Perimeter Solutions Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Dan Kutz - Morgan Stanley - Analyst : Hey, thanks for that. Good morning. I wanted to ask, I think you guys have kind of quantified this in the past. But when you think about -- when you speak to kind of a range of normal wildfire activity or acres burned, can you help us -- can you remind us how you guys think about that? Is it kind of over the course of the year, I think I remember like a 6 million to 7 million US Lower-48 acres burn range on one of your past slide decks? Or is it kind of a percentage versus a trailing 5 or 10 year trend? Just hoping that you could -- as we're trying to think through what it means when you say within a normal range, I was just hoping you could share a little bit more color on how you guys think about that. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 07, 2025 / 12:30PM, PRM.N - Q2 2025 Perimeter Solutions Inc Earnings Call

Question: Dan Kutz - Morgan Stanley - Analyst : Awesome. Super helpful. And then maybe -- so a question has come up. If you look empirically, there does seem to be somewhat of an inverse relationship between a revenue per acre burned or EBITDA per acre burned if you did try and isolate just the US. Lower 48 components of those revenue streams versus the US ex Alaska acres burned. There does seem to be somewhat of an inverse correlation over time now the direction of travel for those metrics has been higher has been an improvement over time in terms of the dollar number of EBITDA or revenue per acre burn, but still there does seem to be somewhat of a negative correlation. I was hoping if you could help us understand, I mean, a, confirm if that phenomenon is true or just kind of noise in the data? And then b, what -- if so what some of the drivers are [et cetera] that relationship? Thank you.

Question: Dan Kutz - Morgan Stanley - Analyst : Yeah, that makes a ton of sense. And maybe if I could squeeze one last one in on the resource availability point. We've seen a ton of different headlines on higher fire suppression spending, budget allocations lower. I've seen some headlines about California getting some, I believe, new air tankers. I was wondering if you could just kind of -- you guys are obviously super close to this. I was wondering if you could kind of give us some of the highlights of how some of the upstream factors that would drive resource availability have evolved maybe since last quarter or year-to-date? Thank you.

Question: Dan Kutz - Morgan Stanley - Analyst : Awesome. Really, helpful. Thank you both, very much. Congrats on a great quarter, and I'll turn it back.

Question: Josh Spector - UBS - Analyst : Hey, hi, good morning, guys. I was wondering if you could talk about kind of the sustainability of what you did in 2Q in fire safety. I mean the margins are kind of above what we've assumed for peak margins in 3Q. The incremental margin looks like it was pretty much 100% year-on-year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 07, 2025 / 12:30PM, PRM.N - Q2 2025 Perimeter Solutions Inc Earnings Call So just as we think forward and we're saying 2Q was kind of a normal-ish fire season in terms of acres burned, is this something you build off of? Or is there anything you would call out as maybe onetime helping you within the quarter?

Question: Josh Spector - UBS - Analyst : So then how would you help us think about what you should be doing in a peak quarter in 3Q? Is the incremental margin much higher than in the past? Should you be much higher than the mid-60s percent margins? Any help there?

Question: Josh Spector - UBS - Analyst : I'd expect nothing less. So shifting gears. On the specialty side, honestly, I don't know if we would have really known about the outages unless you talked about them, considering what the performance was in the quarter. So I was wondering if you could pick apart the moving pieces there. In terms of the $5 million-ish growth in EBITDA you've had year-over-year, what was the impact that you had from the outages and the poor operating performance at that one facility? How much was growth in base specialty? And how much is like the build-out of IMS, if you could help us kind of frame that.

Question: Josh Spector - UBS - Analyst : Okay. I mean, I guess if I could try again just on the Sauget impact, I mean, is it a $1 million, $2 million impact? Just trying to think about what we should be baking in when you say go forward, there's going to be an impact in the next couple of quarters.

Question: Josh Spector - UBS - Analyst : Okay. No, thanks for that. And a couple of other follow-ups if I can go through them. I guess, first, on the $20 million payment to resolve the dispute with Compass, is that primarily just intangibles and the ability to maintain your formulations? Is there any assets or anything there you'd call out as part of that?

Question: Josh Spector - UBS - Analyst : Okay. Thanks for that. And then last, just another follow-up around kind of the US wildfire management tactics here. I mean you talked about helping with plane availability and that being a factor. I know for years, you guys have been talking about trying to maybe change how you're paid on some of your suppressants, make sure you guys get more of maybe a fixed payment in the slower parts of the year to start or you have a sliding scale, I think, in place now to help you maintain your profitability. Is there any changes you foresee with your basically contract structure with the government around this to help enable more investments, profitability, et cetera, through any of this? Or are you thinking about it more in terms of the aerial fleet as where you see potential changes?

Question: Josh Spector - UBS - Analyst : Understood. Thank you very much.