IntrinsicIntrinsic
← All summaries

DOW INC.

DOW
Financials & Chart →

Business Summary

Dow Inc. is a leading materials science company operating globally in high-growth markets such as packaging, infrastructure, mobility, and consumer applications. The company leverages its global breadth, asset integration, scale, customer-focused innovation, and strong business positions to achieve profitable growth and advance a sustainable future. Dow operates 91 manufacturing sites across 29 countries and employs approximately 34,600 people . In 2025, Dow reported net sales of $40 billion .

The company's core business model revolves around generating revenue through the production and sale of a broad range of chemical products and materials science solutions. Revenue is primarily derived from product sales, which constituted 97% of total revenue in 2025, with the remainder from insurance operations and licensing of patents and technologies. The company serves manufacturers and distributors, with payment terms typically ranging from 30 to 60 days after invoicing. Long-term contracts exist, some spanning multiple years, including those for continuous delivery of goods like feedstocks, where revenue is recognized based on amounts billable to the customer.

The Packaging & Specialty Plastics operating segment comprises two integrated global businesses: Hydrocarbons & Energy and Packaging and Specialty Plastics. This segment utilizes a broad polyolefin product portfolio, proprietary catalyst and manufacturing process technologies, serving markets such as food and specialty packaging, industrial and consumer packaging, health and hygiene, and mobility. In 2025, this segment generated net sales of $19,970 million . The Hydrocarbons & Energy business is a leading global producer of ethylene, propylene, and aromatics, which are key chemical building blocks primarily consumed internally or sold at market-based prices. The Packaging and Specialty Plastics business is a leader in polyethylene and other ethylene derivatives like polyolefin elastomers and EPDM rubber, serving diverse end-markets.

The Industrial Intermediates & Infrastructure operating segment consists of Industrial Solutions and Polyurethanes & Construction Chemicals. These businesses develop intermediate chemicals and customized materials for markets including appliances, coatings, furniture, building and construction, mobility, and oil and gas. In 2025, this segment recorded net sales of $11,163 million . Industrial Solutions provides solutions for manufacturing consumer and industrial goods, producing purified ethylene oxide, amines, solvents, glycol ethers, and alkoxylates. Polyurethanes & Construction Chemicals is the world's largest producer of propylene oxide, propylene glycol, and polyether polyols, also providing chlorine and caustic soda through its Chlor-Alkali & Vinyl (CAV) business, and cellulose ethers and acrylic emulsions for construction materials.

The Performance Materials & Coatings operating segment includes Coatings & Performance Monomers and Consumer Solutions, delivering solutions to consumer, infrastructure, and mobility end-markets. This segment primarily uses acrylics-, cellulosics-, and silicone-based technology platforms. In 2025, this segment achieved net sales of $8,134 million . Coatings & Performance Monomers produces ingredients and additives for paints and coatings, as well as acrylics-based building blocks for various products. Consumer Solutions offers performance-enhancing products for consumer and electronics, home and personal care, industrial, and mobility markets, and produces silicon metal, siloxanes, and intermediates.

For the fiscal year ended December 31, 2025, Dow Inc. reported total net sales of $39,968 million , a decrease of 7% from $42,964 million in 2024. The company's cost of sales was $37,435 million , resulting in a gross margin of 6.3% (calculated as ($39,968 million - $37,435 million) / $39,968 million). Operating income (loss) before income taxes was a loss of $2,511 million . Net income (loss) available for Dow Inc. common stockholders was a loss of $2,623 million , leading to a diluted EPS of -$3.70 . Free Cash Flow, a non-GAAP measure, was -$1,417 million . At December 31, 2025, cash and cash equivalents stood at $3,816 million , total gross debt was $18,161 million , and net debt (non-GAAP) was $13,960 million .

Comparing 2025 to 2024, net sales decreased by 7% , primarily driven by a 7% decrease in local price across all operating segments and geographic regions. Volume remained flat . Packaging & Specialty Plastics net sales decreased by 8% , Industrial Intermediates & Infrastructure by 6% , and Performance Materials & Coatings by 5% . Operating EBIT for Packaging & Specialty Plastics decreased by $1,546 million to $827 million , while Industrial Intermediates & Infrastructure shifted from an Operating EBIT of $125 million in 2024 to a loss of $561 million in 2025. Performance Materials & Coatings saw a slight decrease in Operating EBIT from $318 million to $306 million . The company also recognized $1,856 million in restructuring, goodwill impairment, and asset related charges - net in 2025, significantly higher than $103 million in 2024.

During 2025, Dow Inc. undertook several significant operational developments. The company announced targeted cost actions to reduce structural costs by $1 billion over the next two years, including a workforce reduction of approximately 1,500 roles . Capital expenditures for 2025 were adjusted to $2.5 billion from an original plan of $3.5 billion , with the Fort Saskatchewan Path2Zero project completion delayed by two years. The company approved restructuring actions to rationalize its global asset footprint, including shutting down an ethylene cracker in Böhlem, Germany, by the end of 2027 , chlor-alkali and vinyl assets in Schkopau, Germany, by the end of 2027 , and a basics siloxanes plant in Barry, United Kingdom, by mid-year 2026 . Dow completed the sale of 40% of its membership interests in Diamond Infrastructure Solutions for initial cash proceeds of approximately $2.4 billion , later increasing to 49% for total proceeds of approximately $3 billion . The company also sold its Telone™ soil fumigation product line for $121 million and its ownership interest in DowAksa for $121 million .

Business Outlook

Team Dow anticipates continued volume growth in Packaging & Specialty Plastics, driven by an increase in global polyethylene demand and the full-year benefit of the new polyethylene unit on the U.S. Gulf Coast, which became operational in the second half of 2025. Local prices in this segment are expected to be influenced by market supply and demand dynamics and competitor capacity rationalizations. In Industrial Intermediates & Infrastructure, improved volume growth is projected due to the full-year impact of recent investments in alkoxylation capacity and underlying growth in key end-markets, which will more than offset volume loss from the shutdown of a propylene oxide and propylene glycol plant in Freeport, Texas. Local prices in this segment are expected to remain similar to 2025 levels. For Performance Materials & Coatings, the company will continue to prioritize key end-markets in performance silicones, expecting demand in consumer and electronics to benefit from ongoing investments in artificial intelligence, data centers, and advanced devices, while other sectors may face a more challenging environment. Pricing for specialty products is anticipated to remain relatively stable, with coatings market conditions expected to improve in the second half of 2025 due to global central bank rate cut activity.

The company's Transform to Outperform initiative, approved on January 26, 2026, is expected to deliver at least $2 billion in near-term Operating EBITDA improvement from productivity gains and growth, in addition to the $1 billion structural cost reductions announced in the first quarter of 2025. This program aims to simplify Dow's operating model, reduce its cost structure, and enable faster growth through breakthrough improvements and streamlined end-to-end processes. The company expects to incur one-time costs and charges related to Transform to Outperform ranging from $1.1 billion to $1.5 billion , including severance and related benefit costs of $600 million to $800 million associated with approximately 4,500 roles .

Operational outlook includes an expected increase in planned maintenance turnaround spending of approximately $200 million compared to 2025. The company will complete the shutdown of a basics siloxanes plant in Barry, United Kingdom, by mid-year 2026 to rationalize its global footprint. The Fort Saskatchewan Path2Zero project, a key growth initiative, is now expected to have its first and second phases start up by the end of 2029 and 2030, respectively , a two-year delay from previous timelines.

Planned capital allocation for 2026 includes capital expenditures of approximately $2.5 billion , which incorporates spending related to the Fort Saskatchewan Path2Zero project, expected to average approximately $1.5 billion annually through 2030. Cash contributions to pension plans are expected to be approximately $180 million . Cash outflows related to the 2025 Restructuring Program are expected to be approximately $260 million , and cash outflows associated with Transform to Outperform are expected to be approximately $0.8 billion to $1.0 billion . The company also anticipates cash inflows of approximately $1.3 billion related to the judgment with Nova Chemicals Corporation.

Risk Factors

Dow faces significant risks from climate change, including more frequent severe weather events, water scarcity, and evolving regulatory responses, which could negatively impact operations, increase costs, and harm its reputation. Macroeconomic risks include challenging market conditions due to slower global GDP growth, industry overcapacity, and geopolitical uncertainties, which have led to decreased sales and margin compression. The company is also exposed to volatility in energy and raw material prices, which account for a substantial portion of production costs. Legal and regulatory risks encompass the costs of complying with extensive environmental laws, potential liabilities from asbestos-related matters (Union Carbide's total asbestos-related liability was $708 million at December 31, 2025), and increasing concerns about plastic waste leading to demand for substitute materials and more restrictive regulations. Operational and strategic risks include the uncertainties associated with manufacturing operations and joint ventures in emerging regions, disruptions to supply chains and infrastructure, and the ongoing threat of cybersecurity incidents, which could compromise proprietary information or disrupt operations. An impairment of goodwill, such as the $690 million charge related to the Polyurethanes & Construction Chemicals reporting unit in 2025, could also negatively impact financial results.

Management Priorities

Management's message to shareholders conveys a focus on navigating challenging market conditions, delivering near-term cost savings, and reinforcing the company's long-standing cultural values of safety and reliability. The company is committed to its "Transform to Outperform" initiative, which is expected to deliver at least $2 billion in near-term Operating EBITDA improvement by simplifying the operating model, reducing the cost structure, and driving faster growth. This is accretive to the $1 billion structural cost reductions announced in the first quarter of 2025. Management has also adjusted capital allocation in response to macroeconomic volatility, including delaying the Fort Saskatchewan Path2Zero project, with the first and second phases now expected to start up by the end of 2029 and 2030, respectively . The Board reduced the quarterly dividend by 50% to $0.35 per share starting in the third quarter of 2025, reflecting a balanced capital allocation approach and enhanced financial flexibility. The three strategic priorities emphasized are delivering near-term cost savings, simplifying the operating model for productivity gains and consistent growth, and maintaining financial flexibility through disciplined capital allocation.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — About Dow
  2. [2] Item 7, MD&A — Overview
  3. [3] Item 3, Revenue — Disaggregation of Revenue
  4. [4] Item 7, MD&A — Packaging & Specialty Plastics
  5. [5] Item 7, MD&A — Industrial Intermediates & Infrastructure
  6. [6] Item 7, MD&A — Performance Materials & Coatings
  7. [7] Item 7, MD&A — Summary of Sales Results
  8. [8] Item 7, MD&A — 2025 Versus 2024
  9. [9] Item 7, MD&A — Summary of Sales Results
  10. [10] Item 7, MD&A — Cost of Sales
  11. [11] Item 7, MD&A — Results of Operations
  12. [12] Item 7, MD&A — Net Income (Loss) Available for Common Stockholder(s)
  13. [13] Item 8, Consolidated Statements of Income
  14. [14] Item 7, MD&A — Reconciliation of Non-GAAP Cash Flow Measures
  15. [15] Item 7, MD&A — Liquidity and Capital Resources
  16. [16] Item 7, MD&A — Total Debt at Dec 31
  17. [17] Item 7, MD&A — Total Debt at Dec 31
  18. [18] Item 7, MD&A — Sales Variances by Operating Segment and Geographic Region
  19. [19] Item 7, MD&A — 2025 Versus 2024
  20. [20] Item 7, MD&A — Packaging & Specialty Plastics
  21. [21] Item 7, MD&A — Packaging & Specialty Plastics
  22. [22] Item 7, MD&A — Industrial Intermediates & Infrastructure
  23. [23] Item 7, MD&A — Industrial Intermediates & Infrastructure
  24. [24] Item 7, MD&A — Performance Materials & Coatings
  25. [25] Item 7, MD&A — Performance Materials & Coatings
  26. [26] Item 7, MD&A — Overview
  27. [27] Item 7, MD&A — Overview
  28. [28] Item 7, MD&A — Overview of Macroeconomic Conditions and the Company’s Response
  29. [29] Item 7, MD&A — Overview of Macroeconomic Conditions and the Company’s Response
  30. [30] Item 7, MD&A — Overview of Macroeconomic Conditions and the Company’s Response
  31. [31] Item 7, MD&A — Overview of Macroeconomic Conditions and the Company’s Response
  32. [32] Item 7, MD&A — Overview of Macroeconomic Conditions and the Company’s Response
  33. [33] Item 7, MD&A — Overview of Macroeconomic Conditions and the Company’s Response
  34. [34] Item 7, MD&A — Overview of Macroeconomic Conditions and the Company’s Response
  35. [35] Item 7, MD&A — Other notable events and highlights from the year ended December 31, 2025
  36. [36] Item 7, MD&A — Other notable events and highlights from the year ended December 31, 2025
  37. [37] Item 7, MD&A — Other notable events and highlights from the year ended December 31, 2025
  38. [38] Item 7, MD&A — Other notable events and highlights from the year ended December 31, 2025
  39. [39] Item 7, MD&A — Other notable events and highlights from the year ended December 31, 2025
  40. [40] Item 7, MD&A — Other notable events and highlights from the year ended December 31, 2025
  41. [41] Item 7, MD&A — Outlook
  42. [42] Item 7, MD&A — Outlook
  43. [43] Item 7, MD&A — Outlook
  44. [44] Item 7, MD&A — Outlook
  45. [45] Item 7, MD&A — Outlook
  46. [46] Item 7, MD&A — Outlook
  47. [47] Item 7, MD&A — Outlook
  48. [48] Item 7, MD&A — Projected Sources and Uses of Cash
  49. [49] Item 7, MD&A — Cash Flows from Investing Activities
  50. [50] Item 7, MD&A — Projected Sources and Uses of Cash
  51. [51] Item 7, MD&A — Projected Sources and Uses of Cash
  52. [52] Item 7, MD&A — Projected Sources and Uses of Cash
  53. [53] Item 7, MD&A — Projected Sources and Uses of Cash
  54. [54] Item 1A, Risk Factors — Litigation
  55. [55] Item 7, MD&A — 2025 Goodwill Impairment
  56. [56] Item 7, MD&A — Overview of Macroeconomic Conditions and the Company’s Response
  57. [57] Item 7, MD&A — Dividends Paid for the Years Ended Dec 31

Analysis on 5/22/2026