SQM - Q1 2026 Earnings Analysis

Performance Highlights

SQM reported Q1 2026 revenues of $1.76 billion, a 70% year-over-year increase that exceeded expectations, with net income of $364.7 million ($1.28 per share) rising 165% and Adjusted EBITDA reaching $837 million at a 47.6% margin. Gross profit expanded to 44.2% of revenues from 29.4% in the prior-year period, reflecting both volume scale and sharp price recovery across key business lines.

The single most important driver was lithium, where Nova Andino Litio delivered 62,400 MT of LCE at an average realized price of approximately $17.8 per kilogram, roughly 95% higher year-on-year, with the segment contributing 75% of consolidated gross profit. Iodine revenues rose 8% on 7% volume growth and prices of $72.3 per kilogram, while Specialty Plant Nutrition revenues grew 13% as Chinese potassium nitrate export restrictions created meaningful supply gaps that SQM is positioned to fill.

Management Outlook and Forward Catalysts

Management raised full-year lithium volume guidance to approximately 15% growth versus 2025, targeting over 270,000 MT from Salar de Atacama alone, while also lifting SPN volume guidance to at least 10% growth and signalling Q2 lithium realized prices could exceed Q1 levels. The Salar Futuro environmental filing is expected before end of Q3 2026, with a $3 billion investment anticipated and production start projected around 2030, establishing the next long-cycle growth platform for Nova Andino.

The central investor debate centres on whether the tight lithium supply-demand balance and elevated pricing persist through 2026 or reverse as new supply enters, alongside execution risk on Kwinana refinery ramp-up to nameplate capacity in 2027 and the scale and timing of CapEx commitments across Chile, Australia, and the Salar Futuro project. Bulls will focus on BESS demand now estimated at 30% of global lithium consumption and SPN share gains from China's export restrictions, while bears will watch iodine cost creep, the mining royalty rate running at 11%-12%, and capital allocation discipline given rising CORFO obligations.