QNITY ELECTRONICS, INC.

Red flags

• The two largest customers represented 19% of 2025 sales: Samsung Electronics at 11% and Taiwan Semiconductor Manufacturing Company at 8%; the top 10 represented 34%.
• Qnity recorded $190 million of legacy-liability indemnification liabilities at year-end 2025, with potential exposure up to $86 million above the accrued amount and possible additional material losses.
• Historical financial statements include carve-out allocations from DuPont and are explicitly not necessarily indicative of future standalone performance; Qnity also remains dependent on transition services from DuPont.
• Interest expense was $65 million in 2025 versus zero in prior years because Qnity entered into new notes and a term loan, adding leverage-related earnings sensitivity.
• The effective tax rate rose to 24.2% in 2025 from 19.6% in 2024, partly due to Pillar Two minimum-tax effects and jurisdictional earnings mix.