Afternoon. Thank you for joining us today. I am Mark Blinn, Qnity Electronics's Board Chair. I will chair and conduct the meeting. I now call this inaugural annual meeting of stockholders to order. Please be advised that the polls are now open for voting. Joining me this afternoon is Jon Kemp, Qnity Electronics's Chief Executive Officer, along with Lauren Luptak, Qnity's Corporate Secretary, who will lead the procedural portion of the meeting. I would also like to welcome the other members of our board, along with certain members of our management team and a representative from PricewaterhouseCoopers, Qnity Electronics's external independent auditor. Jon will provide some key highlights from our first year as an independent public company. First, let me turn it over to Lauren.
Thanks, Mark. Just a quick note that during this meeting, we may make forward-looking statements regarding our business. Because these statements are based on current assumptions and factors that involve risks and uncertainties, our actual performance and results may differ materially. Our 2025 annual report and first quarter 2026 report, filed with the Securities and Exchange Commission, include discussion of the principal risks and uncertainties which may cause such differences. These documents are posted on our investor relations website. I'll now turn it over to our CEO, Jon Kemp.
Thank you, Lauren, and thank you to everyone joining us today for your continued commitment and investment in Qnity. This May marks six months since Qnity became an independent company. We are well-positioned as a partner of choice for many of the world's leading fabricators and OEMs advancing next-generation technologies. With a powerful integrated portfolio, a differentiated ability to innovate alongside our customers' technology roadmap, and leadership in advanced materials, Qnity is ideally positioned to support and benefit from the exponential growth underway in AI, high-performance computing, and advanced connectivity. We're at a critical inflection point in the semiconductor industry. For decades, progress in chip manufacturing was driven by shrink, smaller transistors, and increasing density to improve both performance and power. Today, physical limits are redefining how innovation happens. Shrink built the last era. Stack will define the next.
That means even while shrink remains important, we're moving from 2D designs to 3D architectures, stacking chips to unlock the next frontier in computing. That shift from flat to vertical elevates the importance of materials, integration, and reliability. This transition plays directly to Qnity's strengths as our semiconductor technologies and interconnect solutions segments work together to enable scalable high-performance systems for next-generation technologies. Together, they form a differentiated platform that deepens customer partnerships and positions Qnity to deliver long-term value for our shareholders. Qnity's total addressable market exceeds $30 billion, and we have a strong foundation for long-term growth. We expect to outperform the industry by building on our competitively advantaged position, combining deep customer relationships, global scale, market-leading solutions, and operational excellence with a culture of innovation that allows us to move in step with our customers' most advanced technology roadmap.
Intentionally focused at the leading edge of technology, our unit-driven portfolio is well-aligned with the fastest-growing segments of the industry, giving us a durable competitive advantage. Our disciplined focus to execute our growth strategy translated into strong financial performance in 2025, delivering meaningful innovation to solve our customers' toughest challenges, scaling our platforms in step with their growth, and allocating capital to the highest return opportunities. Qnity had a tremendous start to 2026, outperforming expectations and delivering our eighth consecutive quarter of strong, profitable organic growth. Our continued focus on disciplined execution drove double-digit growth in both of our segments and meaningful margin expansion, led by our integrated portfolio spanning advanced chips, advanced packaging and interconnect, and thermal management.
In the first quarter of 2026, we delivered net sales of $1.3 billion, up 18% year-over-year, and organic sales up 17%, GAAP net income of $162 million and adjusted earnings of $226 million, adjusted operating EBITDA of $411 million, up 22% year-over-year, and GAAP EPS of $0.72 with Adjusted EPS of $1.08, up 33% year-over-year. Let me briefly touch on our balanced and returns-driven capital allocation strategy. We prioritize reinvesting free cash flow into the business through capital expenditures and R&D to support sustained above-market growth. With a strong balance sheet, we also have the flexibility to pursue selective, accretive acquisitions that expand our portfolio or technology roadmap. At the same time, we remain committed to returning capital to shareholders through dividends and share repurchases while continuing to strengthen our balance sheet with net leverage currently at 2.2 times, well below our long-term target.
Looking ahead, strategically, we remain focused on three key priorities. First, accelerating growth through trusted partnerships and co-innovation with customers. Second, continued discipline around operational excellence and quality. Finally, advancing our local-for-local operating model, including necessary capacity and supply chain resiliency. These priorities guide how we invest, how we execute, and how we show up for our customers in every market we serve. To our dedicated employees and trusted partners, thank you for your unwavering commitment and pursuit of excellence. To you, our valued shareholders, thank you for your ongoing trust and belief in Qnity's purpose and future to make tomorrow's technologies possible. We're energized by the opportunity ahead and excited about what we're building together.
Thanks, Jon. The procedures we follow are simple and designed to ensure that we have a fair and orderly meeting. As we move through our agenda, we will present the items for business today. Following the presentation of four management proposals, we will have a question and answer period. The questions will be strictly limited to the business at hand. Please see the rules and procedures of conduct on the virtual meeting website for additional information. If you wish to ask a question now relating to one of the proposals, please type your question into the question field on the virtual meeting portal. I will read relevant questions for the audience, and they will be answered by the appropriate company representative. Discussion on any matter will be limited if repetitive. Due to time constraints, we may not be able to respond to every question.
Questions or comments unrelated to the agenda items or of individual concern rather than of concern to stockholders generally will not be permitted during the meeting. Recording of the meeting is also not permitted. Notice of the annual meeting was distributed to all of our common stockholders of record as of March 25th, 2026. Proof of notice will be incorporated into the minutes of this meeting. The board appointed Lewis Larsen, a representative of Broadridge, to act as the inspector of election for the meeting. The inspector has informed me that a quorum is present for the purposes of conducting the business of the meeting. As noted by Mark at the outset of the meeting, the polls are open for voting on all matters on the agenda.
Any stockholder who has previously voted a proxy through the internet, by mail, or by telephone does not need to submit anything further at this meeting. Your vote has already been tabulated. However, if you have not yet voted or wish to change or revoke your vote, please use your 16-digit control number and submit your vote through the virtual meeting website at this time. I will now review the matters to be voted on. Under the company's amended and restated bylaws, the only matters properly before our stockholders today are those set forth in the Notice of Annual Meeting and Proxy Statement. The first item on the agenda is the election of three Class I directors. The director nominees for election are Karin De Bondt , Byron Gree n, and Jon Kemp. Your board recommends a vote for these nominees. Agenda items two, three, and four are as follows.
Agenda item two gives stockholders the opportunity to approve, on an advisory basis, the company's executive compensation. Agenda item three gives stockholders the opportunity to approve, on an advisory basis, the frequency of future votes on the company's executive compensation. Agenda item four concerns the ratification of the selection of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for 2026. Your board recommends a vote for agenda items two and four, and for every one year for agenda item three. At this point, we are taking questions regarding proposals one through four. As a reminder, we will limit questions if they become repetitive or are not related to proposals one through four. The first question we have received: Are dividends automatically reinvested? Quarterly cash dividends that are paid to common stockholders are not automatically reinvested.
If you wish to reinvest your cash dividends, you should contact Computershare, Qnity's transfer agent, if your shares are registered in your name. If your shares are held in street name, please contact your broker.
The next question we received: how does one become a member of the board? The board has adopted guidelines that are used by the Nomination and Governance Committee and the board in evaluating candidates for board membership in order to ensure a highly qualified board. The Nomination and Governance Committee selects candidates and makes recommendations to the board for election as directors and has adopted a process for identifying new director candidates, which is outlined in our proxy statement. Recommendations may be received from various sources, including current or former directors, a search firm retained by the Nomination and Governance Committee to assist in identifying and evaluating potential candidates, stockholders, company executives, and by self-nomination. Stockholder suggestions of candidates to consider as potential board members should be sent to the Nomination and Governance Committee through the office of the corporate secretary at Qnity's headquarters in Wilmington, Delaware.
The third question we received: Has the conflict in the Middle East had any material effect on our company? I will turn this over to Jon Kemp for a response.
Thank you, Lauren. As we discussed during our first quarter earnings call, we are monitoring the situation in the Middle East carefully. We have not experienced any material disruptions from a supply chain point of view. We have experienced some cost inflation, primarily related to logistics, which we have been able to successfully offset through disciplined pricing actions.
Thank you for your questions. We will be closing the polls momentarily. Each of these proposals is deemed to have been properly brought before the meeting, and the need for a second has been waived by the company. The polls have now closed. The inspector of election will now tabulate all votes. The inspector has provided the preliminary results of voting. Subject to final tabulation, we report the following preliminary results. All nominees for director have been elected. Stockholders have approved the advisory resolution on the company's executive compensation. Stockholders have approved holding an advisory vote on the company's executive compensation every one year. The appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for 2026 has been ratified.
The final voting results will become part of the record of the meeting and will be reported on a Form 8-K to be filed with the SEC in connection with the matters voted upon at this meeting. All items of business have now been completed. Thank you to our stockholders for joining us today. The meeting is now adjourned.
This concludes today's presentation. You may disconnect.