives recurring aftermarket demand for proprietary consumables, parts, and services. Management also pointed to MMT’s tuck-in acquisition track record.
Khouri said MMT recorded approximately $140 million in revenue and $50 million in adjusted EBITDA in 2025, and added that early implementation of Perimeter’s value drivers supported the acquisition thesis. The company expects MMT’s 2026 results to show meaningful year-over-year growth as operating changes take effect.
Chief Financial Officer Kyle Sable reported consolidated revenue of $652.9 million in 2025, up 16% from the prior year, with adjusted EBITDA rising 18% to $331.7 million. In the fourth quarter, revenue increased 19% to $102.8 million and adjusted EBITDA rose 9% to $36.0 million.
Perimeter posted a GAAP loss per share of $1.37 for 2025 versus a GAAP loss per share of $0.04 in the prior year. Adjusted EPS was $1.34, up from $1.11. In the fourth quarter, GAAP loss per share was $0.94 compared with GAAP EPS of $0.90 in the year-ago quarter, while adjusted EPS was $0.13 in both periods.
Segment performance
Fire Safety: Full-year revenue was $488.9 million, up 12%, while fourth-quarter revenue declined 4% to $58.1 million. Full-year adjusted EBITDA increased 21% to $290.5 million; fourth-quarter adjusted EBITDA declined 6% to $25.5 million.
Specialty Products: Full-year revenue rose 31% to $163.9 million, including $41.2 million from acquisitions, partially offset by a $2.0 million decline in the base business tied to downtime at Sauget. Fourth-quarter revenue increased 75% to $44.6 million, driven by $13.4 million from acquisitions and $5.7 million from the base business. Full-year adjusted EBITDA increased 3% to $41.2 million, and fourth-quarter adjusted EBITDA rose 85% to $10.4 million.
Sable said Fire Safety performance reflected execution across products and geographies. In suppressants, he cited $21.8 million of incremental revenue driven by increased volume and pricing, airport conversions, and replacement demand in the installed base. In retardants, he pointed to growth outside North America, including increased sales in Australia and France and progress in earlier-stage markets such as Italy, including applications along rail lines. In North America, he said retardant revenue increased $12.6 million for the full year despite a decline in U.S. acres burned, which management said underscored both the operational model and reduced sensitivity to fire activity.
On contracting, Sable said the company continues to “decouple” revenue from fire activity by shifting toward fixed fees and away from more variable revenue, which he said improves “revenue quality” and predictability.
Sable said Perimeter deployed approximately $149 million of capital in 2025 across capital expenditures, bolt-on M&A, and share repurchases, all evaluated against a minimum targeted 15% long-term IRR. The company invested $26.5 million in capex during 2025 and repurchased $40.4 million of shares earlier in the year. It also invested $82 million to acquire IMS product lines and select Fire Safety assets from Compass, including a $40 million expansion in the fourth quarter.
In January 2026, Perimeter acquired MMT for $685 million in cash, funded by cash on hand and $550 million of newly issued senior secured notes. Sable said Perimeter also has $675 million of 5% fixed-rate notes due in 2029 and issued $550 million of 6.25% notes due 2034. At year-end, the company reported $325.9 million of cash and equivalents and an undrawn $200 million revolver. Net leverage was 1.1x at quarter-end; on a pro forma basis reflecting the MMT transaction and new notes, leverage was approximately 3.0x, which Sable said remains below the company’s targeted “ideal” leverage level of 4.0x.
Looking ahead, Sable said updated long-term assumptions include annual interest expense of approximately $75 million following the MMT financing, capital expenditures of $30 million to $40 million per year, and a cash tax rate expected to be “20% or better.”
During Q&A, management reiterated that it is reluctant to provide a specific fixed-versus-variable split for retardant contracts, but said cash flows are “dramatically more predictable” than historically and should become incrementally more predictable in 2026 as the most recent U.S. Forest Service contract takes effect. Management also said that while acres burned remains an imperfect metric for demand, it is still among the best available indicators, and that Perimeter’s revenue and EBITDA sensitivity to changes in acres burned has become “dramatically muted” versus its historical results.
On IMS, management said product line acquisitions are “higher returning” than typical M&A because proprietary, aftermarket-heavy product lines can be purchased at more attractive multiples than entire companies.
Perimeter Solutions Ltd. (NYSE: PRM) is a global specialty chemicals company focused on delivering performance-driven solutions for the oil and gas, coatings, plastics, water treatment and packaging markets. Established as an independent publicly traded company in December 2019 following its spin-off from NewMarket Corporation, Perimeter Solutions has positioned itself as a leading provider of highly engineered chemical products designed to optimize upstream oil recovery, protect infrastructure and enhance the performance of industrial processes.
The company’s core product portfolio spans several key segments.
The article “Perimeter Solutions Q4 Earnings Call Highlights” was originally published by MarketBeat.
