Breaking Down Perimeter Solutions, SA (PRM) Financial Health: Key Insights for Investors

You're looking at Perimeter Solutions, SA (PRM) and seeing a specialty chemicals company with a market capitalization of roughly $3.83 billion as of November 2025, which looks compelling on the surface, but the real story is in the details, especially the divergence between their reported and adjusted profitability. Honestly, the company is growing: their year-to-date Q2 2025 net sales jumped 26% to $234.7 million, and Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) soared 42% to $109.4 million, driven hard by the Fire Safety segment. That's a defintely strong operational performance, but you need to understand the full picture.

Here's the quick math: while the company posted a positive year-to-date GAAP net income of $24.5 million, the second quarter alone saw a GAAP net loss of $32.2 million, primarily due to non-recurring items and amortization, even as adjusted net income hit $57.1 million in the same quarter. This gap-the difference between what the accountants say and what management wants you to focus on-is the most critical near-term risk to map. So, before you commit capital based on the consensus Buy rating and the expected 2025 EPS of $1.22, you need to know exactly what's in those adjustments and how that impacts the balance sheet's perceived weakness.

Revenue Analysis

You need to know where the money is coming from, and for Perimeter Solutions, SA (PRM), the revenue story through the third quarter of 2025 is one of solid, double-digit growth driven almost entirely by their mission-critical Fire Safety segment. The company reported year-to-date (YTD) net sales through September 30, 2025, of $550.1 million, representing a strong 16% increase over the same period in 2024.

The company's revenue streams are clearly split into two main business segments: Fire Safety and Specialty Products. Fire Safety, which includes fire retardants and suppressants used in wildfire management and industrial applications, is the undisputed heavyweight. It's the core business, and you can see that in the numbers. The Specialty Products segment, focusing on phosphorus-based chemicals, provides a necessary diversification but contributes a smaller piece of the pie.

Here's the quick math on how the segments contributed to the YTD 2025 revenue:

The year-over-year growth rate of 16% for YTD 2025 is defintely a positive signal, especially considering the massive 74.16% growth the company saw in the full year 2024, which was a tough comp to beat. What this estimate hides is the seasonality of the Fire Safety business, which is heavily dependent on the severity and timing of the North American fire season. You're betting on wildfires, essentially.

The most significant change in the revenue profile is the continued, dominant reliance on the Fire Safety segment, which grew 15% YTD 2025 to hit $430.8 million. The Specialty Products segment actually showed a faster percentage growth at 20%, but since it only accounted for $119.3 million in sales, the absolute dollar impact is much smaller. This segment's growth is important, though, because it provides a more stable, non-seasonal counter-balance to the Fire Safety volatility. Anyway, the company's core mission is clear: Mission Statement, Vision, & Core Values of Perimeter Solutions, SA (PRM).

If you're an investor, you need to watch the Fire Safety revenue mix closely. While it drives the top line, its dependence on unpredictable environmental factors means the growth is less predictable quarter-to-quarter. The strong performance of the Specialty Products segment, with its 20% growth, is a welcome sign of internal momentum that could help smooth out future earnings volatility. That's where your stability comes from.

Profitability Metrics

You need to know if Perimeter Solutions, SA (PRM) is turning its strong revenue growth into real profit, and the answer for 2025 year-to-date is a qualified yes, driven by exceptional gross margins. Through the first half of 2025, Perimeter Solutions reported a Gross Profit Margin of approximately 55.26%, which is significantly higher than the broader Materials Sector average. The challenge remains in translating that operational strength consistently to the bottom line (net income).

Here's the quick math on profitability for the year-to-date period ending June 30, 2025, which shows a strong operational profile but a more modest net return due to non-core expenses. We're using Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) as a cleaner proxy for core operating profit, since it strips out the noise of large, non-cash amortization expenses. This is defintely a high-margin business.

Perimeter Solutions' operational efficiency, particularly in its Fire Safety segment, is truly impressive. The Gross Profit Margin of 55.26% for YTD 2025 is a clear indicator that the company has pricing power and manages its cost of goods sold (COGS) extremely well. This trend has been improving; the latest twelve months (LTM) Gross Profit Margin was already high at 57.0%, showing a sustained structural advantage over competitors. The Fire Safety segment's Adjusted EBITDA increased a massive 58% to $87.7 million YTD 2025, which is the primary engine of this operational strength.

• PRM's YTD Gross Margin (55.26%) dwarfs the Materials Sector average of 43.6%.
• High Adjusted EBITDA Margin (46.61%) shows excellent operational cost management.
• Net Profit Margin (10.44%) is solid, but lower due to non-operating items.

The key risk here is the gap between the high Adjusted EBITDA Margin and the lower Net Profit Margin. In Q2 2025 alone, the company reported a net loss of $32.2 million, despite a gross profit of $101.5 million. This volatility stems from non-cash items like amortization and other operating expenses, which can swing net income wildly. As an investor, you must decide if you believe the high-quality, high-margin core business (represented by the 46.61% Adjusted EBITDA margin) is worth the current drag from these below-the-line costs. You should also check out Exploring Perimeter Solutions, SA (PRM) Investor Profile: Who's Buying and Why? to see which institutional players are buying into this operational story.

Debt vs. Equity Structure

You're looking at Perimeter Solutions, SA (PRM) and trying to figure out if their balance sheet is built on solid ground or quicksand. The direct takeaway is that Perimeter Solutions, SA runs a moderately leveraged, debt-heavy structure, but they manage it tightly, aiming for a low net leverage ratio that amplifies shareholder returns.

The company's financing is remarkably straightforward, which is a good sign for transparency. Their gross debt is primarily a single series of fixed-rate senior notes totaling $675 million as of the third quarter of 2025. This debt carries a fixed interest rate of 5% and doesn't mature until the fourth quarter of 2029, giving them long-term stability and predictability on interest expense. They also maintain a $100 million revolving credit facility that remains completely undrawn, which is a great liquidity buffer.

Here's the quick math: with cash and cash equivalents rising to $340.6 million by Q3 2025, their net debt is only about $334.4 million. That's a very clean position. This low net debt figure drives a key metric: the net debt to LTM adjusted EBITDA (Last Twelve Months Earnings Before Interest, Taxes, Depreciation, and Amortization) ratio, which stood at a low 1.0x in Q3 2025. This is a comfortable level that shows their core earnings can cover the debt quickly.

When we look at the Debt-to-Equity (D/E) ratio, which measures how much debt a company uses to finance its assets relative to the value of shareholders' equity, Perimeter Solutions, SA sits at about 0.74 (or 74.14%). To be fair, this is slightly higher than the Specialty Chemicals industry average of approximately 0.65, but it's still within a healthy range, especially when compared to the broader Chemicals industry average of 0.78. A ratio under 1.0 is defintely preferred, as it means the company's equity holders finance more of the assets than its creditors do.

Perimeter Solutions, SA's capital allocation strategy is explicit about using this debt to its advantage. They are not shy about using debt financing to 'amplify equity returns,' a private equity-like approach. They balance this by focusing on maximizing long-term per share equity value, sometimes considering special dividends to maintain their target leverage ratio. The structure is simple and flexible, notably because the senior notes have no financial maintenance covenants. This means they have operational flexibility without worrying about tripping technical defaults on their loan terms, as long as they meet their interest payments.

The financing strategy is a clear trade-off: use fixed-rate debt to lock in a low cost of capital and boost returns, but keep the net debt low enough so the leverage remains manageable. You can get more context on their long-term goals by checking out their Mission Statement, Vision, & Core Values of Perimeter Solutions, SA (PRM).

• Gross Debt (Q3 2025): $675 million in 5% fixed-rate notes.
• Net Debt (Q3 2025): $334.4 million after cash is applied.
• Leverage Target: Maintain net debt to LTM Adjusted EBITDA around 1.0x.
• Debt-to-Equity: 0.74, which is moderately higher than the Specialty Chemicals peer group.

Liquidity and Solvency

You want to know if Perimeter Solutions, SA (PRM) has the cash to cover its near-term obligations, and the quick answer is yes, defintely. The company's liquidity position is strong, backed by high current ratios and significant cash reserves, which gives management a lot of flexibility.

As of the most recent quarter (MRQ) in 2025, Perimeter Solutions, SA (PRM) reported a Current Ratio of approximately 2.22 and a Quick Ratio of about 1.70. The Current Ratio (current assets divided by current liabilities) shows the company can cover its short-term debts more than twice over. More importantly, the Quick Ratio (which strips out less-liquid inventory) sits at 1.70, indicating that even without selling inventory, the company has ample liquid assets. A ratio over 1.0 is generally considered healthy; 1.70 is excellent.

The company's working capital trends are highly seasonal, which is typical for a business heavily involved in fire safety, where demand spikes in the summer months. You see a seasonal build in net working capital (a use of cash) in the second quarter, preparing for the peak fire season. But by the third quarter of 2025, the company had a corresponding source of cash from working capital, consistent with its operational cycle. This seasonal fluctuation is predictable and well-managed.

• Current Ratio: 2.22 (MRQ 2025)
• Quick Ratio: 1.70 (MRQ 2025)
• Cash & Equivalents: $340.6 million (Q3 2025)

Looking at the cash flow statement for the first nine months ended September 30, 2025, the picture is clear. Net cash from operating activities (OCF) was a robust inflow of $219.55 million, demonstrating the core business's ability to generate cash. This strong operating cash flow easily funded the company's investing activities, which resulted in a net cash outflow of $59.83 million, mainly for capital expenditures and acquisitions like the IMS add-on product lines.

Here's the quick math on the cash flows:

The financing cash flow trend shows a focus on returning capital to shareholders, with over $40 million in common stock repurchases in the first half of 2025 alone. What this estimate hides is the company's total liquidity cushion: as of Q3 2025, they held $340.6 million in cash and cash equivalents, plus an undrawn $100 million revolving credit facility. This is a very comfortable liquidity position for a company of this size, and it minimizes any near-term liquidity concerns.

To be fair, the company does carry debt, but the high liquidity and strong operating cash flow mitigate the risk. You can read more about the long-term strategy here: Mission Statement, Vision, & Core Values of Perimeter Solutions, SA (PRM).

Valuation Analysis

You want to know if Perimeter Solutions, SA (PRM) is a buy, a hold, or a sell right now. The quick answer is that while the stock looks expensive on trailing metrics, a forward-looking view and analyst consensus suggest it's currently undervalued by a meaningful margin, with a strong growth story baked in.

As of November 19, 2025, Perimeter Solutions, SA stock trades around $26.05. The company's valuation ratios tell a story of a business priced for significant future growth, which is exactly why you need to look past the trailing numbers.

Here's the quick math on the key valuation metrics for the 2025 fiscal year:

Honestly, a trailing EV/EBITDA of 45.33 and a P/E of 49.84 would normally scare off a value investor. But the forward-looking P/E of 18.55 is much more reasonable, especially when you consider the company's Fire Safety segment is tied to long-term government contracts and wildfire trends. What this estimate hides is the potential for non-recurring revenue spikes from severe fire seasons.

Stock Momentum and Dividend Policy

The stock has had a phenomenal run, which is why the current price of $26.05 sits near the high end of its 52-week range of $8.76 to $27.74. Over the last year, the stock has climbed by an impressive 112.56% (as of mid-2025). That's a massive move, defintely showing strong investor confidence in the growth story.

Perimeter Solutions, SA is not a stock for income investors. The company currently does not pay a dividend, which means its Dividend Yield and Payout Ratio are both 0.00%. They are prioritizing capital expenditure and growth initiatives, which is typical for a company focused on expanding its market share in specialty chemicals and fire safety solutions.

• Stock price is near its 52-week high.
• No dividend, all capital is reinvested for growth.

Analyst Consensus and Fair Value

Wall Street analysts are generally bullish on Perimeter Solutions, SA. The consensus rating is a Strong Buy or a 'Buy,' with a median price target of $31.00. This target implies an upside of over 20% from the current price. Separately, a discounted cash flow (DCF) model suggests a fair value of $29.45, indicating the stock is about 12.7% undervalued right now. So, the market is giving you a chance to buy into a growth story with a built-in margin of safety, according to the professionals.

For a deeper dive into the company's operational health, you can read more at Breaking Down Perimeter Solutions, SA (PRM) Financial Health: Key Insights for Investors.

Risk Factors

You need to look past the strong headline numbers-like year-to-date (YTD) Adjusted EBITDA of $295.7 million through Q3 2025-to see the real operational and market risks facing Perimeter Solutions, SA (PRM). The biggest near-term challenge is an internal one, specifically in the Specialty Products segment, but external factors like market volatility and government contracts also deserve a hard look. We're seeing a tale of two segments, and the risks are not evenly distributed.

The core of the problem is operational risk tied to the Specialty Products division, which manufactures Phosphorus Pentasulfide (P2S5) for lubricant additives. The company has faced significant unplanned plant downtime and operational challenges at its outsourced Sauget, Illinois manufacturing facility. This is defintely not a small issue.

Here's the quick math on the impact: Year-to-date through Q3 2025, the Specialty Products segment's Adjusted EBITDA fell to $30.8 million, an 11% decrease from the prior year period. Management has stated that the missed sales opportunities from this downtime alone represent a decline of approximately $7.6 million in net sales year-to-date, and they do not expect to recover the full impact in 2025. This issue is compounded by ongoing litigation over operational control of the plant, which adds legal and strategic uncertainty to the segment's future earnings power. It's a major drag on an otherwise strong year.

Beyond the plant issues, you must also factor in external and financial risks that could hit the company's margins and revenue consistency.

• Wildfire Season Variability: The Fire Safety segment, which drove a YTD Adjusted EBITDA of $265.0 million through Q3 2025, still relies on fire activity. A mild fire season could immediately impact demand for fire retardants.
• Trade Policy and Tariffs: The company has direct cost exposure to trade policy adjustments, estimating the impact at 2% to 3% of annual Adjusted EBITDA. This is a clear financial risk that squeezes margins.
• Contract Transition Risk: Perimeter Solutions, SA (PRM) signed a new contract with the US Forest Service, which is positive for long-term consistency but includes a year-one price cut on pure gallons. This shifts revenue to more services and fixed components, but the transition itself introduces a short-term revenue headwind.

The company's mitigation strategies are clear: they are aggressively pursuing diversification through the Intelligent Manufacturing Solutions (IMS) business, which involves acquiring product lines to move into higher-margin sectors like medical devices and defense. They are also working to mitigate tariff exposure by prioritizing domestic suppliers. For the Fire Safety segment, the strategy is to reduce dependence on the North American fire season by expanding international operations, which showed strong performance across regions like Europe and Australia in 2025. The net debt to last twelve months (LTM) Adjusted EBITDA ratio stood at a manageable 1.7x as of Q2 2025, giving them financial flexibility to execute these plans. Exploring Perimeter Solutions, SA (PRM) Investor Profile: Who's Buying and Why?

The key takeaway is that while the Fire Safety segment is a strong, predictable engine, the Specialty Products segment is a source of volatility right now. You need to monitor the resolution of the Sauget plant issues-that's the single most actionable item to watch for a rebound in that segment's earnings power.

Growth Opportunities

You want to know if Perimeter Solutions, SA (PRM) is a growth story or just a cyclical play on wildfire season. The direct takeaway is this: their core Fire Safety business is durable and expanding globally, but future growth hinges on executing their diversification strategy and stabilizing the Specialty Products segment.

For the 2025 fiscal year, analysts project Perimeter Solutions, SA will deliver total revenue of approximately $576.07 million, with full-year earnings per share (EPS) estimated at $1.22. This growth is defintely not just luck; it's driven by strategic moves that smooth out the volatility of the North American fire season.

Here's the quick math on their recent performance: for the nine months ended September 30, 2025, consolidated sales hit $550.1 million, and Adjusted EBITDA was a strong $295.7 million. That's a solid foundation, but you need to look at what's driving the next leg up.

• Product Innovation: They are pushing R&D breakthroughs, especially in their Suppressants business, which is a leader in fluorine-free foams.
• Market Expansion: The international retardant business is a key growth lever, showing strong performance across Europe, the Middle East, Asia, Australia, and South America.
• Acquisitions: They are actively investing in their Industrial Maintenance Solutions (IMS) division, allocating $12.0 million to M&A in Q3 2025 alone to expand the portfolio of proprietary components.

The company's biggest strategic initiative is the new contract with the US Forest Service (USFS). This partnership is designed to increase revenue consistency by shifting the model toward more services and fixed components, moving away from a pure gallon-volume reliance. Even with a year-one price cut on the pure product, this shift creates a more predictable earnings stream, which is exactly what a mature company needs.

Competitive Moats and Earnings Estimates

Perimeter Solutions, SA holds a near-monopoly in the wildfire retardant market and a dominant 70% market share in niche engine oil additives within their Specialty Products segment. This market leadership is a significant competitive advantage (or 'moat'), reinforced by long-term supply contracts with government agencies that provide a stable revenue base.

Another powerful growth driver is the 'razor-razor blade model' in their Suppressants business. They boast a nearly 99% win rate in converting FAA 139 compliant airports from older fluorinated systems to their new fluorine-free foams. This conversion success creates a large installed customer base that generates high-margin, recurring aftermarket foam sales for years to come. That's a great setup for durable cash flow.

What this estimate hides, still, are the operational challenges in the Specialty Products segment, specifically at the outsourced Sauget, Illinois plant, which has faced unplanned downtime and litigation. The company is committed to regaining operational control, but until that happens, it remains a near-term risk to watch. You can see more on the investor base and profile by Exploring Perimeter Solutions, SA (PRM) Investor Profile: Who's Buying and Why?

Here is a snapshot of the consensus estimates for the full fiscal year 2025: