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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

As used in this Annual Report on Form 10-K (the “Report”), the terms “Quaker Houghton,” the “Company,” “we,” and “our” refer to Quaker Chemical Corporation (doing business as Quaker Houghton), its subsidiaries, and associated companies, unless the context otherwise requires.

Executive Summary

Quaker Houghton is the global leader in industrial process fluids. With a presence around the world, including operations in over 25 countries, our customers include thousands of the world’s most advanced and specialized steel, aluminum, automotive, aerospace, offshore, container, mining, and metalworking companies. Our high-performing, innovative and sustainable solutions are backed by best-in-class technology, deep process knowledge, and customized services. Quaker Houghton is headquartered in Conshohocken, Pennsylvania, located near Philadelphia in the U.S.

Net sales of $1,888.6 million in 2025 increased 3% compared to $1,839.7 million in 2024. The net sales increase of $48.9 million, or 3%, is primarily due to contributions from acquisitions of approximately 4% and favorable foreign currency translation of approximately 1%, partially offset by decreases in selling price and product mix of approximately 2%. Organic sales volumes remained consistent in 2025 compared to 2024, primarily as a result of continued new business wins across all segments, particularly Asia/Pacific, which was offset by a continuation of soft end market conditions including the uncertainty caused by tariffs, particularly in the Americas and EMEA segments. The decrease in selling price and product mix was primarily attributable to the impact of the mix of products, services and geographies and the impact of our index-based customer contracts.

The Company reported a net loss of $2.5 million or $0.14 net loss per diluted share in 2025, compared to a net income of $116.6 million or $6.51 earnings per diluted share in 2024. The net loss primarily reflects an $88.8 million non-cash impairment charge to write down the remaining value of goodwill associated with the Company’s EMEA reportable segment. Excluding non-recurring and non-core items, the Company’s current year non-GAAP net income and non-GAAP earnings per diluted share were $123.2 million and $7.02, respectively, compared to $133.5 million and $7.44, respectively, in 2024. The decrease in current year Non-GAAP earnings was primarily driven by lower gross margins and an increase in selling, general and administrative expenses (“SG&A”), partially offset by an increase in net sales. The Company generated adjusted EBITDA of $299.2 million compared to $310.9 million in 2024, as the increase in net sales was offset by lower operating margins and an increase in SG&A. Non-GAAP net income, non-GAAP earnings per diluted share and adjusted EBITDA are non-GAAP measures. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Consolidated—Use of Non-GAAP Financial Measures” for the definition and reconciliation of these measures to their most comparable GAAP measures.

The Company’s 2025 operating performance in each of its three reportable segments: (i) Americas; (ii) EMEA; and (iii) Asia/Pacific, reflects similar drivers to that of the Company’s consolidated performance. The increase in operating earnings for the Asia/Pacific segment compared to the prior year was primarily driven by an increase in net sales and further contribution from acquisitions, partially offset by lower segment operating margins. The decrease in operating earnings for the EMEA segment compared to the prior year was primarily driven by lower segment operating margins, partially offset by an increase in net sales. The decrease in operating earnings for the America segment compared to the prior year was primarily driven by a decrease in net sales and a decrease in segment operating margins. Additional details of segment operating performance are provided in the Reportable Segments Review in the Operations section of this Item below.

Net cash flows provided by operating activities were $136.5 million in 2025 compared to $204.6 million in 2024. The decrease in net operating cash flows was primarily driven by lower operating performance, higher cash outflows from restructuring activities and higher outflows from working capital in 2025 compared to 2024. The key drivers of the Company’s operating cash flow and working capital are further discussed in the Company’s Liquidity and Capital Resources section of this Item 7, below.

The Company performed well in 2025, making progress on its long-term financial and strategic initiatives. In addition, the Company results in 2025 reflect an increase in sales volumes in the Asia/Pacific segment and new business wins across all segments, despite a continuation of challenging end market conditions, particularly in the Americas and EMEA segments.

On July 4, 2025, H.R. 1, commonly known as the One Big Beautiful Bill Act (the “OBBB”), was signed into law. The OBBB includes significant changes to the federal corporate tax provisions and extends certain otherwise expiring provisions of the 2017 Tax Cuts and Jobs Act. Among other things, the legislation restores 100% bonus depreciation for eligible property, reinstates expensing for domestic research and experimental expenditures, imposes new limitations on interest expense deductibility, and expands disallowed deductions for certain employee remuneration. The legislation has multiple effective dates, with certain provisions effective in 2025 and other provisions implemented through 2027. The provisions effective in 2025 do not have a material impact to our consolidated financial statements. The Company is continuing to evaluate the potential impacts of the provisions effective in 2026 and 2027.

Critical Accounting Policies and Estimates

Quaker Houghton’s discussion and analysis of its financial condition and results of operations are based on its consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to customer sales incentives, product returns, credit losses, inventories, property, plant and equipment (“PP&E”), investments, goodwill, intangible assets, income taxes, business combinations, and restructuring. These estimates reflect historical experience as well as our best judgment about current and/or future economic and market conditions and their effects and various other assumptions that are believed to be reasonable based on currently available information, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. However, actual results may differ materially from these estimates under different assumptions or conditions.

Quaker Houghton believes the following critical accounting policies describe the more significant judgments and estimates used in the preparation of its consolidated financial statements:

Accounts receivable and inventory exposures: The Company establishes allowances for credit losses for estimatedlosses resulting from the inability of its customers to make required payments. If the financial condition of the Company’s customers was to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. As part of our terms of trade, we may custom manufacture products for certain large customers and/or may ship products on a consignment basis. Further, a significant portion of our revenue is derived from sales to customers in industries where companies have previously experienced financial difficulties. If a significant customer bankruptcy occurs, then we must judge the amount of proceeds, if any, that may ultimately be received through the bankruptcy or liquidation process. These matters may increase the Company’s exposure should a bankruptcy occur and may require a write down or a disposal of certain inventory as well as the failure to collect receivables. Reserves for customers filing for bankruptcy protection are established based on a percentage of the amount of receivables outstanding at the bankruptcy filing date. However, initially establishing this reserve and the amount thereof is dependent on the Company’s evaluation of likely proceeds to be received from the bankruptcy process, which could result in the Company recognizing minimal or no reserve at the date of bankruptcy. We generally reserve for large and/or financially distressed customers on a specific review basis, while a general reserve is maintained for other customers based on historical experience. The Company’s consolidated allowance for credit losses was $14.9 million and $13.6 million as of December 31, 2025 and 2024, respectively. The Company recorded expense to increase its provision for credit losses by $0.7 million, $2.1 million and $1.3 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Tax exposures, uncertain tax positions and valuation allowances: The Company records expenses and liabilities for taxesbased on estimates of amounts that will be determined as deductible or taxable in tax returns filed in various jurisdictions. The filed tax returns are subject to audit, which often occur several years subsequent to the date of the financial statements. Disputes or disagreements may arise during audits over the timing or validity of certain items, such as taxable income or deductions, which may not be resolved for extended periods of time. The Company also evaluates uncertain tax positions on all income tax positions taken on previously filed tax returns or expected to be taken on a future tax return in accordance with FIN 48, which prescribes the recognition threshold and measurement attributes for financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return and, also, whether the benefits of tax positions are probable or if they are more likely than not to be sustained upon audit based upon the technical merits of the tax position. For tax positions that are determined to be more likely than not to be sustained upon audit, the Company recognizes the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement in the financial statements. For tax positions that are not determined to be more likely than not sustained upon audit, the Company does not recognize any portion of the benefit in its financial statements. In addition, the Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Also, the Company nets its liability for unrecognized tax benefits against deferred tax assets related to net operating losses or other tax credit carryforward on the basis that the uncertain tax position is settled for the presumed amount at the balance sheet date.

The Company also records valuation allowances on a quarterly basis to reduce its deferred tax assets to the amount that is more likely than not to be realized. While the Company has considered future taxable income and assesses the need for a valuation allowance, in the event the Company were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase income in the period such determination was made. Likewise, should the Company determine that it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made. Both determinations could have a material impact on the Company’s financial statements.

Pursuant to the Tax Cuts and Jobs Act (“U.S. Tax Reform”), the Company recorded a $15.5 million transition tax liability for U.S. income taxes on the undistributed earnings of non-U.S. subsidiaries. As of December 31, 2025, the $15.5 million transition liability has been fully paid. The Company may also be subject to other taxes, such as withholding taxes and dividend distribution taxes, if these undistributed earnings are ultimately remitted to the U.S. As of December 31, 2025, the Company has a deferred tax liability of $8.5 million, which primarily represents the estimate of the non-U.S. taxes the Company will incur to remit certain previously taxed earnings to the U.S. It is the Company’s current intention to reinvest its future undistributed earnings of non-U.S. subsidiaries to support working capital needs and certain other growth initiatives outside of the U.S. The amount of such undistributed earnings at December 31, 2025 was approximately $429.2 million. Any tax liability which might result from ultimate remittance of these earnings is expected to be substantially offset by foreign tax credits (“FTCs”) (subject to certain limitations), however, certain withholding taxes could apply. It is currently impractical to estimate any such incremental tax expense. See Note 10, Income Taxes, to the Consolidated Financial Statements for more information.

Business Combinations: The Company accounts for business combinations under the acquisition method ofaccounting. This method requires the recording of acquired assets, including separately identifiable intangible assets, at their acquisition date fair values. Any excess of the purchase price over the estimated fair value of the identifiable net assets acquired is recorded as goodwill. The determination of the estimated fair value of assets acquired requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to projected revenue growth rates, gross margins, and operating margins, the weighted average cost of capital (“WACC”), royalty rates, asset lives and market multiples, among other items. When necessary, the Company consults with external advisors to help determine fair value. For non-observable market values, the Company may determine fair value using acceptable valuation principles, including the excess earnings, relief from royalty, lost profit or cost methods. The Company engaged an independent third-party valuation specialist to assist with the allocation of the total purchase price for the acquisition of Dipsol Chemicals Co., Ltd. and its subsidiaries, (“Dipsol”) to the fair value of the net assets acquired. The preliminary fair value of customer-related intangible assets was determined using the multi-period excess earnings method, while the preliminary fair value of product technology and trademarks were determined using the relief from royalty method. These valuation methodologies required the use of several assumptions and estimates, including, but not limited to, the customer attrition rate, the discount rate, net sales attributable to existing customers, the economic life, the EBITDA margin, and the contributory asset charge for the customer-related intangible assets, and the discount rate, the projected revenue, the royalty rate, and the economic life for the product technology and trademark intangible assets. The preliminary fair value of inventory was determined using the net realizable value approach, which includes the use of several estimates, including the selling prices and current replacement cost as of the valuation date. The preliminary fair value of land was determined using a sales comparison approach, which includes the use of several assumptions and estimates, including reproduction/replacement cost, while the preliminary fair value of building and improvements and personal property was determined using the cost approach, which includes the use of several assumptions and estimates, including the building condition, floor value, physical deterioration, functional and economic obsolescence, reproduction/replacement cost, and remaining useful lives. For further information see Note 2, Business Combinations, to the Consolidated Financial Statements.

Goodwill and other intangible assets: The Company amortizes definite-lived intangible assets on a straight-line basis over their useful lives. Goodwill and intangible assets that have indefinite lives are not amortized and are required to be assessed at least annually for impairment. The Company completes its annual goodwill and indefinite-lived intangible asset impairment test during the fourth quarter of each year, or more frequently if triggering events indicate a possible impairment. As part of annual goodwill impairment testing, the Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. The Company’s evaluation of qualitative factors includes an assessment of relevant facts, events, and circumstances of a reporting unit including but not limited to macroeconomic conditions, industry and market conditions, overall finance performance, cost factors that have a negative effect on earnings and cash flows, sustained decreases in the Company’s share price, and etc. The Company will perform a quantitative test when qualitative factors alone are not sufficient to conclude whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the Company performs a quantitative test, an impairment loss will be recognized for the amount by which the carrying value of the reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

The Company’s consolidated goodwill at December 31, 2025 and 2024 was $501.7 million and $518.9 million, respectively. As of December 31, 2025 and 2024, the Company had indefinite-lived intangible assets for trademarks and intangibles totaling $201.2 million and $185.3 million, respectively.

During the second quarter of 2025, the Company concluded that the negative impacts of the lower than projected financial performance, driven by the continuation of soft end market conditions, as well as an increase in the Company’s cost of capital, driven by uncertainty around the potential negative impacts of tariffs, represented a triggering event for the Company’s EMEA reporting unit and the associated goodwill. In completing a quantitative goodwill impairment test, the Company compared the reporting unit’s fair value, based on future discounted cash flows, to its carrying value in order to determine if an impairment of goodwill exists. The estimates of future discounted cash flows involve considerable judgment and are based upon certain significant assumptions including the WACC as well as projected EBITDA, which includes assumptions related to revenue growth rates, gross margin levels and operating expenses. As a result of the impact of the uncertainty around tariffs, and continued soft end market conditions driving lower current year EMEA earnings and a decline in projected future EMEA earnings, as well as an increase in the WACC assumption utilized in the Company’s 2024 annual impairment assessment, the Company concluded that the estimated fair value of the EMEA reporting unit was less than its carrying value. As a result, a pre-tax, non-cash impairment charge of $88.8 million ($86.7 million after-tax) to write down the remaining carrying value amount of the EMEA reporting unit Goodwill was recorded in the second quarter of 2025, reflected in “Impairment charges” in the Consolidated Statements of Operations for the year ended December 31, 2025.

In the fourth quarter of fiscal year 2025, the Company performed its annual impairment assessment by applying the quantitative assessment and concluded that it was more likely than not that the fair value of each reporting unit was greater than its carrying value.

Pension and Postretirement benefits: The Company provides certain defined benefit pension and other postretirement benefitsto current employees, former employees and retirees. Independent actuaries, in accordance with U.S. GAAP, perform the required valuations to determine benefit expense and, if necessary, non-cash charges to equity for additional minimum pension liabilities. Critical assumptions used in the actuarial valuation include the weighted average discount rate, which is based on applicable yield curve data, including the use of a split discount rate (spot-rate approach) for the U.S. plans and certain foreign plans, rates of increase in compensation levels, and expected long-term rates of return on assets.

Recently Issued Accounting Standards

See Note 3, Recently Issued Accounting Standards, to the Consolidated Financial Statements for more information and for a discussion regarding recently adopted accounting standards and recently issued accounting standards not yet adopted.

Liquidity and Capital Resources

The Company had cash and cash equivalents of $179.8 million and $188.9 million at December 31, 2025 and 2024, respectively. Cash held by subsidiaries in foreign countries was approximately $171.4 million and $180.6 million at December 31, 2025 and 2024, respectively. The $9.1 million decrease in cash and cash equivalents was the net result of $214.1 million of cash used in investing activities, largely offset by $136.5 million of cash provided by operating activities, $61.8 million provided by financing activities, and a favorable impact of foreign currency translation of approximately $6.7 million.

Net cash flows provided by operating activities were $136.5 million in 2025 compared to $204.6 million in 2024. The decrease in net operating cash flow year-over-year reflects lower operating performance in 2025 compared to 2024, higher outflows from restructuring activities, and an increase in net cash outflows from working capital, primarily due to higher outflows of accounts payable and accrued liabilities due to timing of payments and higher outflows for the purchases of inventories.

Net cash flows used in investing activities were $214.1 million in 2025 compared to $76.4 million in 2024. The increase in cash used in investing activities year-over-year is primarily the result of $164.2 million of payments, net of cash acquired, in the current year related to the acquisitions of Chemical Solutions & Innovations (Pty) Ltd. (“CSI”), Dipsol, and Natech, Ltd., (“Natech”), a $14.1 million increase in payments relating to capital expenditures, and $3.0 million of interest received from the fixed-for-fixed cross-currency swaps designated as net investment hedges. The prior year included $39.3 million of payments, net of cash acquired, related to the acquisitions of I.K.V. Tribologie IKVT and its subsidiaries (“IKV”) and the Sutai Group (“Sutai”). See Note 2, Business Combinations, to the Consolidated Financial Statements for further information about business acquisitions.

Net cash flows provided by financing activities were $61.8 million in 2025 compared to net cash flows used in financing activities of $122.7 million in 2024. The increase in net cash inflows was primarily driven by $174.2 million of net borrowings on the Company’s revolving credit facility in the current year, an increase of $156.3 million compared to the prior year, which the Company used for the purpose of funding the purchase price of the Dipsol acquisition as well as for other corporate purposes. In addition, the Company made term loan debt payments of approximately $34.7 million in 2025, a $22.5 million decrease in payments compared to the prior year. The Company also made payments of approximately $41.5 million for repurchases of the Company’s common stock under its share repurchase program in the current year, a $7.7 million decrease compared to the prior year.

During June 2022, the Company and its wholly owned subsidiary, Quaker Houghton B.V., as borrowers, Bank of America, N.A., as administrative agent, U.S. Dollar swing line lender and letter of credit issuer, Bank of America Europe Designated Active Company, as Euro Swing Line Lender, certain guarantors and other lenders entered into an amendment to its primary credit facility (the “Original Credit Facility”). The amended credit facility (“Credit Facility”) established (A) a new $150.0 million Euro equivalent senior secured term loan (the “Euro Term Loan”), (B) a new $600.0 million senior secured term loan (the “U.S. Term Loan”), and (C) a new $500.0 million senior secured revolving credit facility (the “Revolver”), each maturing in June 2027. The Company has the right to increase the amount of the Credit Facility by an aggregate amount not to exceed the greater of $300.0 million or 100% of Consolidated EBITDA, subject to certain conditions including the agreement to provide financing by any lender providing such increase.

As of December 31, 2025, the Company had Credit Facility borrowings outstanding of $859.7 million. The Company’s other debt obligations are primarily industrial development bonds, bank lines of credit and municipality-related loans, which totaled $11.5 million as of December 31, 2025. Total unused capacity under these arrangements as of December 31, 2025 was approximately $57.4 million. The Company’s total net debt as of December 31, 2025 was $691.4 million, which consists of total borrowings of $871.2 million less cash and cash equivalents of $179.8 million. The Credit Facility contains affirmative and negative covenants, financial covenants and events of default. Financial covenants contained in the Credit Facility include a consolidated interest coverage ratio test and a consolidated net leverage ratio test. As of December 31, 2025, the Company was in compliance with all of the Credit Facility covenants. Refer to the description of the Company’s primary Credit Facility in Note 19, Debt, to the Consolidated Financial Statements for more information about the covenants and events of default.

The weighted average variable interest rate incurred on the outstanding borrowings under the Credit Facility during the twelve months ended December 31, 2025 was approximately 5.2%. As of December 31, 2025, the interest rate on the outstanding borrowings under the Credit Facility was approximately 4.7%. As part of the Credit Facility, the Company is required to pay an annual commitment fee ranging from 0.150% to 0.275% related to unutilized commitments under the Revolver, depending on the Company’s consolidated net leverage ratio. The Company had unused capacity under the Revolver of approximately $268.5 million, which is net of bank letters of credit of approximately $2.5 million, as of December 31, 2025.

In order to manage the Company’s exposure to variable interest rate risk associated with the Credit Facility, in the first quarter of 2023, the Company entered into $300.0 million notional amounts of three-year interest rate swaps to convert a portion of the Company’s variable rate borrowings into an average fixed rate obligation of 3.64% plus an applicable margin as provided in the Credit Facility based on the Company’s consolidated net leverage ratio. As of December 31, 2025, the aggregate interest rate on the swaps, including the fixed base rate plus the applicable margin, was 5.0%. See Note 24, Hedging Activities, to the Consolidated Financial Statements for more information.

The Company capitalized third-party and credit debt issuance costs attributed to the Euro Term Loan, U.S. Term Loan and Revolver during the second quarter of 2022. Capitalized costs attributed to the Euro Term Loan and U.S. Term Loan are recorded as a direct offset to Long-term debt on the Consolidated Balance Sheets. Capitalized costs attributed to the Revolver are recorded within Other assets on the Consolidated Balance Sheets. These capitalized costs are amortized into Interest expense over the five year term of the Credit Facility. As of December 31, 2025 and 2024, the Company had $0.7 million and $1.1 million, respectively, of debt issuance costs recorded as a reduction of Long-term debt and $1.4 million and $2.4 million, respectively, of debt issuance costs recorded within Other assets.

The Company uses foreign exchange forward contracts to economically hedge the impact of the variability in exchange rates on certain foreign currency-denominated assets and liabilities. Additionally, in connection with the Dipsol acquisition, in March 2025, the Company entered into foreign exchange forward contracts with various financial institutions with an aggregate notional amount of $155.3 million to hedge the variability in U.S. dollar-Japanese yen exchange rates associated with the purchase price. These contracts settled on April 1, 2025 in connection with the Dipsol acquisition. The Company recognized a $1.4 million foreign currency loss during the year ended December 31, 2025 in Other (expense) income, net relating to the change in fair value of these instruments as of the settlement date. See Note 24, Hedging Activities, to the Consolidated Financial Statements for more information.

During 2022, the Company initiated a global cost and optimization program to improve its cost structure and drive a more profitable and productive organization. The Company has achieved its annualized cost savings goal from this program of at least $20 million. In 2025, the Company approved additional actions under the program, which are expected to generate approximately an additional $40 million of annualized cost savings. These actions are expected to be substantially complete by the end of 2026. The Company recognized $35.1 million, $6.5 million and $7.6 million of restructuring and related charges for the years ended December 31, 2025, 2024 and 2023, respectively, as a result of these programs and other facility closure actions. The Company made cash payments related to the settlement of restructuring liabilities under the program of $26.6 million and $7.6 million during the years ended December 31, 2025 and 2024, respectively. The Company expects total one-time cash costs of this program to be approximately 1 to 1.5 times annualized savings. See Note 7, Restructuring and Related Activities, to the Consolidated Financial Statements for more information.

As of December 31, 2025, the Company’s gross liability for uncertain tax positions, including interest and penalties, was $14.2 million. The Company cannot determine a reliable estimate of the timing of cash flows by period related to its uncertain tax position liability. However, should the entire liability be paid, the amount of the payment may be reduced by up to $7.5 million as a result of offsetting benefits in other tax jurisdictions. See Note 10, Income Taxes, to the Consolidated Financial Statements for more information.

As previously disclosed, the Board of Directors of the Company has approved a share repurchase program (“2024 Share Repurchase Program”), authorizing the Company to repurchase up to an aggregate of $150 million of the Company’s outstanding common stock and replacing the prior share repurchase program. The 2024 Share Repurchase Program was effective immediately upon approval and has no expiration date. The number of shares to be repurchased and the timing of such transactions depend on a variety of factors, including market conditions. As of December 31, 2025, there was approximately $59.2 million of capacity remaining under the 2024 Share Repurchase Program. The Company repurchased 364,797 and 312,997 shares under the 2024 Share Repurchase Program for the year ended December 31, 2025 and 2024, respectively. See Item 5, Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities, within Part II of this Report for further information.

The Company believes that its existing cash, anticipated cash flows from operations and available liquidity will be sufficient to support its operating requirements and fund its business objectives for at least the next twelve months, including but not limited to, payments of dividends to shareholders, share repurchases, capital expenditures, other growth opportunities (including potential acquisitions), pension plan contributions, implementing actions to achieve the Company’s sustainability goals and other potential known or anticipated contingencies. The Company also believes it has sufficient additional liquidity to support its operating requirements and to fund its business obligations for the period beyond the next twelve months, including the aforementioned items which are expected to recur annually, as well as future principal and interest payments on the Company’s Credit Facility, tax obligations and other long-term liabilities. The Company’s liquidity is affected by many factors, some based on normal operations of our business and others related to the impact of global events on our business and on global economic conditions as well as industry uncertainties, which we cannot predict. We also cannot predict economic conditions and industry downturns or the timing, strength or duration of recoveries. We may seek, as we believe appropriate, additional debt or equity financing that would provide capital for corporate purposes, working capital funding, additional liquidity needs or to fund future growth opportunities, including possible acquisitions and organic investments. The timing and amount of potential capital requirements cannot be determined at this time and will depend on a number of factors, including the actual and projected demand for our products, specialty chemical industry conditions, competitive factors, and the condition of financial markets, among others.

The following table summarizes the Company’s contractual obligations as of December 31, 2025, and the effect such obligations are expected to have on its liquidity and cash flows in future periods. Pension and postretirement plan contributions beyond 2026 are not determinable since the amount of any contribution is heavily dependent on the future economic environment and investment returns on pension trust assets. The timing of payments related to other long-term liabilities which consist primarily of deferred compensation agreements and environmental reserves, also cannot be readily determined due to their uncertainty. Interest obligations on the Company’s long-term debt and capital leases assume the current debt levels will be outstanding for the entire respective period and apply the interest rates in effect as of December 31, 2025.

Payments due by period

(dollars in thousand) 2030 andBeyond

Purchase obligations 402 402 — — — — —

Non-GAAP Measures

The information in this Report includes non-GAAP (unaudited) financial information that includes EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP earnings per diluted share. The Company believes these non-GAAP financial measures provide meaningful supplemental information as they enhance a reader’s understanding of the financial performance of the Company, facilitate a comparison among fiscal periods, and exclude items that management believes are not indicative of future operating performance or core to the Company’s operations. Non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for the financial information presented in accordance with GAAP. In addition, our definitions of EBITDA, adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross margin, taxes on income before equity in net income of associated companies – adjusted, non-GAAP net income, and non-GAAP earnings per share, as discussed and reconciled below to the most comparable GAAP measures, may not be comparable to similarly named measures reported by other companies.

The Company presents EBITDA, which is calculated as net income attributable to the Company before depreciation and amortization, interest expense, and taxes on income before equity in net income of associated companies. The Company also presents adjusted EBITDA, which is calculated as EBITDA plus or minus certain items that management believes are not indicative of future operating performance or core to the Company’s operations. The Company presents non-GAAP operating income, which is calculated as operating income plus or minus certain items that management believes are not indicative of future operating performance or core to the Company’s operations. Additionally, the Company presents non-GAAP gross profit, which is calculated as gross profit plus or minus certain items that management believes are not indicative of future operating performance or core to the Company’s operations. Adjusted EBITDA margin, non-GAAP operating margin, and non-GAAP gross margin are calculated as the percentage of adjusted EBITDA, non-GAAP operating income, and non-GAAP gross profit to consolidated net sales, respectively. The Company believes these non-GAAP measures provide transparent and useful information and are widely used by analysts, investors, and competitors in our industry as well as by management in assessing the operating performance of the Company on a consistent basis.

Additionally, the Company presents non-GAAP net income and non-GAAP earnings per diluted share as additional performance measures. Non-GAAP net income is calculated as adjusted EBITDA, defined above, less depreciation and amortization, interest expense, and taxes on income before equity in net income of associated companies, in each case adjusted, as applicable, for any depreciation, amortization, interest or tax impacts resulting from the non-core items identified in the reconciliation of net income attributable to the Company to adjusted EBITDA. Non-GAAP earnings per diluted share is calculated as non-GAAP net income per diluted share as accounted for under the “two-class share method.” The Company believes that non-GAAP net income and non-GAAP earnings per diluted share provide transparent and useful information and are widely used by analysts, investors, and competitors in our industry as well as by management in assessing the performance of the Company on a consistent basis.

Certain of the prior period non-GAAP financial measures presented in the following tables have been adjusted to conform with current period presentation. The following tables reconcile the Company’s non-GAAP financial measures (unaudited) to their most directly comparable GAAP financial measures (dollars in thousands, unless otherwise noted, except per share amounts):

Acquisition-related step-up inventory amortization (a) 6,022 — —

Gain on inventory and other adjustments (o) (2,933) — —

Non-GAAP gross margin (%) (u) 36.1 % 37.3 % 36.1 %

Acquisition-related step-up inventory amortization (a) 6,022 — —

Acquisition-related expenses (credits) (c) 12,031 1,854 —

Strategic planning expenses (credits) (d) 579 (290) 4,704

Executive transition costs (f) — 7,288 688

Customer insolvency costs (g) — 3,213 —

Gain on inventory and other adjustments (o) (3,256) — —

Impairment charges (i) 88,840 — —

Acquisition-related depreciation and amortization (j) 4,975 — —

Non-GAAP operating margin (%) (u) 10.6 % 11.6 % 11.7 %

Equity income in a captive insurance company (q) (4,272) (2,930) (2,090)

Acquisition-related step-up inventory amortization (a) 6,022 — —

Acquisition-related expenses (credits) (c) 12,031 1,454 (475)

Strategic planning expenses (credits) (d) 579 (290) 4,704

Gain on inventory and other adjustments (o) (3,256) — —

Executive transition costs (f) — 7,288 688

Customer insolvency costs (g) — 3,213 —

Currency conversion impacts of hyper-inflationary economies (h) 2,216 811 7,849

Impairment charges (i) 88,840 — —

Loss on acquisition-related hedges (k) 1,351 — —

Gain on sale of assets (l) (2,534) (492) —

Multiemployer plan withdrawal charge (m) 923 — —

Brazilian non-income tax credits (n) (1,762) — —

Adjusted EBITDA margin (%) (u) 15.8 % 16.9 % 16.4 %

Plus: Acquisition-related depreciation and amortization (j) 4,975 — —

Equity income in a captive insurance company (q) (0.24) (0.16) (0.12)

Acquisition-related step-up inventory amortization (a) 0.25 — —

Restructuring and related charges, net (b) 1.49 0.28 0.32

Acquisition-related expenses (credits) (c) 0.53 0.06 (0.03)

Strategic planning expenses (credits) (d) 0.03 (0.01) 0.21

Executive transition costs (f) — 0.31 0.03

Customer insolvency costs (g) — 0.13 —

Currency conversion impacts of hyper-inflationary economies (h) 0.13 0.05 0.44

Impairment charges (i) 4.91 — —

Acquisition-related depreciation and amortization (j) 0.20 — —

Loss on acquisition-related hedges (k) 0.06 — —

Gain on sale of assets (l) (0.11) (0.02) —

Multiemployer plan withdrawal charge (m) 0.04 — —

Brazilian non-income tax credits (n) (0.08) — —

Gain on inventory and other adjustments (o) (0.14) — —

Impact of certain discrete tax items (r) (0.06) 0.17 0.54

Non-GAAP earnings per diluted share (v) $ 7.02 $ 7.44 $ 7.65

(a)Acquisition-related step-up inventory amortization represents the amortization of the fair value step-up in Dipsol’s inventories as a result of the acquisition which is recorded within Cost of goods sold in the Company’s Consolidated Statements of Operations. See Note 2, Business Combinations, to the Consolidated Financial Statements for additional information.

(b)Restructuring and related charges, net represent the costs incurred by the Company associated with the Company’s restructuring program and facility closures. During 2025, 2024 and 2023, the Company recorded restructuring and related charges of $35.1 million, $6.5 million and $7.6 million, respectively. See Note 7, Restructuring and Related Activities, to the Consolidated Financial Statements for additional information.

(c)Acquisition-related expenses (credits) include expense associated with the Company's recent and potential acquisitions, including legal, financial, consulting and other costs. See Note 2, Business Combinations, to the Consolidated Financial Statements for additional information.

(d)Strategic planning expenses (credits) include certain consultant and advisory expenses for the Company's long-term strategic planning, as well as process optimization and the next phase of the Company's long-term integration to further optimize its footprint, processes and other functions.

(e)Pension and postretirement benefit costs, non-service components represents the pre-tax, non-service components of the Company’s pension and postretirement net periodic benefit cost in each period. See Note 20, Pension and Other Postretirement Benefits, and Note 9, Other (expense) income, net, to the Consolidated Financial Statements for additional information.

(f)Executive transition costs represent the costs related to the Company’s transition of executive officers.

(g)Customer insolvency costs represent charges associated with specific reserves for trade accounts receivable within the Company’s EMEA and America’s reportable segments related to two specific customers that filed for bankruptcy protection.

(h)Currency conversion impacts of hyper-inflationary economies represent the foreign currency remeasurement impacts associated with the Company’s affiliates in Argentina and Türkiye whose local economies are designated as hyper-inflationary under U.S. GAAP. These pre-tax foreign currency remeasurement impacts are not deductible for tax purposes for each of the years ended December 31, 2025 and 2024 and 2023. The charges incurred related to the immediate recognition of foreign currency remeasurement in the Consolidated Statements of Operations. See Note 1, Basis of Presentation and Significant Accounting Policies, to the Consolidated Financial Statements for additional information.

(i)Impairment charges represents the non-cash charge taken to write down the remaining carrying value of goodwill in the EMEA reportable segment during the second quarter of 2025. See Note 15, Goodwill and Other Intangible Assets, to the Consolidated Financial Statements for additional information.

(j)Acquisition-related depreciation and amortization represents amortization expense recorded for definite-lived intangible assets in connection with the Dipsol and Natech acquisitions and depreciation expense recorded in connection with the fair value step-up of Dipsol’s property, plant, and equipment. See Note 2, Business Combinations, and Note 15, Goodwill and Other Intangible Assets, for more information.

(k)Loss on acquisition-related hedges represents the mark-to-market and settlement of the foreign exchange forward contracts entered into March 2025 for an aggregate notional amount totaling $155.3 million to hedge the variability of exchange rate impacts between the U.S. Dollar and Japanese yen in connection with the acquisition of Dipsol. See Note 2, Business Combinations, and Note 24, Hedging Activities, to the Consolidated Financial Statements for additional information.

(l)Gain on sale of assets represents the gain recognized on the sale of certain property previously classified as held for sale and gain on sale of other assets that are not considered core to the Company’s operations. See Note 7, Restructuring and Related Activities, to the Consolidated Financial Statements for additional information.

(m)Multiemployer plan withdrawal charge represents the expense related to the Company withdrawing from the Cleveland Bakers and Teamsters Pension Fund, a multiemployer defined benefit pension plan, in connection with a site closure under the Company’s restructuring program and facility closure actions. See Note 7, Restructuring and Related Activities, and Note 9, Other (expense) income, net, to the Consolidated Financial Statements for additional information.

(n)Brazilian non-income tax credits represents indirect tax credits and interest related to the Brazil Supreme Court ruling in regard to certain non-income (indirect) taxes that have been previously charged and paid. See Note 9, Other (expense) income, net, to the Consolidated Financial Statements for additional information.

(o)Gain on inventory and other adjustments represents immaterial out-of-period adjustments for inventory and other items and is recorded within Cost of goods sold and SG&A in the Company’s Consolidated Statements of Operations.

(p)Other charges (credits) include product liability disputes with customers during the year ended December 31, 2024, an insurance claim settlement receipt related to production losses due to an electrical fire in 2021 that resulted in the temporary shutdown of production at one of the Company’s production facilities during the year ended December 31, 2024, and insurance recoveries received for remediation and restoration of property damage to certain of the Company’s facilities during the year ended December 31, 2023. Other charges (credits) also includes professional fees incurred in connection with tax audits, charges incurred by an inactive subsidiary of the Company as a result of the termination of restrictions on insurance settlement reserves, and other items. See Note 9, Other (expense) income, net, andNote 25, Commitments and Contingencies, to the Consolidated Financial Statements for additional information.

(q)Equity income in a captive insurance company represents the after-tax income attributable to the Company’s equity interest in Primex, Ltd. (“Primex”), a captive insurance company. The Company holds a 32% investment in and has significant influence over Primex, and therefore accounts for this investment under the equity method of accounting. See Note 16, Investments in Associated Companies, to the Consolidated Financial Statements for additional information.

(r)The impacts of certain discrete tax items include certain impacts of tax law changes, valuation allowance adjustments, uncertain tax positions, provision to return and other adjustments, and the impact of certain intercompany asset transfers. For the year ended December 31, 2023, the impacts also included $6.7 million of withholding taxes for the repatriation of non-U.S. earnings. See Note 10, Income Taxes, to the Consolidated Financial Statements for additional information.

(s)Depreciation and amortization includes $0.9 million, $1.0 million and $1.0 million for the years ended December 31, 2025, 2024 and 2023, respectively, of amortization expense recorded within equity in net income of associated companies in the Company’s Consolidated Statements of Operations, which is attributable to amortization of the fair value purchase accounting step-up in connection with acquisition of the Company’s 50% equity interest in Korea Houghton Corporation.

(t)Taxes on income before equity in net income of associated companies – adjusted presents the impact of any current and deferred income tax expense (benefit), as applicable, of the reconciling items presented in the reconciliation of net income attributable to Quaker Chemical Corporation to adjusted EBITDA and was determined utilizing the applicable rates in the taxing jurisdictions in which these adjustments occurred, subject to deductibility.

(u)The Company calculates adjusted EBITDA margin, non-GAAP operating margin, and non-GAAP gross margin as the percentage of adjusted EBITDA, non-GAAP operating income, and non-GAAP gross profit to consolidated net sales.

(v)The Company calculates non-GAAP earnings per diluted share as non-GAAP net income attributable to the Company per weighted average diluted shares outstanding using the “two-class share method” to calculate such in each given period.

Off-Balance Sheet Arrangements

The Company had approximately $7 million of bank letters of credit and guarantees as of December 31, 2025. The bank letters of credit and guarantees are not significant to the Company’s liquidity or capital resources.

Operations

Consolidated Operations Review – Comparison of 2025 with 2024

The following table summarizes the sales variances by reportable segment and consolidated operations from the prior year:

Americas (2) % (1) % (1) % 2 % (2) %

EMEA (2) % (3) % 4 % 3 % 2 %

Asia/Pacific 5 % (4) % — % 12 % 13 %

Consolidated — % (2) % 1 % 4 % 3 %

COGS was $1,209.3 million in 2025 compared to $1,153.7 million in 2024. The increase of COGS of $55.6 million, or 5%, reflects an increase in spend on the increase in current year sales volumes and an increase in global raw material costs and manufacturing costs. Additionally, COGS in 2025 includes a $6.0 million amortization of the fair value step-up in Dipsol’s inventories as a result of the Dipsol acquisition, which is partially offset by a $2.9 million gain related to an out-of-period inventory adjustment.

Gross profit was $679.4 million in 2025 compared to $686.0 million in 2024, a decrease of approximately $6.6 million, or 1%, primarily as a result of an increase in the Company’s raw material costs and manufacturing costs, as well as the $6.0 million amortization of the fair value step-up in Dipsol’s inventories as a result of the Dipsol acquisition, partially offset by an increase in net sales and a $2.9 million gain related to an out-of-period inventory adjustment. The Company’s reported gross margin in 2025 was 36.0% compared to 37.3% in 2024.

SG&A was $502.4 million in 2025 compared to $484.8 million in 2024, an increase of $17.6 million, or 4%, primarily driven by an increase in SG&A relating to acquisitions, partially offset by lower incentive compensation.

The Company incurred Restructuring and related charges of $35.1 million and $6.5 million during 2025 and 2024, respectively, related to additional reductions in headcount and facility closure costs under the Company’s restructuring program. See the Non-GAAP Measures section of this Item above and Note 7, Restructuring and Related Activities, to the Consolidated Financial Statements for additional information.

During the second quarter of 2025, the Company recorded an $88.8 million non-cash impairment charge to write down the remaining value of goodwill associated with the Company’s EMEA reportable segment. This non-cash impairment charge is the result of the Company’s conclusion that the negative impacts of the lower than projected financial performance, driven by the continuation of soft end market conditions, as well as an increase in the Company’s cost of capital, driven by uncertainty around the potential negative impacts of tariffs, represented a triggering event for the Company’s EMEA reporting unit and the associated goodwill, as well as the related asset group. There were no similar impairment charges during 2024. See Note 15, Goodwill and Other Intangible Assets, to the Consolidated Financial Statements for additional information.

Operating income in 2025 was $53.0 million compared to $194.7 million in 2024. The decrease in operating income was primarily driven by the $88.8 million non-cash impairment charge and increase in Restructuring and related charges as described above. Excluding non-core items that are not indicative of future operating performance, as detailed above, the Company’s current year non-GAAP operating income was $199.4 million compared to $213.7 million in the prior year. The decrease in non-GAAP operating income was primarily due to lower gross profit and an increase in SG&A primarily relating to acquisitions. See the Non-GAAP Measures section of this Item above for additional details.

The Company had Other expense, net of $1.9 million in 2025 compared to Other income, net of $1.4 million in 2024. 2025 and 2024 both included foreign exchange transaction losses, which were $6.6 million higher in the current year and income from non-income tax credits, which were $0.8 million lower in the current year. 2025 also included a $2.2 million net gain on disposals of property, $2.6 million of interest income and a multiemployer plan withdrawal charge of $0.9 million, whereas 2024 included a $2.0 million expense associated with payments related to customer product liability disputes and a $1.0 million business interruption insurance recovery.

Interest expense of $44.0 million increased $3.0 million in 2025 compared to $41.0 million in 2024, primarily as a result of higher outstanding borrowings, partially offset by decreases in interest rates.

The Company’s effective tax rates for 2025 and 2024 were 350.1% and 31.8%, respectively. The Company’s current year effective tax rate was largely driven by the non-cash goodwill impairment charge described above. The 2025 effective tax rate was also driven by the mix of pre-tax earnings, withholding taxes offset by return to provision adjustments, transition loss carryforwards on branch income and net favorable reductions in uncertain tax positions. The Company’s 2024 effective tax rate was primarily impacted by the mix of pre-tax earnings, certain one-time charges related to an intercompany intangible asset transfer, and withholding taxes, offset by changes in uncertain tax positions and return to provision adjustments. Excluding the impact of all non-core items in each year, described in the Non-GAAP Measures section of this Item above, the Company estimates that the 2025 and 2024 effective tax rates would have been approximately 28% and 29%, respectively. The Company may experience continued volatility in its effective tax rates due to several factors, including the timing of tax audits and the expiration of applicable statutes of limitations as they relate to uncertain tax positions, the unpredictability of the timing and amount of certain incentives in various tax jurisdictions, the tax impacts of acquisition and related integration activities, and the timing and amount of certain share-based compensation-related tax benefits, among other factors. In addition, the FTCs valuation allowance, or absence thereof, is based on a number of variables, including forecasted earnings.

Equity in net income of associated companies was $15.2 million in 2025 compared to $11.0 million in 2024. The increase of $4.2 million was primarily due to higher current year income from the Company’s 50% equity interest in a joint venture in Korea and higher current year income from the Company’s 32% investment in Primex, a captive insurance company.

Net income attributable to noncontrolling interest was approximately $0.1 million for both 2025 and 2024.

Consolidated Operations Review – Comparison of 2024 with 2023

The following table summarizes sales variances by segment and consolidated operations from the prior year:

Americas (5) % (4) % (1) % — % (10) %

EMEA (5) % (4) % — % 3 % (6) %

Asia/Pacific 7 % (3) % (2) % 2 % 4 %

Consolidated (2) % (4) % (1) % 1 % (6) %

Net sales of $1,839.7 million in 2024 decreased 6% compared to $1,953.3 million in 2023, primarily due to a decrease in selling price and product mix of approximately 4%, a decrease in sales volumes of approximately 2%, and unfavorable impacts from foreign currency translation of approximately 1%, partially offset by an increase in sales from acquisitions of approximately 1%. The decrease in selling price and product mix was primarily attributable to the impact of our index-based customer contracts and the mix of products and services. The decline in sales volumes was primarily a result of continuation of soft end market conditions compared to the prior year, primarily in the Americas and EMEA segments, partially offset by an increase in sales volumes in the Asia/Pacific segment, continued business wins across all segments and a contribution from acquisitions in the EMEA and Asia/Pacific segments.

Cost of goods sold (“COGS”) were $1,153.7 million in 2024 compared to $1,247.7 million in 2023. The decrease of COGS of $94.0 million, or 8%, reflects lower spend on the decline in 2024 sales volumes and a modest decline in the Company’s global raw material costs.

Gross profit was $686.0 million in 2024 compared to $705.6 million in 2023, a decrease of approximately $19.6 million, or 3%, primarily as a result of the decline in sales mentioned above, partially offset by a modest reduction in the Company’s global raw material costs. The Company’s reported gross margin in 2024 was 37.3% compared to 36.1% in 2023. The Company’s improvement in gross margin was primarily driven by our value-based pricing model and modest improvements in raw material costs.

SG&A was $484.8 million in 2024 compared to $483.6 million in 2023, an increase of $1.2 million, or 0.3%, primarily as a result of higher executive transition costs, higher customer insolvency costs, and SG&A relating to the IKV and Sutai acquisitions, partially offset by lower strategic planning expenses and favorable foreign currency translation compared to the prior year.

The Company incurred Restructuring and related charges of $6.5 million and $7.6 million during 2024 and 2023, respectively, related to reductions in headcount and facility closure costs under the Company’s restructuring program. See the Non-GAAP Measures section of this Item above and Note 7, Restructuring and Related Activities, to the Consolidated Financial Statements for additional information.

Operating income in 2024 was $194.7 million compared to $214.5 million in 2023. Excluding non-core items that are not indicative of future operating performance, as detailed above, the Company’s 2024 non-GAAP operating income was $213.7 million compared to $227.8 million in the prior year. The decrease in non-GAAP operating income was primarily due to lower gross profit, as described above. See the Non-GAAP Measures section of this Item above for additional details.

The Company had Other income, net of $1.4 million in 2024 compared to Other expense, net of $10.7 million in 2023 due to lower foreign exchange losses of $1.8 million in 2024 compared to losses of $14.8 million in the prior year. Additionally, the Company had higher non-income tax refunds of $3.7 million in 2024 compared to non-income tax refunds of $1.3 million in the prior year. Other income, net in 2024 also included a business interruption insurance recovery of $1.0 million, other income of $0.4 million relating to adjustments to the earnout provisions for the Sutai acquisition, and $2.0 million of product liability claim costs. Prior year’s Other expense, net included $2.1 million of facility remediation recoveries, net.

Interest expense of $41.0 million decreased $9.7 million in 2024 compared to $50.7 million in 2023, primarily as a result of lower outstanding borrowings and decreases in interest rates.

The Company’s effective tax rates for 2024 and 2023 were 31.8% and 36.3%, respectively. The Company’s 2024 effective tax rate was primarily impacted by the mix of pre-tax earnings, certain one-time charges related to an intercompany intangible asset transfer, provision to return and other adjustments, and withholding taxes, offset by changes in uncertain tax positions. The Company’s 2023 effective tax rate was primarily impacted by changes to the valuation allowance for and the usage of certain FTCs, withholding taxes and deferred taxes on unremitted earnings, and the mix of pre-tax earnings. Excluding the impact of all non-core items in each year, described in the Non-GAAP Measures section of this Item, above, the Company estimates that the 2024 and 2023 effective tax rates would have been approximately 29% and 28%, respectively. In 2023, the Company recognized $6.7 million of withholding taxes for the repatriation of non-U.S. earnings that the Company does not believe is core or indicative of future performance and has adjusted these withholding taxes as a Non-GAAP measure. The Company may experience continued volatility in its effective tax rates due to several factors, including the timing of tax audits and the expiration of applicable statutes of limitations as they relate to uncertain tax positions, the unpredictability of the timing and amount of certain incentives in various tax jurisdictions, and the timing and amount of certain share-based compensation-related tax benefits, among other factors. In addition, the FTC valuation allowance, or absence thereof, is based on a number of variables, including forecasted earnings, which may vary.

Equity in net income of associated companies was $11.0 million in 2024 compared to $15.3 million in 2023. The decrease of $4.3 million was primarily due to lower 2024 income from the Company’s 50% equity interest in a joint venture in Korea offset by higher 2024 income from the Company’s equity interest in Primex.

Net income attributable to noncontrolling interest was approximately $0.1 million for both 2024 and 2023.

Reportable Segments Review - Comparison of 2025 with 2024

The Company’s reportable segments reflect the structure of the Company’s internal organization, the method by which the Company’s resources are allocated and the manner by which the Chief Operating Decision Maker of the Company assesses its performance. The Company has three reportable segments: (i) Americas; (ii) EMEA; and (iii) Asia/Pacific. See Notes 1, 4, 5, and 15 to the Consolidated Financial Statements for more information.

Segment operating earnings for each of the Company’s reportable segments are comprised of the segment’s net sales less directly related product costs and other segment items. Operating expenses not directly attributable to the net sales of each respective segment, such as certain corporate and administrative costs, impairment charges, and restructuring charges, are not included in segment operating earnings. Other items not specifically identified with the Company’s reportable segments include Interest expense and Other (expense) income, net.

Americas

Americas represented approximately 46% of the Company’s consolidated net sales in 2025. The segment’s net sales were $865.3 million, a decrease of $16.8 million or 2% compared to 2024. This decrease in net sales was driven by a decline in sales volumes of approximately 2%, a decrease in selling price and product mix of approximately 1% and an unfavorable impact from foreign currency translation of approximately 1%, offset by an increase in sales from the acquisition of Dipsol of approximately 2%. The decline in organic sales volumes was primarily driven by a continuation of soft market conditions and customer order patterns, partially offset by new business wins. The decrease in selling price and product mix was primarily attributable to the impact of the mix of products, services and geographies and the impact of our index-based customer contracts. The unfavorable foreign exchange impact was primarily due to the strengthening of the U.S. dollar against the Brazilian real and Mexican peso during 2025 compared to 2024. Segment operating earnings in the Americas were $227.6 million, a decrease of $16.4 million or 7% compared to 2024 primarily driven by lower net sales and lower segment operating margins, primarily due to lower gross margins for the segment.

EMEA

EMEA represented approximately 29% of the Company’s consolidated net sales in 2025. The segment’s net sales were $548.1 million, an increase of $11.7 million or 2% compared to 2024. This was a result of an increase in sales from acquisitions of Dipsol, Natech, CSI, and IKV of approximately 3% and a favorable foreign currency translation impact of approximately 4%, primarily due to the weakening of the U.S. dollar against the Euro, partially offset by a decrease in selling price and product mix of approximately 3% and a decrease in organic sales volumes of approximately 2%. The decrease in selling price and product mix was primarily attributable to the impact of the mix of products, services and geographies and the impact of our index-based customer contracts. The decline in sales volumes was primarily driven by softer market conditions, partially offset by continued new business wins. Segment operating earnings in EMEA were $96.6 million, a decrease of $2.8 million or 3% compared to 2024 as an increase in net sales was offset by lower segment operating margins, primarily due to higher SG&A related to acquisitions.

Asia/Pacific

Asia/Pacific represented approximately 25% of the Company’s consolidated net sales in 2025. The segment’s net sales were $475.2 million, an increase of $54.1 million or approximately 13% compared to 2024. This was driven by contributions from acquisitions of Dipsol and Sutai of approximately 12% and an increase in organic sales volumes of approximately 5%, partially offset by lower selling price and product mix of approximately 4%. The increase in organic sales volumes was primarily driven by new business wins coupled with a more favorable end market environment compared to the prior year period. The decrease in selling price and product mix was primarily attributable to the impact of the mix of products, services and geographies and the impact of our index-based customer contracts. Segment operating earnings in Asia/Pacific were $124.2 million, an increase of $1.5 million, or 1%, compared to 2024 as an increase in net sales was offset by lower segment operating margins, primarily due to lower gross margins and higher SG&A, primarily related to acquisitions.

Reportable Segments Review – Comparison of 2024 with 2023

Americas

Americas represented approximately 48% of the Company’s consolidated net sales in 2024. The segment’s net sales were $882.1 million in 2024, a decrease of $95.0 million or 10% compared to 2023. This was driven by a decline in sales volumes of 5%, a decline in selling price and product mix of 4% and unfavorable foreign currency impacts of 1%. The decline in sales volumes was primarily driven by softer market conditions broadly across the portfolio, partially offset by new business wins. The decline in selling price and product mix was primarily attributable to the impact of our index-based customer contacts and the mix of products and services. The unfavorable foreign exchange impact was primarily due to the strengthening of the U.S. dollar against the Mexican peso and Brazilian real. Segment operating earnings in the Americas were $244.0 million in 2024, a decrease of $22.1 million or 8% compared to 2023 primarily driven by the decrease in net sales, partially offset by an improvement in segment operating margins driven by the Company’s margin improvement initiatives.

EMEA

EMEA represented approximately 29% of the Company’s consolidated net sales in 2024. The segment’s net sales were $536.4 million in 2024, a decrease of $34.9 million or 6% compared to 2023. This was driven by a decline in sales volumes of 5% and a decline in selling price and product mix of 4%, partially offset by a contribution of sales from the acquisition of IKV of 3%. The decline in sales volumes was driven by the continuation of soft end market conditions in the region, partially offset by new business wins. The decline in selling price and product mix was primarily attributable to the impact of our index-based customer contracts and the mix of products and services. Segment operating earnings in EMEA were $99.4 million in 2024, a decrease of $5.4 million or 5% compared to 2023 primarily driven by the decrease in net sales, partially offset by an improvement in segment operating margins driven by the Company’s margin improvement initiatives.

Asia/Pacific

Asia/Pacific represented approximately 23% of the Company’s consolidated net sales in 2024. The segment’s net sales were $421.1 million in 2024, an increase of 4% or approximately $16.2 million compared to 2023. This was driven by an increase in sales volumes of 7%, a contribution of sales from the acquisition of Sutai of 2%, partially offset by a decline in selling price and product mix of 3% and unfavorable impact from foreign currency translation of 2%. The increase in sales volumes was primarily driven by new business wins coupled with a modest improvement in the end market environment. The decline in selling price and product mix was primarily attributable to the impact of our index-based customer contracts and mix of products and services. The unfavorable foreign currency translation was primarily due to the strengthening of the U.S. dollar against the Chinese renminbi. Segment operating earnings in Asia/Pacific were $122.7 million in 2024, an increase of $4.3 million, or 4%, compared to 2023 as a result of improvement in net sales, partially offset by a decrease in segment operating margins.

Environmental Clean-up Activities

The Company is involved in environmental clean-up activities in connection with an existing plant location and former waste disposal sites. This includes certain soil and groundwater contamination the Company identified in 1992 at AC Products, Inc. (“ACP”), a wholly owned subsidiary. In voluntary coordination with the Santa Ana California Regional Water Quality Board, ACP has been remediating the contamination, the principal contaminant of which is perchloroethylene (“PERC”). In 2004, the Orange County Water District (“OCWD”) filed a civil complaint against ACP and other parties seeking to recover compensatory and other damages related to the investigation and remediation of the contamination in the groundwater. Pursuant to a settlement agreement with OCWD, ACP agreed, among other things, to operate the two groundwater treatment systems to hydraulically contain groundwater contamination emanating from ACP’s site until the concentrations of PERC released by ACP fell below the current Federal maximum contaminant level for four consecutive quarterly sampling events. In 2014, ACP ceased operation at one of its two groundwater treatment systems, as it had met the above condition for closure. In 2020, the Santa Ana Regional Water Quality Control Board asked that ACP conduct periodic indoor and outdoor soil vapor testing on and near the ACP site to confirm that ACP continues to meet the applicable local standards. ACP has performed such testing program work with an additional round of testing done in 2025. It is expected that additional testing may occur in 2026. As of December 31, 2025, ACP believes it has met the conditions for closure of the remaining groundwater treatment system but continues to operate this system while in discussions with the relevant authorities.

The Company is also party to other environmental matters related to certain domestic and foreign properties. These environmental matters primarily require the Company to perform ongoing monitoring and maintenance at each of the applicable sites. During the year ended December 31, 2025, there have been no significant changes to the facts or circumstances of these matters. The Company had accrued obligations of $3.4 million and $3.6 million as of December 31, 2025 and 2024, respectively, for these environmental matters. These obligations are included in other accrued liabilities and other non-current liabilities on the Company’s Consolidated Balance Sheets. These accrued amounts are inclusive of the Brazilian environmental matter discussed below.

The Company’s Sao Paulo, Brazil site was required under Brazilian environmental, health and safety regulations to perform an environmental assessment as part of a permit renewal process. Initial investigations identified soil and ground water contamination in select areas of the site. The site has conducted a multi-year soil and groundwater investigation and corresponding risk assessments based on the result of the investigations. In 2017, the site had to submit a new 5-year permit renewal request and was asked to complete additional investigations to further delineate the site based on review of the technical data by the local regulatory agency, Companhia Ambiental do Estado de São Paulo (“CETESB”). Based on review of the updated investigation data, CETESB issued a Technical Opinion regarding the investigation and remedial actions taken to date. The site developed an action plan and submitted it to CETESB in 2018 based on CETESB requirements. The site intervention plan primarily requires the site, amongst other actions, to conduct periodic monitoring for methane in soil vapors, source zone delineation, groundwater plume delineation, bedrock aquifer assessment, update the human health risk assessment, develop a current site conceptual model and conduct a remedial feasibility study and provide a revised intervention plan. In 2020, the site submitted a report on the activities completed including the revised site conceptual model and results of the remedial feasibility study and recommended remedial strategy for the site. The site believes it will achieve the remedial objectives in June 2027, at which time a request for closure of the treatment system will be submitted.

The Company believes that it has made adequate accruals for costs associated with other environmental matters of which it is aware. Approximately $0.5 million and $0.6 million were accrued as of December 31, 2025 and 2024, respectively, to provide for such anticipated future environmental assessments and remediation costs.

Notwithstanding the foregoing, the Company cannot be certain that future liabilities in the form of remediation expenses and damages will not exceed amounts reserved. See Note 25, Commitments and Contingencies, to the Consolidated Financial Statements for additional details.

General

See Item 7A of this Report, below, for further discussion of certain quantitative and qualitative disclosures about market risk.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Quaker Houghton’s earnings, cash flows and financial position are exposed to the impact of fluctuations in interest rates, foreign currency exchange rates, and commodity prices, as well as credit risk. Except as otherwise disclosed below, the market risks discussed below did not change materially from December 31, 2024.

Interest Rate Risk. During June 2022, the Company entered into an amendment to its primary credit facility (the “Credit Facility”). See Note 19, Debt, to the Consolidated Financial Statements for additional details. As of December 31, 2025, borrowings under the Credit Facility bear interest at either term SOFR or a base rate, in each case, plus an applicable margin based upon the Company’s consolidated net leverage ratio, and, in the case of term SOFR, a spread adjustment equal to 0.10% per annum. As a result of the variable interest rates applicable under the Credit Facility, if interest rates rise significantly, the cost of debt to the Company will increase. This may have an adverse effect on the Company, depending on the extent of the Company’s borrowings outstanding throughout a given year. As of December 31, 2025, the Company had outstanding borrowings under the Credit Facility of approximately $859.7 million. The interest rate applicable on outstanding borrowings under the Credit Facility was approximately 4.7% as of December 31, 2025. An interest rate change of 100 basis points would result in an approximate $8.6 million increase or decrease to interest expense for the year ended December 31, 2025.

In order to manage the Company’s exposure to variable interest rate risk associated with the Credit Facility in the first quarter of 2023, the Company entered into $300.0 million notional amounts of three year interest rate swaps to convert a portion of the Company’s variable rate borrowings into an average fixed rate obligation of 3.64% plus an applicable margin as provided in the Credit Facility based on the Company’s consolidated net leverage ratio. As of December 31, 2025, the aggregate interest rate on the swaps, including the fixed base rate plus the applicable margin, was 5.0%. These interest rate swaps are designated and qualify as cash flow hedges.

Foreign Exchange Risk. A significant portion of the Company’s revenues and earnings are generated by its foreign operations.During the past three years, sales by its non-U.S. subsidiaries accounted for approximately 63% to 67% of its consolidated net sales. These foreign operations also represent a significant portion of the Company’s assets and liabilities. In addition, the Company occasionally sources inventory among its worldwide operations. This practice can give rise to foreign exchange risk resulting from the varying cost of inventory to the receiving location, as well as from the revaluation of intercompany balances. The Company primarily mitigates this risk through local sourcing efforts.

Generally, these foreign operations use the local currency as their functional currency. Accordingly, the Company’s financial results are affected by foreign currency fluctuations, particularly between the U.S. dollar and the euro, the British pound sterling, the Brazilian real, the Mexican peso, the Chinese renminbi and the Indian rupee. The Company’s results can be materially affected depending on the volatility and magnitude of foreign exchange rate changes. If the euro, the British pound sterling, the Brazilian real, the Mexican peso, the Chinese renminbi and the Indian rupee had all weakened or strengthened by 10% against the U.S. dollar, the Company’s 2025 revenues would have correspondingly decreased or increased by approximately $100.4 million. Similarly, pre-tax earnings would increase or decrease by approximately $10.5 million.

The Company uses cross currency swaps, designated as net investment hedges, to hedge portions of its net investment in its European and Japanese operations. The net investment hedges serve to offset the foreign currency translation risk from the Company’s foreign operations. See Note 24, Hedging Activities, to the Consolidated Financial Statements for additional details.

Commodity Price Risk. Many of the raw materials used by the Company are derivatives of commodity chemicals, which canexperience significant price volatility, and therefore the Company’s earnings can be materially affected by market changes in raw material prices. At times, the Company has entered into fixed-price purchase contracts to manage this risk. These contracts provide protection to the Company if the prices for the contracted raw materials rise; however, in certain circumstances, the Company may not realize the benefit if such prices decline. A gross margin change of one percentage point would correspondingly have increased or decreased the Company’s pre-tax earnings by approximately $18.9 million.

Credit Risk. The Company establishes allowances for credit losses for estimated losses resulting from the inability of itscustomers to make required payments. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances might be required. Downturns in the overall economic climate may also exacerbate specific customer financial issues. A significant portion of the Company’s revenues are derived from sales to customers in the steel and automotive industries, including some of our larger customers, where bankruptcies have occurred in the past and where companies have experienced past financial difficulties. Though infrequent, when a bankruptcy occurs, Quaker Houghton must judge the amount of proceeds, if any, that may ultimately be received through the bankruptcy or liquidation process.

In addition, as part of its terms of trade, the Company may custom manufacture products for certain large customers and may also ship products on a consignment basis. These practices may increase the Company’s exposure to customer credit risk, including bankruptcy and may require a write-down or disposal of inventory due to obsolescence or limited marketability as well as a reserve for accounts receivable. Customer product returns or disputes may also result in similar issues related to the realizability of accounts receivable or inventory. The Company recorded expense to increase its provision for credit losses by $0.7 million, $2.1 million and $1.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. A change of 10% to the expense recorded to the Company’s provision would have increased or decreased the Company’s pre-tax earnings by $0.1 million, $0.2 million and $0.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Item 8. Financial Statements and Supplementary Data.

Quaker Chemical Corporation

Index to Consolidated Financial Statements

Page

Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID 238) 44

Consolidated Statements of Operations 46

Consolidated Statements of Comprehensive Income (Loss) 47

Consolidated Balance Sheets 48

Consolidated Statements of Cash Flows 49

Consolidated Statements of Changes in Equity 50

Notes to Consolidated Financial Statements 52

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Quaker Chemical Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Quaker Chemical Corporation and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations , of comprehensive income (loss), of changes in equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Dipsol Chemicals Co., Ltd. and its subsidiaries (“Dipsol”) from its assessment of internal control over financial reporting as of December 31, 2025 because it was acquired by the Company in a purchase business combination during 2025. We have also excluded Dipsol from our audit of internal control over financial reporting. Dipsol is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 4% and 3%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2025.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Acquisition of Dipsol Chemical Co, Ltd. – Valuation of Product Technology, Inventories, Land, Building and Improvements, and Personal Property

As described in Notes 1 and 2 to the consolidated financial statements, in April 2025, the Company acquired Dipsol Chemicals Co., Ltd. and its subsidiaries, (“Dipsol”) for a net purchase price of approximately $155.5 million. Of the acquired assets, $18.0 million of product technology, $18.0 million of inventories, and $39.5 million of property, plant & equipment was recorded. The Company accounts for business combinations under the acquisition method of accounting, which requires the recording of acquired assets, including separately identifiable intangible assets, and assumed liabilities at their respective acquisition date estimated fair values. The determination of the estimated fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates and assumptions. The preliminary product technology intangible asset fair value was determined using the relief from royalty method. This valuation methodology required the use of several assumptions and estimates, including, but not limited to, the discount rate, the projected revenue, the royalty rate, and the economic life. The preliminary inventories fair value was determined using the net realizable value approach, which includes the use of several estimates, including the selling prices and current replacement cost as of the valuation date. The preliminary land’s fair value was determined using a sales comparison approach, which includes the use of several assumptions and estimates, including reproduction/replacement cost, while building and improvements and personal property’s fair value was determined using the cost approach, which includes the use of several assumptions and estimates, including the building condition, floor value, physical deterioration, functional and economic obsolescence, reproduction/replacement cost, and remaining useful lives. The principal considerations for our determination that performing procedures relating to the valuation of product technology, inventories, land, building and improvements, and personal property acquired in the acquisition of Dipsol is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the product technology, inventories, land, building and improvements, and personal property acquired; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the royalty rate for product technology, selling prices and current replacement cost for inventories, reproduction/replacement cost for land, and floor value, physical deterioration and reproduction/replacement cost for building and improvements and personal property; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the product technology, inventories, land, building and improvements, and personal property acquired. These procedures also included, among others (i) reading the purchase agreement; (ii) testing management’s process for developing the fair value estimate of the product technology, inventories, land, building and improvements, and personal property acquired; (iii) evaluating the appropriateness of the relief from royalty, net realizable value, sales comparison, and cost approaches used by management; (iv) testing the completeness and accuracy of the underlying data used in the relief from royalty, net realizable value, sales comparison, and cost approaches; and (v) evaluating the reasonableness of the significant assumptions used by management related to the royalty rate for product technology, selling prices and current replacement cost for inventories, reproduction/replacement cost for land, and floor value, physical deterioration and reproduction/replacement cost for building and improvements and personal property. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the relief from royalty, net realizable value, sales comparison, and cost approaches and (ii) the reasonableness of the royalty rate assumption for product technology, selling prices and current replacement cost assumptions for inventories, reproduction/replacement cost assumption for land, and floor value, physical deterioration, and reproduction/replacement cost assumptions for building and improvements and personal property.

/s/PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania

February 23, 2026

We have served as the Company’s auditor since at least 1972. We have not been able to determine the specific year we began serving as auditor of the Company.

QUAKER CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data)

Year Ended December 31,

Impairment charges 88,840 — —

Less: Net income attributable to noncontrolling interest 87 85 124

Per share data:

The accompanying notes are an integral part of these consolidated financial statements.

QUAKER CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands)

Year Ended December 31,

Other comprehensive income (loss), net of tax

Defined benefit retirement plans

Net (loss) gain arising during the period, other (1,196) 105 (5,792)

Amortization of actuarial loss (gain) 258 301 (385)

Amortization of prior service cost 17 19 34

Current period change in fair value of derivatives (1,235) (159) 1,407

Unrealized (loss) gain on available-for-sale securities (30) (46) 1,817

The accompanying notes are an integral part of these consolidated financial statements.

QUAKER CHEMICAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except par value)

December 31,

ASSETS

Current assets

Prepaid expenses and other current assets 58,428 59,939

LIABILITIES AND EQUITY

Current liabilities

Short-term borrowings and current portion of long-term debt $ 35,657 $ 37,554

Accrued pension and postretirement benefits 2,126 2,328

Non-current accrued pension and postretirement benefits 20,615 23,783

Commitments and contingencies (Note 25)

Equity

The accompanying notes are an integral part of these consolidated financial statements.

QUAKER CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

Year Ended December 31,

Cash flows from operating activities

Inventory step-up amortization 6,022 — —

Impairment charges 88,840 — —

Uncertain tax positions (non-deferred portion) (5,708) (2,372) (644)

Pension and other postretirement benefits (4,132) (4,460) (2,079)

Prepaid expenses and other assets 3,069 (6,242) (21)

Cash flows from investing activities

Payments related to acquisitions, net of cash acquired (164,209) (39,302) —

Other investing activities 2,951 — —

Cash flows from financing activities

(Payments) borrowings on other debt, net (386) 1,441 (506)

Shares purchased under share repurchase program (41,521) (49,247) —

Effect of foreign exchange rate changes on cash 6,782 (11,141) 771

Net (decrease) increase in cash and cash equivalents (9,051) (5,647) 13,564

Supplemental cash flow disclosures:

Cash paid during the year for:

Non-cash activities:

Accrued purchases of property, plant and equipment, net $ 8,987 $ 12,654 $ 2,975

The accompanying notes are an integral part of these consolidated financial statements.

QUAKER CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Dollars in thousands, except per share amounts)

Amounts reported in other comprehensive income (loss) — — — 13,825 (19) 13,806

Distributions to noncontrolling affiliate shareholders — — — — (169) (169)

Share issuance and equity-based compensation plans, net 42 11,813 — — — 11,855

Share issuance and equity-based compensation plans, net (5) 13,026 — — — 13,021

Amounts reported in other comprehensive income — — — 85,958 232 86,190

Noncontrolling interest from acquisition — — — — 2,451 2,451

Share issuance and equity-based compensation plans, net 23 12,565 — — — 12,588

The accompanying notes are an integral part of these consolidated financial statements.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts, unless otherwise stated)

Page

Note 1 Basis of Presentation and Significant Accounting Policies 52

Note 2 Business Combinations 58

Note 3 Recently Issued Accounting Standards 60

Note 4 Business Segments 61

Note 5 Net Sales and Revenue Recognition 63

Note 6 Leases 64

Note 7 Restructuring and Related Activities 65

Note 8 Equity 67

Note 9 Other (Expense) Income, net 70

Note 10 Income Taxes 71

Note 11 Earnings Per Share 76

Note 12 Accounts Receivable and Allowance for Credit Losses 77

Note 13 Inventories 77

Note 14 Property, Plant and Equipment 77

Note 15 Goodwill and Other Intangible Assets 78

Note 16 Investments in Associated Companies 79

Note 17 Other Non-Current Assets 80

Note 18 Other Accrued Liabilities 80

Note 20 Pension and Other Postretirement Benefits 83

Note 21 Other Non-Current Liabilities 91

Note 22 Accumulated Other Comprehensive Loss 92

Note 23 Fair Value Measures 92

Note 24 Hedging Activities 93

Note 25 Commitments and Contingencies 95

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QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts, unless otherwise stated)

Note 1 – Basis of Presentation and Significant Accounting Policies

As used in these Notes to Consolidated Financial Statements, the terms “Quaker,” “Quaker Houghton,” the “Company,” “we,” and “our” refer to Quaker Chemical Corporation (doing business as Quaker Houghton), its subsidiaries, and associated companies, unless the context otherwise requires.

Basis of presentation: The accompanying consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and include the accounts of Quaker Houghton and its controlled subsidiaries.

Principles of consolidation: We consolidate all entities we control, which generally applies to entities in which we own a majority of the voting interests. Intercompany transactions and balances are eliminated in consolidation. For consolidated subsidiaries in which the Company’s ownership is less than 100%, the outside shareholders’ interests are reflected as non-controlling interests within the consolidated financial statements. The Company is not the primary beneficiary of any variable interest entities (“VIEs”) and therefore the Company’s consolidated financial statements do not include the accounts of any VIEs.

Equity method investments: The Company applies the equity method of accounting to investments in which the Company has significant influence but does not control the operating and financial decisions of the investee. This generally applies when the Company’s ownership interest in common stock of the investee is between 20% and 50%. Such investments are presented in “Investments in associated companies” on the Consolidated Balance Sheets. We initially record our investment at cost and subsequently adjust the investment to recognize our share of net earnings and losses and distributions received. The Company’s share of net income or losses in these investments in associated companies is included in the Consolidated Statements of Operations. The Company reviews these investments for impairments when events or changes in circumstances indicate that the carrying amount of the investment may be other-than-temporarily impaired. See Note 16, Investments in Associated Companies, for additional information.

Accounting estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from such estimates.

Foreign currency: Since we do business in many foreign countries, fluctuations in currency exchange rates affect our financial position and result of operations. In most of our non-U.S. operations, the local currency is considered the functional currency. The assets and liabilities of non-U.S. subsidiaries and associated companies are translated into U.S. dollars at the respective rates of exchange prevailing at the end of the year. Income and expense accounts are translated at average exchange rates prevailing during the year. Translation adjustments resulting from this process are recorded directly in equity as accumulated other comprehensive income (“AOCI”). Some transactions are made in currencies different from an entity’s functional currency. Gains and losses from remeasurement of these foreign currency transactions, and the impact of related hedges, are generally reflected in “Other (expense) income, net” in the Consolidated Statement of Operations as they occur. See Note 9, Other (expense) income, net, and our policy on accounting for hyperinflation below, for additional information.

Hyper-inflationary accounting: Economies that have a cumulative three-year rate of inflation exceeding 100% are consideredhyper-inflationary. A legal entity that operates within an economy deemed to be hyper-inflationary is required to remeasure its monetary assets and liabilities to the applicable published exchange rates and record the associated gains or losses resulting from the remeasurement directly to the Consolidated Statements of Operations.

Argentina’s and Türkiye’s economies were considered hyper-inflationary effective July 1, 2018 and April 1, 2022, respectively. As of, and for the year ended December 31, 2025, the Company's Argentine and Turkish subsidiaries represented a combined 1% and 2% of the Company’s consolidated total assets and net sales, respectively. For the years ended December 31, 2025, 2024 and 2023, the Company recorded $2.2 million, $0.8 million, and $7.8 million, respectively, of remeasurement losses associated with the applicable currency conversions related to Argentina and Türkiye. These losses were recorded within foreign exchange losses, net, which is a component of Other (expense) income, net, in the Company’s Consolidated Statements of Operations.

Segments: The Company’s operating segments, which are consistent with its reportable segments, reflect the structure of the Company’s internal organization, the method by which the Company’s resources are allocated and the manner by which the Chief Operating Decision Maker assesses the Company’s performance.

Reclassifications: Certain information has been reclassified to conform to the current year presentation.

Business combinations: The Company accounts for business combinations under the acquisition method of accounting. Thismethod requires the recording of acquired assets, including separately identifiable intangible assets, and assumed liabilities at their respective acquisition date estimated fair values. Any excess of the purchase price over the estimated fair value of the identifiable net assets acquired is recorded as goodwill. The determination of the estimated fair value of assets acquired and liabilities assumed requires significant estimates and assumptions.

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QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The Company engaged an independent third-party valuation specialist to assist with the allocation of the total purchase price for the acquisition of Dipsol Chemicals Co., Ltd. and its subsidiaries, (“Dipsol”) to the fair value of the net assets acquired. The preliminary fair value of customer-related intangible assets was determined using the multi-period excess earnings method, while the preliminary fair value of product technology and trademarks were determined using the relief from royalty method. These valuation methodologies required the use of several assumptions and estimates, including, but not limited to, the customer attrition rate, the discount rate, net sales attributable to existing customers, the economic life, the EBITDA margin, and the contributory asset charge for the customer-related intangible assets, and the discount rate, the projected revenue, the royalty rate, and the economic life for the product technology and trademark intangible assets. The preliminary fair value of inventory was determined using the net realizable value approach, which includes the use of several estimates, including the selling prices and current replacement cost as of the valuation date. The preliminary fair value of land was determined using a sales comparison approach, which includes the use of several assumptions and estimates, including reproduction/replacement cost, while the preliminary fair value of building and improvements and personal property was determined using the cost approach, which includes the use of several assumptions and estimates, including the building condition, floor value, physical deterioration, functional and economic obsolescence, reproduction/replacement cost, and remaining useful lives.

Based on the assessment of additional information during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the estimated fair value of assets acquired and liabilities assumed. See Note 2, Business Combinations, for additional information.

Revenue recognition: The Company recognizes revenue in an amount that reflects the consideration to which the Company expects to be entitled in exchange for goods or services transferred to its customers. To do this, the Company applies a five-step model, which requires the Company to: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies the performance obligation.

The Company identifies a contract with a customer when a sales agreement indicates approval and commitment of the parties; identifies the rights of the parties; identifies the payment terms; has commercial substance; and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

The Company identifies a performance obligation in a contract for each promised good or service that is separately identifiable from other obligations in the contract and for which the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer. The Company determines the transaction price as the amount of consideration it expects to be entitled to in exchange for fulfilling the performance obligations, including the effects of any variable consideration, significant financing elements, amounts payable to the customer or noncash consideration. For any contracts that have more than one performance obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation.

In accordance with the last step of the five-step model, the Company recognizes revenue when, or as, it satisfies the performance obligation in a contract by transferring control of a promised good or providing the service to the customer. The Company typically satisfies its performance obligations and recognizes revenue at a point in time for product sales, generally when products are shipped or delivered to the customer, depending on the terms underlying each arrangement. In circumstances where the Company’s products are on consignment, revenue is generally recognized upon usage or consumption by the customer. For any FluidcareTM or other services provided by the Company to the customer, the Company typically satisfies its performance obligations and recognizes revenue over time, as the promised services are performed. The Company uses input methods to recognize revenue over time related to these services, including labor costs and time incurred. The Company believes that these input methods represent the most indicative measure of the FluidcareTM or other service work performed by the Company.

The Company does not have standard payment terms for all customers; however, the Company’s general payment terms require customers to pay for products or services once the performance obligation is satisfied. The Company does not have significant financing arrangements with its customers.

In addition, the Company expenses costs to obtain a contract as incurred when the expected period of benefit, and therefore the amortization period, is one year or less. In addition, the Company excludes from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer, including sales, use, value added, excise and various other taxes. Lastly, the Company has elected to account for shipping and handling costs incurred after the customer has obtained control of a good as a fulfillment cost, rather than an additional promised service. The Company does not have significant amounts of variable consideration in its contracts with customers.

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QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The Company records license fees received from third-parties in Other (expense) income, net, in its Consolidated Statements of Operations, which generally include sales-based royalties in exchange for the license of intellectual property. These license fees are recognized in accordance with their agreed-upon terms and when performance obligations are satisfied, which is generally when the third party has a subsequent sale.

The Company recognizes a contract asset or receivable on its Consolidated Balance Sheet when the Company performs a service or transfers a good in advance of receiving consideration. A receivable is the Company’s right to consideration that is unconditional and only the passage of time is required before payment of that consideration is due. A contract asset is the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer.

A contract liability is recognized when the Company receives consideration, or if it has the unconditional right to receive consideration, in advance of performance. A contract liability is the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration, or a specified amount of consideration is due, from the customer.

See Note 5, Net Sales and Revenue Recognition, for additional information.

Right-of-use lease assets and lease liabilities: The Company determines if an arrangement is a lease at its inception. Thisdetermination generally depends on whether the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed if the Company obtains the right to direct the use of the asset, and obtains substantially all of the economic benefits from its use. Lease expense for variable leases and short-term leases is recognized when the obligation is incurred.

The lease term for all of the Company’s leases includes the non-cancellable period of the lease, adjusted for any renewal and termination options that the Company is reasonably certain it will exercise. Operating leases are included in right-of-use lease assets, other accrued liabilities and long-term lease liabilities on the Consolidated Balance Sheet. Right-of-use lease assets and liabilities are recognized on the lease commencement date based on the present value of lease payments over the respective lease term. Operating lease expense is recognized on a straight-line basis over the lease term.

The Company uses the stated borrowing rate for a lease when readily determinable. When a stated borrowing rate is not available in a lease agreement, the Company uses its incremental borrowing rate at the lease commencement date to determine the present value of its lease payments. In determining the incremental borrowing rate, the Company considers information including fully secured borrowing rates readily available to the Company and its subsidiaries. The Company includes finance leases in property, plant and equipment (“PP&E”), current portion of long-term debt and long-term debt on the Consolidated Balance Sheet. See Note 6, Leases, for additional information.

Restructuring activities: Restructuring programs consist of employee severance, rationalization of manufacturing or otherfacilities and other related items. To account for such programs, the Company recognizes a liability for the cost associated with an exit or disposal activity, when the liability is incurred, is estimable, and payment is probable. See Note 7, Restructuring and Related Activities, for additional information.

Share-based compensation: The Company has long-term incentive programs (“LTIP”) for key employees which provides for the granting of stock options, restricted stock units (“RSU”), restricted stock awards (“RSAs”), and performance-based stock awards (“PSUs”). Share-based awards may also be granted under other equity compensation plans. Share-based compensation cost for awards under LTIP and equity compensation plans is measured at the grant date based on the fair value and is recognized as expense over the requisite service period, which is the vesting period.

The fair value of stock options granted is determined using the Black-Scholes option valuation model on the grant date. The fair value of time-based RSAs, time-based RSUs, and performance-based PSUs, for which the performance measure is return on investment capital (“ROIC”), is based on the trading price of the Company’s common stock on the date of grant. The fair value of market-based PSUs, for which the performance measure is total shareholder return (“TSR”), is determined using a Monte Carlo simulation model.

The Company elected to account for forfeitures on awards as they occur.

See Note 8, Equity, for additional information.

Research and development costs: Research and development costs are expensed as incurred and are included in selling, generaland administrative expenses (“SG&A”). Research and development expenses were $60.7 million, $57.3 million and $50.3 million for the years ended December 31, 2025, 2024 and 2023, respectively.

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QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Income taxes and uncertain tax positions: The provision for income taxes is determined using the asset and liability approachof accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year and the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The Company accounts for uncertainty in income taxes by applying the recognition threshold and measurement attributes for financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return. The Company determines whether the benefits of tax positions are probable or more likely than not sustained upon audit based upon the technical merits of the tax position. For tax positions that are determined to be more likely than not sustained upon audit, the Company recognizes the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement in the financial statements. For tax positions that are not determined to be more likely than not sustained upon audit, the Company does not recognize any portion of the benefit in the financial statements. Additionally, the Company monitors and adjusts for derecognition, classification, and penalties and interest in interim periods, with appropriate disclosure and transition thereto. Also, the amount of interest expense and income related to uncertain tax positions is computed by applying the applicable statutory rate of interest to the difference between the tax position recognized, including timing differences, and the amount previously taken or expected to be taken in a tax return. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. Finally, when applicable, the Company nets its liability for unrecognized tax benefits against deferred tax assets related to net operating losses or other tax credit carryforwards that would apply if the uncertain tax position were settled for the presumed amount at the balance sheet date.

Pursuant to the Tax Cuts and Jobs Act (“U.S. Tax Reform”), specifically the one-time tax on deemed repatriation (the “Transition Tax”), the Company has provided for U.S. income tax on its undistributed earnings of non-U.S. subsidiaries. However, the Company is subject to and will incur other taxes, such as withholding taxes and dividend distribution taxes, if these undistributed earnings were ultimately remitted to the U.S. The Company currently intends to reinvest its future undistributed earnings of non-U.S. subsidiaries to support working capital needs and certain other growth initiatives of those subsidiaries. However, in certain cases the Company has and may in the future change its indefinite reinvestment assertion for any or all of these undistributed earnings. In this case, the Company would estimate and record a tax liability and corresponding tax expense for the amount of non-U.S. income taxes it would incur to ultimately remit these earnings to the U.S. See Note 10, Income Taxes, for additional information.

Earnings per share: In the Company’s earnings per share calculation, non-vested stock awards with rights to non-forfeitable dividends are included as part of the basic weighted average share calculation under the two-class method. See Note 11, Earnings per Share, for additional information.

Comprehensive income (loss): The Company presents Other comprehensive income (loss) in its Statements of Comprehensive Income (Loss). The Company discloses significant amounts reclassified from each component of AOCI, the related tax amounts and the income statement line items affected by such reclassifications. See Note 22, Accumulated Other Comprehensive Loss, for additional information.

Cash and cash equivalents: The Company invests temporary and excess funds in money market securities and financial instruments having maturities within 90 days. The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company has not experienced losses from the aforementioned investments.

Accounts receivable and allowance for credit losses: Trade accounts receivable subject the Company to credit risk.Trade accounts receivable are recorded at the invoiced amount and generally do not bear interest. The Company recognizes an allowance for credit losses, which represents the portion of the receivable that the Company does not expect to collect over its contractual life, considering past events and reasonable and supportable forecasts of future economic conditions. The Company’s allowance for credit losses on its trade accounts receivable is based on specific collectability facts and circumstances, the aging of outstanding receivables, and the associated collection risk the Company estimates for certain past due aging categories, and also, the general risk to all outstanding accounts receivable based on historical amounts determined to be uncollectible. The Company does not have any off-balance-sheet credit exposure related to its customers. See Note 12, Accounts Receivable and Allowance for Credit Losses, for additional information.

Inventories: Inventories are valued at the lower of cost or net realizable value, and are valued using the first-in, first-out method. See Note 13, Inventories, for additional information.

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QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Long-lived assets: PP&E is stated at gross cost, less accumulated depreciation. Depreciation is computed using the straight-line method on an individual asset basis over the following estimated useful lives: buildings and improvements, 10 to 33 years (for finance leases, the remaining term of the lease); and machinery and equipment, 4 to 10 years (for financing leases, the remaining term of the lease). The carrying values of long-lived assets are evaluated whenever changes in circumstances or current events indicate the carrying amount of such assets may not be recoverable. An estimate of undiscounted cash flows produced by the asset, or the appropriate group of assets, is compared with the carrying value to determine whether an impairment exists. If necessary, the Company recognizes an impairment loss for the difference between the carrying amount of the assets and their estimated fair value. Fair value is based on current and anticipated future cash flows. Upon sale or other disposition of long-lived assets, the applicable asset cost and accumulated depreciation are removed from the accounts and the net amount, less proceeds from disposals, is recorded in the Consolidated Statements of Operations. Expenditures for improvements that increase the estimated useful life or capacity of the assets are capitalized, whereas expenditures for repairs and maintenance are expensed when incurred. See Note 14, Property, Plant, and Equipment, for additional information.

Capitalized software: The Company capitalizes certain costs in connection with developing or obtaining software for internaluse. These costs are amortized over the expected useful life of the software- generally 3 to 5 years once the assets are ready for their intended use. In connection with implementations and upgrades to the Company’s global transaction, consolidation and other related systems, approximately $2.3 million and $2.9 million of net costs were capitalized in PP&E on the Company’s Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively.

The Company capitalizes costs incurred with the implementation of a cloud computing arrangement that is a service contract, consistent with its policy for software for internal use. The capitalized costs are reflected in “Prepaid expenses and other current assets” and "Other non-current assets" on its Consolidated Balance Sheets and expensed over the term of the related hosting arrangement.

Goodwill and other intangible assets: The Company records goodwill, definite-lived intangible assets and indefinite-livedintangible assets at fair value at the date of acquisition. Goodwill and indefinite-lived intangible assets are not amortized but tested for impairment at least annually. These tests will be performed more frequently if triggering events indicate potential impairment. In completing a quantitative goodwill impairment test, the Company compares a reporting unit’s fair value, based on future discounted cash flows, to its carrying value in order to determine if an impairment charge is warranted.

Definite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, generally for periods ranging from 5 to 24 years. The Company continually evaluates the reasonableness of the useful lives of these assets, consistent with the discussion of long-lived assets, above.

See Note 15, Goodwill and Other Intangible Assets, and Note 23, Fair Value Measures, for additional information.

Fair value measurements: Fair value is defined as an exit price, or the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. See Notes 20, 23 and 24 for additional information. The following briefly describes those three levels:

•Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, for sustainability the full term of the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

•Level 3: Unobservable inputs for the asset or liability that reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability.

Pension and other postretirement benefits: The Company maintains various noncontributory retirement plans, covering aportion of its employees in the U.S. and certain other countries, including the Netherlands, the United Kingdom (“U.K.”), Mexico, Sweden, Germany and France. The plans of the remaining non-U.S. subsidiaries are, for the most part, either fully insured or integrated with the local governments’ plans. The Company recognizes the funded status of defined benefit pension and other postretirement plans on its Consolidated Balance Sheets and also, recognizes as a component of AOCI, net of tax, the gains or losses and prior service costs that arise during the period but are not recognized as components of net periodic benefit cost. In addition, the Company recognizes a settlement charge in its Consolidated Statements of Operations when certain events occur, including plan termination or the settlement of certain plan liabilities. A settlement charge represents the immediate recognition into expense of a portion of the unrecognized loss within AOCI on the balance sheet in proportion to the share of the projected benefit obligation that was settled. The measurement date for the Company’s postretirement benefits plan is December 31.

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QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The Company’s global pension investment policies are designed to ensure that pension assets are invested in a manner consistent with meeting the future benefit obligations of the pension plans and maintaining compliance with various laws and regulations including the Employee Retirement Income Security Act of 1974. The Company establishes strategic asset allocation percentage targets and benchmarks for significant asset classes with the aim of achieving a prudent balance between return and risk. The Company’s investment horizon is generally long term, and, accordingly, the target asset allocations encompass a long-term perspective of capital markets, expected risk and return and perceived future economic conditions while also considering the profile of plan liabilities. To the extent feasible, the short-term investment portfolio is managed to match the short-term obligations, the intermediate portfolio duration is matched to reduce the risk of volatility in intermediate plan distributions, and the total return portfolio is managed to maximize the long-term real growth of plan assets. The critical investment principles of diversification, assessment of risk and targeting the optimal expected returns for given levels of risk are applied. The Company’s investment guidelines prohibit the use of securities such as letter stock and other unregistered securities, commodities or commodity contracts, short sales, margin transactions, private placements (unless specifically addressed by addendum), or any derivatives, options or futures for the purpose of portfolio leveraging.

The target asset allocation is reviewed periodically and is determined based on a long-term projection of capital market outcomes, inflation rates, fixed income yields, returns, volatilities and correlation relationships. The interaction between plan assets and benefit obligations is periodically studied to assist in establishing such strategic asset allocation targets. Asset performance is monitored with an overall expectation that plan assets will meet or exceed benchmark performance over rolling five-year periods. The Company’s pension committee, as authorized by the Company’s Board, has discretion to manage the assets within established asset allocation ranges approved by senior management of the Company. See Note 20, Pension and Other Postretirement Benefits, for additional information.

Derivatives: The Company uses interest rate swap agreements to manage risk, including exposure to variability in interest payments associated with its variable rate debt. Interest rate swaps are designated as cash flow hedges and, as such, the contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in AOCI to the extent effective and reclassified to interest expense in the period during which the transaction affects earnings or it becomes probable that the forecasted transaction will not occur.

The Company uses fixed-for-fixed cross-currency swap agreements to manage risk, including to hedge the variability of exchange rates of our foreign net investments. The fixed-for-fixed cross-currency swap agreements are designated as net investment hedges and, as such, the agreements are marked to market at each reporting date and any unrealized gains or losses are included in unrealized currency translation adjustments, within AOCI. The Company uses the spot method to evaluate the effectiveness of the net investment hedges.

The Company uses foreign exchange forward contracts to economically hedge the impact of variability in exchange rates on certain assets and/or liabilities denominated in foreign currencies. Forward contracts are marked-to-market at each reporting date, with changes in the fair value of the underlying instruments, as well as gains and losses on the hedged foreign currency transactions, recognized in earnings in Other (expense) income, net. The fair value of forward contracts are determined from sources independent of the Company, including the financial institutions which are party to the derivative instruments. See Note 24, Hedging Activities, for additional information.

Environmental liabilities and expenditures: Accruals for environmental matters are recorded when it is probable that a liabilityhas been incurred and the amount of the liability can be reasonably estimable. If there is a range of estimated liability and no amount in that range is considered more probable than another, then the Company records the lowest amount in the range. Environmental costs and remediation costs are capitalized if the costs extend the life, increase the capacity or improve safety or efficiency of the property from the date acquired or constructed, and/or mitigate or prevent contamination in the future. See Note 25, Commitments and Contingencies, for additional information.

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QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Note 2 – Business Combinations

Dipsol

In April 2025, the Company acquired 100% of the outstanding equity interests of Dipsol for approximately $185.6 million (27.7 billion JPY), which included approximately $30.1 million (4.5 billion JPY) of acquired cash for a net purchase price of approximately $155.5 million (23.2 billion JPY). In July 2025, the Company satisfied all routine and customary post-closing conditions and finalized the purchase price with no adjustments. The Company funded the acquisition purchase price with borrowings under its existing credit facility. In connection with the acquisition of Dipsol, the Company entered into foreign currency forward contracts, which resulted in a $187.0 million cash payment and a $1.4 million foreign currency loss recognized during the year ended December 31, 2025. Dipsol is headquartered in Japan and is a leading supplier of surface treatment and plating solutions and services primarily for the automotive and other industrial applications end markets. Dipsol has operations in several countries, and these operations are reported within the Company’s respective Americas, EMEA, and Asia/Pacific segments. This acquisition expands the Company’s advanced solutions businesses in attractive end markets with solid growth characteristics. Dipsol also provides significant cross-selling opportunities and enhances the Company’s ability to meet the needs of our customers across the globe.

The following table presents the preliminary estimated fair values of Dipsol assets acquired and liabilities assumed as of the acquisition date:

Fair value of assets acquired

Cash and cash equivalents $ 30,084

Accounts receivable 16,481

Prepaid expenses and other current assets 1,231

Property, plant and equipment 39,450

Right-of-use lease assets 2,534

Other intangible assets 55,000

Investments in associated companies 5,096

Deferred tax assets 989

Other non-current assets 4,165

Total Assets Acquired $ 172,992

Fair value of liabilities assumed

Accounts payable $ 6,763

Accrued compensation 1,528

Other accrued liabilities 2,415

Long-term lease liabilities 1,446

Deferred income tax liabilities 25,836

Total Liabilities Assumed $ 37,988

Noncontrolling interest (2,451)

(1) The Company recorded approximately $0.2 million of net measurement period adjustments during the year ended December 31, 2025 to reflect changes in net working capital and tax balances. All measurement period adjustments were offset against goodwill.

As of December 31, 2025, the allocation of the purchase price has not been finalized and the one-year measurement period has not ended. Further adjustments may be necessary, primarily for working capital adjustments and tax balances, as a result of the Company’s ongoing assessment of additional information related to the fair value of assets acquired and liabilities assumed.

The Company allocated $55.0 million of the purchase price to intangible assets across the Americas, EMEA, and Asia/Pacific segments. Customer relationships, product technologies, and trademarks will be amortized over 14 years, 8 years, and 13 years, respectively.

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QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The following table presents the intangible assets recognized for each reportable segment:

Americas EMEA Asia/Pacific Total

The Company recognized $53.1 million of goodwill, which is comprised of $46.9 million in the Asia/Pacific segment, $5.8 million in the Americas segment, and $0.4 million in the EMEA segment. The goodwill is not deductible for tax purposes. The goodwill is primarily attributable to expected synergies.

Total sales included in the Consolidated Statement of Operations for the year ended December 31, 2025 was $62.7 million. Total loss before taxes included in the Consolidated Statement of Operations for the year ended December 31, 2025 was $5.4 million, which includes $6.0 million amortization of the fair value step-up in inventories and $4.9 million depreciation expense recorded in connection with the fair value step-up of property, plant, and equipment and amortization expense recorded for its definite-lived intangible assets.

Natech

In April 2025, the Company acquired 100% of the outstanding equity interests of Natech, Ltd., (“Natech”) for approximately $6.5 million, which includes an initial cash payment of $6.0 million and a deferred payment of $0.5 million, subject to routine and customary post-closing adjustments, including an adjustment for working capital. Assets acquired included cash and cash equivalents of $1.5 million. Natech is based in the United Kingdom and is a manufacturer of surface treatment chemicals for a variety of industrial applications. Natech is reported as part of the EMEA reportable segment. This acquisition strengthens Quaker Houghton’s overall surface treatment product and application capabilities within Europe. The Company allocated $2.1 million of the purchase price to intangible assets and recognized $2.6 million of goodwill in the EMEA segment, none of which is deductible for tax purposes. The goodwill is primarily attributable to expected growth synergies. During the third quarter of 2025, the Company settled the working capital adjustment for an immaterial amount. As of December 31, 2025, the allocation of the purchase price has been finalized.

CSI

In February 2025, the Company acquired 100% of the outstanding equity interests of Chemical Solutions & Innovations (Pty) Ltd. (“CSI”), for approximately $3.9 million, subject to routine and customary post-closing adjustments, including an adjustment for working capital. CSI is based in South Africa and is a supplier of metalworking fluids and lubricants to the South African market. CSI is reported as part of the EMEA reportable segment. This acquisition strengthens Quaker Houghton’s position in South Africa and expands the Company’s presence in that region. The Company allocated $1.4 million of the purchase price to intangible assets and recognized $1.7 million of goodwill in the EMEA segment, none of which is deductible for tax purposes. The goodwill is primarily attributable to expected growth synergies. During the third quarter of 2025, the Company settled the working capital adjustment for an immaterial amount. As of December 31, 2025, the allocation of the purchase price has been finalized.

Previous Acquisitions

In July 2024, the Company acquired 100% of the outstanding equity interests of the Sutai Group (“Sutai”), for approximately $16.2 million, including an initial cash payment of $14.6 million, subject to routine and customary post-closing adjustments related to working capital and net indebtedness levels, as well as earn-out provisions with an initial estimated payout of $1.6 million related to the finalization of 2024 and 2025 earnings. Assets acquired included cash and cash equivalents of $5.5 million. The Company recorded incremental income of $0.8 million during the year ended December 31, 2025 relating to adjustments to these earnout provisions in Other (expense) income, net on the Consolidated Statements of Operations. As of December 31, 2025, the Company does not have any remaining earnout liabilities recorded on its Consolidated Balance Sheets. Sutai is based in Japan and provides impregnation treatment products and services to the automotive and other industries. Sutai is reported as part of the Asia/Pacific reportable segment. This acquisition strengthens Quaker Houghton’s technology portfolio, enabling the Company to better support and optimize production processes for customers across the Japanese, Asia Pacific and global markets. The Company allocated $3.1 million of the purchase price to intangible assets and recognized $5.5 million of goodwill in the Asia/Pacific segment, none of which is deductible for tax purposes. The goodwill is primarily attributable to expected synergies. During the first quarter of 2025, the Company settled the working capital adjustment for an immaterial amount which impacted the residual goodwill recorded. As of December 31, 2025, the allocation of the purchase price has been finalized.

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QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

During February 2024, the Company acquired 100% of the outstanding equity interests of I.K.V. Tribologie IKVT and its subsidiaries (“IKV”) for $35.2 million, including an initial cash payment of $29.7 million, subject to routine and customary post-closing adjustments related to working capital and net indebtedness levels as well as earn-out provisions related to the finalization of 2023 earnings. Assets acquired included approximately $4.8 million of cash and cash equivalents. IKV, which is part of the Company’s EMEA segment, specializes in high-performance lubricants and greases, including original equipment manufacturer first-fill greases that are primarily used in the automotive, aerospace, electronics and other industrial markets. The acquisition of IKV strengthens the Company’s position in first-fill greases. The Company allocated $15.0 million of the purchase price to intangible assets, comprised of approximately $11.1 million of customer relationships to be amortized over 16 years; $3.2 million of product technologies to be amortized over 14 years; and $0.7 million of trademarks to be amortized over 5 years. In addition, the Company recognized $16.4 million of goodwill in the EMEA segment, none of which is deductible for tax purposes. The goodwill is primarily attributable to expected cost and growth synergies. In July 2024, the 2023 earnings were finalized and the Company made a payment of $5.5 million in connection with the post-closing adjustments and earn-out provision. As of December 31, 2025, the allocation of the purchase price has been finalized.

The results of operations of Dipsol, Natech, CSI, Sutai and IKV subsequent to the acquisition dates are included in the Consolidated Statements of Operations for the year ended December 31, 2025.

During the year ended December 31, 2025, the Company recognized $12.0 million of acquisition-related expenses including legal, financial, consulting and other costs, compared to $1.9 million during the year ended December 31, 2024. There were no acquisition-related expenses recognized during the year ended December 31, 2023. These costs are included in Selling, general and administrative expenses (“SG&A”) in the Consolidated Statements of Operations.

Certain pro forma and other information is not presented, as the operations of the acquired assets and businesses are not considered material to the overall operations of the Company for the periods presented.

Note 3 – Recently Issued Accounting Standards

Recently Adopted Accounting Standards

The Company has adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures beginning with the 2024 Form 10-K and the Form 10-Q for the period ended March 31, 2025. This ASU expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, defined as those expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included in the reported measure of segment profit or loss. The Company disclosed that the CODM assesses segment performance and makes decisions about allocating resources to its operating segments using segment operating earnings. Based on the Company’s assessment, the Company determined that product costs are significant segment expenses that are regularly provided to the CODM and included in segment operating earnings. See Note 4, Business Segments, for additional information.

The Company has adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures on a prospective basis in this Report. Pursuant to this ASU, the Company disclosed additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate (the “rate reconciliation”) for federal, state, and foreign income taxes, which required greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeded a specified threshold. Additionally, the Company disclosed income taxes paid disaggregated by federal, state, and foreign taxes and further disaggregated these disclosures in certain jurisdictions where income taxes paid exceeded a certain threshold. See Note 10, Income Taxes, for additional information.

Recently Issued Accounting Standards Not Yet Adopted

The FASB issued ASU 2024-03, Income Statement- Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses in November 2024. This ASU requires public business entities (“PBEs”) to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to the financial statements, including disclosing the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization in each relevant expense caption. It also requires PBEs to disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and to disclose the total amount of selling expenses, and in the annual reporting periods, an entity’s definition of selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the disclosure requirements of this standard and the impact on its consolidated financial statements.

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QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

KWR US Equity

KWR · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

KWR US Equity☆

KWR · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

KWR US Equity