Perimeter Solutions, Inc. (PRM) Q3 2025 Earnings Report, Transcript and Summary

Ladies and gentlemen, greetings, and welcome to the Perimeter Solutions Q3 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host for today, Seth Barker, Vice President. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining Perimeter Solutions' Third Quarter 2025 Earnings Call. Speaking on today's call are Haitham Khouri, Chief Executive Officer; and Kyle Sable, Chief Financial Officer. We want to remind anyone who may be listening to a replay of this call that all statements made are as of today, October 30, 2025, and these statements have not been nor will they be updated subsequent to today's call. Today's call may contain forward-looking statements. These statements made today are based on management's current expectations, assumptions and beliefs about our business and the environment in which we operate, and our actual results may materially differ from those expressed or implied on today's call. Please review our SEC filings, particularly any risk factors included in our filings for a more complete discussion of factors that could impact our results, expectations or assumptions. The company would also like to advise you that during the call, we will be referring to non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, LTM adjusted EBITDA, adjusted EPS and free cash flow. The reconciliation of and other information regarding these items can be found in our earnings press release and presentation, both of which will be available on our website. With that, I will turn the call over to Haitham Khouri, Chief Executive Officer.

Thank you, Seth. Good morning, everyone. Thank you for joining us. We're pleased to report Perimeter's third quarter and year-to-date results. Third quarter adjusted EBITDA was $186.3 million and year-to-date adjusted EBITDA was $295.7 million. The 3 primary drivers of these results were: number one, execution on our operational value drivers with particularly strong results in our international retardant business, our suppressants markets and IMS; two, the impact of our efforts to drive more consistency and predictability in our retardant business with reduced dependence on the North America fire season; and number three, a more proactive initial attack strategy by our customers, which drove greater retardant use. We continue to deploy capital during the third quarter, investing nearly $17 million across capital expenditures and the purchase of product lines at IMS. I will provide a summary of our strategy, followed by an operational update, then discuss our new forest service contract. Kyle will then walk through our financial results and recap our capital allocation in the quarter. Starting on Slide 3 with a summary of our strategy. Our goal is to fulfill our critical mission by providing our customers with high-quality products and exceptional service, while delivering our investors private equity-like returns with the liquidity of the public market. Our strategy is built on 3 key operational pillars. First, we own exceptional businesses. These are niche market leaders that play critical roles in solving complex customer problems, qualities that support high returns on invested capital and durable earnings growth. Second, we rigorously apply our 3 operational value drivers to the businesses we own. We drive profitable new business, achieve continual productivity improvements and provide increasing value to our customers, which we share in through value-based pricing. And third, we operate our businesses in a highly decentralized manner, granting our business unit managers full operating autonomy, paired with accountability to deliver results with a tightly aligned incentive structure for our managers to think and act like owners. We believe that our operational pillars will optimize our durable long-term free cash flow. We then seek to maximize long-term per share equity value through a clear focus on the allocation of our capital as well as the management of our capital structure. Turning now to our financial results on Slide 4, and starting with Fire Safety. Fire Safety's strong third quarter and year-to-date results were driven by 3 key factors. First is continued progress on our operational value drivers. We grow our sustainable earnings power through the rigorous implementation of our 3 value drivers. This improvement is evident in our Q3 and year-to-date 2025 results. Sales increased as we drove profitable new business and earned the right to share in the customer value creation across both retardants and suppressants. Margins expanded as we improved the efficiency of our operations via productivity initiatives, and revenue and margins benefited from our increased operating investments and capital expenditures. We expect the impact of our value drivers to compound over time and drive sustainable growth in our earnings power. Looking across our products, our international retardants business and our Suppressants business continued their momentum in the third quarter, with particularly strong volume performance from our profitable new business initiatives and meaningful top and bottom line impacts from our productivity and value pricing efforts. Our U.S. retardant business also saw contributions across all 3 operational value drivers, driving top and bottom line growth, despite a relatively mild North America fire season. The second driver of our financial results are the structural changes we've made towards greater consistency and predictability in our retardants business with reduced dependence on the severity of the North America fire season. We renewed substantially all of our key retardant contracts over the past 2 years. And in doing so, prioritized contractual adjustments to drive greater consistency and predictability in our business and financial results. These adjustments were well received by our customers who, like us, benefit from greater consistency and predictability. While the correlation of our fire safety results with the North America fire season is not eliminated, we believe it is notably reduced, relative to history as is evident in our 2025 financial results. The third driver of our 2025 results is a shift in our customers' approach to wildfire response. Our key U.S. customers adopted a more proactive approach to wildfire management this year, which we believe contributed meaningfully to lower acres burned, and to significant associated cost savings. With support from Secretary Brooke Rollins of the Department of Agriculture; and Secretary Doug Burgum of the Department of Interior, Tom Schultz, Chief of the US Forest Service, issued a wildfire letter of intent in May, which directed the Forest Service to suppress fires as swiftly as possible and to focus on safe, aggressive initial attack. This directive from Chief Schultz drove greater mobilization of resources, including aerial resources deploying retardant to quickly attack nascent fires. By quickly getting retardant on fires, agencies were able to limit their spread and mitigate the devastation they cause in our communities. This more aggressive initial attack posture helped limit acres burned despite the increase in fire starts while driving meaningful use of retardant. The actions taken this year by Secretary Rollins, Secretary Burgum, and Chief Schultz, and the men and women of our agency partners undoubtedly saved lives, property and our environment. As always, Perimeter is proud to play a part in our customer success. Moving on from this year's operational development and looking to the future. We were pleased to have signed a new contract with the US Forest Service during the third quarter. This contract, amongst the most significant in our company's history, builds on Perimeter's 60-year legacy of working with the Forest Service to protect lives, property and environment. By combining our customers' unwavering commitment to the mission with the best of private sector efficiency, this contract delivers a win-win outcome by: first, delivering substantial savings to the U.S. taxpayer; second, driving Perimeter's continued financial momentum; and third, enhancing our national wildfire preparedness and response capability. A key element of the contract is the savings it provides to the Department of Agriculture, the Department of Interior, the US Forest Service, and ultimately, the American taxpayer. The contract lowers the price of retardant in its first year and delivers additional savings by expanding the services Perimeter can efficiently deliver over the contract 5-year term. One example of the contract's mutually beneficial outcome is the transition to our full-service model. Substantially all federal bulk bases, which we serve with product will transition to our full service model, which we serve with our comprehensive solution spanning product, service, staffing, equipment and maintenance. We capture meaningful operating efficiencies by incorporating these bulk bases into our full-service network and simultaneously drive savings to the customer as well as profitable new revenue streams and incremental productivity opportunities to Perimeter. In a similar win-win, federal bases are transitioning from a mix of liquid and powder product to an all-powder footprint. Our powder product is lower priced and more efficient to handle than our liquid product, which drives direct customer savings. Simultaneously, powder conversion enhances our profitability through a lower cost and complexity manufacturing, distribution and logistics footprint. Finally, this new contract enhances national wildfire preparedness and response. The contract unprecedented 5-year term allows Perimeter and the Forest Service to jointly plan and invest behind meaningful multiyear initiatives, such as the all-powder product conversion. To safeguard future air tanker fleet uptime and reliability, Perimeter has also committed to aiding the Forest Service on the development of retardant testing standards that ensure all retardant products match Perimeter safety standards developed over the past 60 years. And building off of the supply chain resiliency advanced by our new Sacramento facility, Perimeter is working to build that same continuity, further up the supply chain by enabling more domestic supply of raw materials. Together, these features deliver the safest, most resilient and best-performing retardant solution our nation has ever had. We'd like to acknowledge and thank our agency customers for the collaborative engagement on this landmark contract. We look forward to continuing our successful 60-plus year collaboration over the next 5 years and beyond. Switching now to our Specialty Products segment. During the third quarter, the significant operational and safety events that have plagued our Sauget, Illinois plant since One Rock Partners purchased the Flexsys assets in 2021, not only continued but escalated. There was once again a substantial amount of unplanned downtime, which significantly impacted Specialty Products' financial results in the third quarter. While that was disappointing, significant safety events during the third quarter are of greater concern. These events demonstrate the urgent need to get these assets out of Flexsys' control as soon as possible for the safety of workers at the plant. Unfortunately, Flexsys and their parent, One Rock, continue to fight our efforts to take operational control of the plant, despite their clear contractual obligation to do so. Recently, Flexsys made a bad faith proposal that we lease the land under the plant for more than 10 to 20x the cost to purchase identically zoned and similarly configured and resourced land in the same general vicinity. We will not capitulate to these tactics. We will continue to doggedly pursue our rights under the contract in court as our previously disclosed litigation progresses. We know that it may take an extended period before there is a resolution, and we caution our investors to expect a continued financial impact until this issue is resolved. Regardless, we remain fully committed to taking over the plant no matter how long it takes or how difficult the path is. We are doing this not only for the benefit of our shareholders, customers and the community where we operate, but also for the safety of the employees at the plant. We are confident that we will eventually operate the plant and consistently and safely produce the highest quality product. Lastly, IMS. The business continues to perform well, and we again acquired new product lines during the third quarter. Our IMS acquisition team remains active, and we expect to continue to drive IMS' profitability through enhancing our operating value drivers on both existing and newly acquired product lines. With that, I'll turn the call over to Kyle for a more detailed review of our financials, earnings power and capital allocation in the quarter.

Thanks, Nathan. I'll begin on Slide 8, where growth figures shown are versus the prior year comparable period. Starting with Fire Safety. Revenue for the quarter came in at $273.4 million, reflecting a 9% year-over-year improvement, and $430.8 million year-to-date, a 15% gain. The segment's adjusted EBITDA for the quarter was $177.2 million, representing a 13% increase over last year, and $265 million year-to-date, marking a 24% gain. Our operational value drivers were the primary driver of the year-over-year increase, with strong performance across our various products and geographies. Our suppressants team was successfully expanding sales, booking new volume wins at attractive pricing with overall suppressants revenue increasing $12.4 million from the prior year quarter. We continue to make excellent progress in winning airport conversions to our newest products while building a base of replacement volumes sold into the installed base. Meanwhile, our retardant products were strong in our markets outside North America, growing sales $5.5 million from the previous year. Historically larger markets such as Australia and France had robust performance, while our team made progress on expanding into more nascent markets such as Italy, where the team focused on new applications for retardant products deployed along rail lines. In the U.S., our retardant revenue grew modestly despite the pronounced decline in U.S. acres burned. We saw strong performance across all 3 OBDs in our retardant business, driving new business as we extend our footprint to new bases and faster loading equipment, productivity across a variety of sourcing and logistics areas, and value-based pricing where we have earned the right to share in the value we create for our customers. As Haitham noted, we worked to decouple our revenue from fire activity as we renewed contracts. We have purposely shifted sales towards fixed services revenue and proportionately away from variable products revenue. The net effect is to make our revenue less sensitive to volume movements as was historically the case, thereby improving the quality of our revenue base and contributing to Q3 strong performance. Finally, the increasingly aggressive initial attack strategy employed this year by our customers, coupled with an even distribution of acres over time and geography, almost fully offset the decline in volumes from fewer acres burned. The resulting adjusted EBITDA growth demonstrates how the many levers of growth across the business, along with improved contract structures can effectively reduce our sensitivity to acreage burned in any given year. In our Specialty Products segment, Q3 net sales came in at $42.1 million, representing 15% growth from the prior year quarter. This performance reflects a $10.8 million contribution from IMS acquisitions, which was offset by a $5.3 million decrease from the base business. Year-to-date net sales reached $119.3 million, up 20%, driven by a $27.7 million from IMS acquisitions, partially offset by a $7.6 million decline attributable to ongoing unplanned downtime at the Flexsys-operated Sauget plant. Specialty Products Q3 adjusted EBITDA fell to $9.1 million compared to $12.9 million in the prior year quarter, and slightly declined year-to-date, down to $30.8 million compared to $34.5 million. Q3's operational challenges are a continuation of the issues initially discussed in Q1, and the ongoing downtime contributed to lower sales and higher costs in the business and dampened adjusted EBITDA. While it's impossible to predict the plant's performance under Flexsys and their parent One Rock's control, we anticipate a continued drag from operational issues until we assume operational control of the plant. Our IMS business continues to progress well with 4 product lines acquired year-to-date. The business continues to outperform our expectations from the time of the initial deal and the add-on product line acquisition process has already shown to be effective in converting its pipeline into closed transactions. We expect to implement our operational value drivers to drive adjusted EBITDA on existing product lines as well as continue to expand into new product lines via M&A. Viewing the segments together, consolidated third quarter sales grew 9% to $315.4 million, while adjusted EBITDA also improved 9% to $186.3 million. Year-to-date, consolidated sales reached $550.1 million, up 16%. And adjusted EBITDA rose 20% to $295.7 million. Finally, bringing our adjusted EBITDA down to EPS. For Q3 2025, our GAAP loss per share was $0.62 versus GAAP loss per share of $0.61 in the prior year quarter. Q3 2025 adjusted EPS was $0.82 compared to $0.75 in Q3 2024. On a year-to-date basis, GAAP loss per share was $0.45 compared to a GAAP loss per share of $1.03 for the same period last year. Year-to-date adjusted EPS was $1.24 as compared to $0.99 for the same period in the previous year. Turning to our long-term assumptions as shown on Slide 9. Our assumptions are unchanged from Q2, and with normally quarterly variation, Q3 is consistent with those expectations. Q3 interest expense was $9.9 million, while taxable depreciation, amortization and other tax deductions totaled $5.8 million. Cash paid for income tax was $15.4 million in Q3 as compared to $27 million in the prior year quarter. [indiscernible] variation in factors is typically timing related in any given quarter and our full year tax expectation was unchanged. Capital expenditures for the quarter were $5 million. Our working capital needs fluctuate seasonally and Q3's capital levels and the associated source of cash are consistent with our expectations, given the level of activity in Q3. Our year-end net working capital outlook is unchanged. We ended the quarter with about 147.9 million basic shares outstanding. We define free cash flow as cash flow from operations less capital expenditures. In total, we had free cash flow in Q3 of $193.6 million and free cash flow of $197 million for the 9 months ended September 30, 2025. 2025's cash flow generation seasonality is in line with our expectations and consistent with history, where we invest significantly in working capital in the first half of the year in preparation for the fire season and convert those investments into cash in the second half. Our full year adjusted EBITDA to cash generation conversion is consistent with the assumptions shown on this slide, aside from potential cash tax timing differences. Finally, I will reiterate that we expect our business to remain well insulated from policy and economic shifts. Trade policy effects are tracking at or below our initial expectations, amounting to less than 2% of consolidated adjusted EBITDA. At the same time, our business is seeing minimal government funding disruption since it's tied to essential federal emergency response initiatives. And more broadly, our portfolio continues to show resilience against economic conditions, given the nondiscretionary nature of most of our products. Turning from operations to capital allocation. We invested nearly $17 million of capital in the quarter, the returns on which we expect will exceed our minimum targeted equity returns of 15%. We continue to reinvest in our business organically with $5 million allocated to capital expenditures in the quarter. The majority of these capital expenditures supported our growth and productivity initiatives. Our pipeline of projects continues to build and is an important element supporting our long-term organic adjusted EBITDA growth trajectory. Moving to M&A. As discussed previously, we invested $12 million in Q3 to acquire product lines for IMS, consistent with IMS' original investment thesis. The acquired product lines are being integrated into our manufacturing footprint, and our team is working to implement our operational value driver strategy. IMS product line acquisitions will continue to be an important avenue to deploy capital at attractive IRRs, and we believe we can deploy tens of millions of dollars of capital into IMS product line acquisitions annually for many years to come. Our M&A capacity far exceeds what we expect to allocate to IMS, and we are actively evaluating larger M&A targets. As Haitham outlined at the beginning of the call, our plan is to own a portfolio of high-quality businesses where our operational value drivers drive meaningful post-acquisition improvement in financial performance as has occurred at Perimeter's portfolio of businesses over the past few years. Our portfolio is not industry-specific, but rather strategy-specific. Business quality and the applicability of our operational value drivers are what tie our portfolio together. Having a chemical, fire or safety aspect of the business does not make a business a potentially good fit for Perimeter, and we expect future deals will come from new subverticals within the broad industrial space. Let me reiterate the strategic characteristics of the businesses we expect to add to our portfolio. Our first and most important characteristic is that the business produces a small but essential component of a larger solution. We begin by evaluating whether that broader solution addresses a critical complex problem for customers. We further assess whether the target serves a narrow need within that broader solution, creating the niche market. Lastly, we confirm that no alternative offers comparable value to the customer. Together, these qualities align with our value creation strategy, solve customers' most important challenges better than anyone else, while sustainably sharing the value created between our business and our customers. This allows us to drive profitable new business, seek out efficiencies that drive productivity, and earn the right to share in value creation through value-based pricing. In addition to the primary criterion of shared value creation, we prefer companies with recurring revenue, secular growth, high free cash flow generation and correspondingly high returns on capital and the potential for add-on M&A. Successful M&A at Perimeter demands finding targets with these characteristics, confirming the applicability of our operational value driver strategy and diligence in closing the transaction. Then the real work begins, as we work to implement our operational value drivers and strive to replicate the same success we've seen in the businesses we acquired 4 years ago. Our team is actively working to source [ indulgence ] in new targets that meet these criteria, and we are committed to expanding via M&A as a key part of a long-term value creation strategy. Turning to Slide 11. The second half of our capital strategy is to maintain moderate leverage that amplifies equity returns. Here, we benefit from a favorable debt structure, a single series of fixed rate notes at 5%, maturing in the fourth quarter of 2029 with no financial maintenance covenants. As of Q3, we were levered 1x net debt to LTM adjusted EBITDA, driven by $675 million of gross debt, $340.6 million in cash and nearly $329 million of LTM adjusted EBITDA. We also have substantial liquidity with an undrawn $100 million revolver as of quarter end in addition to our cash. Before we wrap up, I will share that the company plans to participate in Baird's Industrials Conference in November, where we will webcast our presentation for the benefit of our shareholders. To conclude, our purpose as a company is to fulfill our mission and drive shareholder value. The US Forest Services’ decision to extend its trust in Perimeter for another 5 years stands as a testament to our colleagues' unwavering commitment to fulfilling our vision. Simultaneously, our increased earnings power in Q3 stems from our team's disciplined execution of our operational value drivers, combined with continued improvement in our contracts, which combined to generate enough improvement to more than offset the headwind from a milder fire season. We are deeply proud of how our team continues to embrace both our vision and the mandate to drive value with enthusiasm, discipline and pride, and we look forward to building on this momentum in the quarters ahead. With that, I'll hand the call back to the operator for Q&A.

[Operator Instructions] Our first question comes from Josh Spector with UBS.

Congrats on the strong results. So I wanted to try to ask first was really what do you think is the normal, I guess, earnings power within the Fire Safety segment overall? So understanding kind of the more aggressive tactics, pulled more gallons into a weaker fire season. If we think next year would be normal, which would maybe be a 30% to 40% increase in acres burned, will you have any increase in your gallons as you go to that level? Or are you tapped out in terms of capacity?

Josh, it's Kyle. I think there's 2 in there. So let me take them one at a time. When we think about the earnings power of the Fire Safety business, this year is pretty indicative of what the earnings power should be in more or less a normalized environment. That's the first piece. And there's puts and takes to that, as you've highlighted. Our volumes had a headwind, obviously, from the acres side that, as we said in the script, was entirely offset by this more increasingly aggressive tactics. As we translate to next year, and think about the second half of your question, we would get an additional benefit if acres were to rebound from this year's levels, but with 2 caveats. One, that that acres benefit wouldn't be as strong as it otherwise would have been because of the initial attack posture. And two, we don't know exactly what that posture will look like. Last year -- it was very highly successful this year. We hope that we see a continuation of that trend, but we just actually don't know what that's going to look like quite yet.

Yes. I guess, I mean, related to that is, I mean, did you benefit in terms of the amount that you were able to load, because of maybe a more dispersed and less chaotic fire season in that, if we have more unplanned fires, it becomes harder? Or has your ability to load increased enough where, again, if the activity is maybe slightly more unpredictable, you could load similar to more gallons?

You're hitting on exactly the right factors here, Josh. Disaggregating them is tough. So yes, we definitely benefited from a more even dispersion of acres burned across both geography and timing. There was less, less large fires concentrated in a very tight band where our resources were fully utilized. That said, there is a benefit coming from both the growth in the air tanker fleet, which obviously comes from the agencies and our partners in the air taker community as well as our own ability to load more retardants out of our basis. So there's a tailwind from that. Disaggregating those out, and to be able to quantify them for you is pretty difficult to do, just because they all interact with each other.

But Josh, to be clear, we were not tapped out on capacity this year and wouldn't expect to be tapped out on capacity in a stronger fire season.

That makes sense. And if I could ask just one more broad one, just on the new USDA framework that you have for next year. I don't know if you can give a little bit more framing on 2 components of it is to, I guess, first, between the price down and services up, how do you think about the net impact to your earnings potential '26 versus '25? And then second, with that, in terms of a split between services, which would maybe be more of a fixed fee versus a dollar per gallon type charge, how has that transitioned in this contract and that does the makeup look materially different in '26 on versus what it's looked like over the last few years?

On the first part, Josh, we expect to grow our various financial metrics, certainly, EBITDA in our North America fire business in a like-for-like acre season in '26, inclusive of this contract. As I mentioned in the prepared remarks, this contract continues our positive financial momentum. As far as your second part of the question, this contract further moves our business towards consistency, predictability, and stability by increasing the proportion of revenue and EBITDA that comes from services and other fixed components, and due to the year 1 price cut decreases the proportion that comes from fewer gallons.

Our next question comes from Dan Kutz with Morgan Stanley Investment Managers.

Congrats on the results. So I wanted to talk about another kind of government update that we got 1 month, 1.5 months ago, and that was around the plans to form the U.S. Wildland Fire Service, which would effectively combined the USDA's US Forest Service and then all of the DOI wildfire agencies. Just wondering, I know it's early stages, but just any initial thoughts on the implications of this, I guess, merger for lack of a better term, and 2 customers that are previously spaced on acres burned data, they each kind of represent 1/3 of the Lower 48 market. So those 2 organizations coming together, would love any thoughts on potential for debottlenecking and maybe more resources or efficiency, which could lead to more robust firefighting efforts and increased retardant demand. And I guess the other question we've been getting on this merger is that they mentioned in the press release that one of the goals is joint contracting and procurement. So I've been getting questions around whether the contract that you guys entered with USDA could potentially extend to the DOI agencies as these organizations combine.

So in many ways, our existing federal contract is the template for this new Wildland Fire Service. And what I mean by that is our contract has historically and continues in the new contract to combine all 5 federal firefighting agencies into one contract. We refer to it as a Forest Service Contract, but it really applies to all 5 federal firefighting agencies equally and will continue in that way going forward. The merger, as you call it, of these agencies is very much in line with the spirit of what our contract has always done, and we view that as a material positive for the industry, certainly for the air tanker companies, certainly for us, most importantly, for national wildfire preparedness and response and our wildland firefighters. It's just much more efficient and effective and streamlined to have one empowered agency and have the industry and our federal partners speak with one voice. So we're very supportive of this change.

Awesome. That's really helpful. So maybe just a broad question on contracting, in general, because it seems like across several of your product lines, you have some large customers or customers that kind of represent a big portion of demand for your products. You had the USDA, and then it sounds like it's actually more broadly the U.S. wildfire agency's contract. You had the PFAS-free U.S. military contract for the present business. The question is, in the same way that you kind of target economic criteria and operational value drivers that inform your M&A and operational strategies, any general thoughts or tactics or items that you prioritize when you're negotiating big contracts with customers, just kind of the puts and takes between stability and hedges, and durability versus contract term and cost pass-through, pricing or maybe there are some markets where product lines where flexibility or spot pricing or cost exposure could make more sense. Just wondering if you could kind of walk us through generally some of the puts and takes that you think through as you're negotiating larger contracts.

I'm going to have to give you a bit of a high-level answer, Dan, just because there are so many contracts in the different parts of our business. But what I'll say is contracting is remarkably important. You can drive or frankly, destroy a very significant amount of value through optimal versus sloppy contracting. And so when we take it, we take it really seriously, and we always approach contracting and train our folks to approach contracting in a highly, highly collaborative manner. First thing you do with contracting is you understand the customers' needs, the customers' pain points, the customers' constraints and you try to present them with an optimal outcome for them that, at the same time, touches on what we care most about as far as the stability, predictability, growth, et cetera, of our business. And those principles are extrapolatable across contracting in all of our businesses. And when you look at our financial results in 2025, and the general, I would call it, outperformance of revenue and EBITDA versus various end market metrics, that reflects to years of applying that contracting attitude or approach across our businesses.

Great. Also really helpful. And then maybe if I could just sneak one more quick one in. So a couple of comments that you guys had about the international retardants business being strong. I think it was a year-to-date comment. But just wondering if you could kind of unpack the international business results a little bit this year, just kind of relative strength year-to-date versus 3Q? And then just remind us what the key markets are in the northern versus southern hemisphere and kind of the relative strength of those markets and Perimeter's results this year.

Yes. international has been strong for us for the past several years. And given where international retardant is in the very long-term maturity curve, we would expect international retardant to remain very strong for us for the foreseeable future. Both 2025 year-to-date and Q3 were a continuation, Dan, of that trend. Our business in Europe was excellent in Q3. Our business in the Middle East was excellent in Q3. Our business in Asia was strong in Q3. And then our business in the southern hemisphere, both Australia and South America was strong in Q3. Our international retardant business really is firing on all cylinders. Part of that is self-help and strong execution, part of it is it should be very strong. It's very early in the adoption cycle. The economics of adoption make a whole lot of sense, and we're riding that wave.

[Operator Instructions] Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Haitham Khouri for the closing comments.

Very good. Thank you for the nice job hosting today, [ Elrick ]. Thank you, everybody, for taking the time to join us. As a reminder, as Kyle mentioned, we'll be at the Baird Industrial Conference in a couple of weeks, and we'll webcast our presentation, and thank you all for the support.

Thank you. Ladies and gentlemen, the conference of Perimeter Solutions has now concluded. Thank you for your participation. You may now disconnect your lines.