GrafTech Narrows Q3 Loss, But 9-Month Deficit Widens Amid Higher Interest Costs

Ticker: EAF · Form: 10-Q · Filed: Oct 24, 2025 · CIK: 931148

Sentiment: bearish

Topics: Graphite Electrodes, EAF Steel Industry, Net Loss, Cash Burn, High Debt, Cyclical Business, Manufacturing

TL;DR

**EAF is burning cash and drowning in debt, making it a risky bet despite a slight Q3 sales bump.**

AI Summary

GrafTech International Ltd. (EAF) reported a net loss of $28.48 million for the three months ended September 30, 2025, a slight improvement from the $36.07 million net loss in the same period of 2024. However, the net loss for the nine months ended September 30, 2025, significantly widened to $154.72 million, compared to $81.69 million in 2024. Net sales increased by 10.2% to $143.99 million in Q3 2025 from $130.65 million in Q3 2024, but decreased by 4.4% to $387.68 million for the nine-month period from $404.57 million in 2024. Gross profit improved to $10.31 million in Q3 2025 from a loss of $12.07 million in Q3 2024. The company's operating loss narrowed to $5.12 million in Q3 2025 from $26.28 million in Q3 2024. Interest expense surged to $24.52 million in Q3 2025 from $16.50 million in Q3 2024, contributing to the overall loss. Cash and cash equivalents decreased from $256.25 million at December 31, 2024, to $177.64 million at September 30, 2025, with net cash used in operating activities totaling $60.72 million for the nine-month period.

Why It Matters

GrafTech's continued net losses and significant cash burn from operations, totaling $60.72 million over nine months, signal ongoing financial strain for investors. The company's dependence on the cyclical EAF steel industry and rising interest expenses, up to $79.78 million year-to-date, pose substantial risks to profitability and liquidity. While Q3 sales showed a modest increase, the overall nine-month revenue decline and persistent losses highlight challenges in a competitive graphite electrode market. This performance could impact employee morale and job security, while customers might face potential supply chain uncertainties if financial pressures intensify. The broader market for EAF steel production relies on stable graphite electrode suppliers, and GrafTech's struggles could ripple through the industry.

Risk Assessment

Risk Level: high — GrafTech reported a net loss of $154.72 million for the nine months ended September 30, 2025, and a stockholders' deficit of $194.36 million, indicating severe financial distress. The company used $60.72 million in cash from operating activities during the same period, demonstrating a significant inability to generate cash internally, further exacerbated by long-term debt of $1.09 billion.

Analyst Insight

Investors should exercise extreme caution and consider divesting from EAF given the persistent net losses, substantial cash burn from operations, and a growing stockholders' deficit. The high long-term debt of $1.09 billion and increasing interest expenses suggest significant financial leverage and potential liquidity issues.

Financial Highlights

debt To Equity
N/A
revenue
$387.68M
operating Margin
N/A
total Assets
$1.11B
total Debt
$1.09B
net Income
-$154.72M
eps
N/A
gross Margin
2.2%
cash Position
$177.64M
revenue Growth
-4.4%

Key Numbers

Key Players & Entities

FAQ

What were GrafTech's net sales for the third quarter of 2025?

GrafTech International Ltd.'s net sales for the three months ended September 30, 2025, were $143.99 million, an increase from $130.65 million in the same period of 2024.

How much net loss did GrafTech report for the nine months ended September 30, 2025?

For the nine months ended September 30, 2025, GrafTech reported a net loss of $154.72 million, which is a significant increase from the $81.69 million net loss reported for the same period in 2024.

What is GrafTech's current long-term debt as of September 30, 2025?

As of September 30, 2025, GrafTech International Ltd. had long-term debt totaling $1.09 billion, an increase from $1.08 billion at December 31, 2024.

Did GrafTech generate positive cash flow from operations in the first nine months of 2025?

No, GrafTech International Ltd. used $60.72 million in cash from operating activities for the nine months ended September 30, 2025, indicating a negative cash flow from operations.

What was the impact of interest expense on GrafTech's financial results?

Interest expense significantly impacted GrafTech's financial results, increasing to $24.52 million in Q3 2025 from $16.50 million in Q3 2024, and reaching $79.78 million for the nine months ended September 30, 2025, up from $47.74 million in the prior year.

What is GrafTech's stockholders' deficit as of September 30, 2025?

GrafTech International Ltd. reported a total stockholders' deficit of $194.36 million as of September 30, 2025, which has worsened from a deficit of $78.90 million at December 31, 2024.

How has GrafTech's cash and cash equivalents changed since the end of 2024?

GrafTech's cash and cash equivalents decreased from $256.25 million at December 31, 2024, to $177.64 million as of September 30, 2025, reflecting the cash used in operating and investing activities.

What are the primary risks facing GrafTech International Ltd.?

Primary risks for GrafTech include its dependence on the global EAF steel industry, the cyclical nature of its business, continued overcapacity in the graphite electrode industry, rising raw material costs, and significant indebtedness, all contributing to prolonged periods of reduced profitability and net losses.

What was GrafTech's gross profit for the third quarter of 2025?

GrafTech International Ltd. achieved a gross profit of $10.31 million for the three months ended September 30, 2025, a notable improvement from a gross loss of $12.07 million in the same period of 2024.

What was the effect of the 1-for-10 reverse stock split on GrafTech's shares?

The 1-for-10 reverse stock split, effective August 29, 2025, retroactively adjusted all share and per share data presented in the financial statements, including the basic loss per common share of $(1.10) for Q3 2025.

Risk Factors

Industry Context

GrafTech operates in the graphite electrode industry, a critical component for electric arc furnace (EAF) steel production. The industry is cyclical and sensitive to global steel demand, raw material costs (like petroleum coke and pitch), and energy prices. Competition is concentrated among a few global players.

Regulatory Implications

GrafTech is subject to standard financial reporting regulations (SEC filings) and environmental regulations related to its manufacturing processes. Compliance with these regulations requires ongoing investment and can lead to penalties if not met.

What Investors Should Do

  1. Monitor interest expense trends closely, as the significant increase is a primary driver of losses.
  2. Analyze the sustainability of the Q3 2025 gross profit improvement against the backdrop of declining year-to-date sales.
  3. Assess the company's ability to manage its cash burn and improve operating cash flows to avoid further depletion of cash reserves.
  4. Evaluate the long-term impact of the worsening stockholders' deficit on the company's financial stability and access to capital.
  5. Understand the drivers behind the year-to-date sales decline and assess the outlook for steel demand.

Key Dates

Glossary

Stockholders' Deficit
A situation where a company's total liabilities exceed its total assets, resulting in a negative equity value. (GrafTech's stockholders' deficit has significantly worsened, indicating a precarious financial position.)
Lower of cost or market inventory valuation adjustment
An accounting principle requiring inventory to be valued at its historical cost or its current market value, whichever is lower. An adjustment is made if the market value falls below cost. (This adjustment impacts the cost of goods sold and gross profit, reflecting potential declines in inventory value.)
Accumulated deficit
The total net losses of a company since its inception that have not been offset by net income. (GrafTech's accumulated deficit has grown substantially, highlighting a history of unprofitability.)
Reverse stock split
A corporate action where a company reduces the total number of its outstanding shares by consolidating existing shares into fewer, proportionally more valuable shares. (GrafTech implemented a 1-for-10 reverse stock split, affecting share count and per-share metrics.)

Year-Over-Year Comparison

Compared to the prior year, GrafTech shows a mixed performance. While Q3 2025 net sales increased by 10.2% and gross profit turned positive ($10.31M vs. -$12.07M loss), the nine-month period reveals a concerning trend with net sales down 4.4% and a significantly widened net loss ($154.72M vs. $81.69M). The company's cash position has decreased substantially, and its stockholders' deficit has worsened considerably, indicating increased financial strain despite short-term operational improvements in Q3.

Filing Stats: 4,711 words · 19 min read · ~16 pages · Grade level 20 · Accepted 2025-10-24 13:02:49

Key Financial Figures

Filing Documents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION:

Financial Statements

Item 1. Financial Statements Condensed Consolidated Balance Sheets (unaudited) 5 Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) 6 Condensed Consolidated Statements of Cash Flows (unaudited) 7 Condensed Consolidated Statements of Stockholders' (Deficit) Equity (unaudited) 8 Notes to the Condensed Consolidated Financial Statements (unaudited) 10

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 23

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 39

Controls and Procedures

Item 4. Controls and Procedures 40

OTHER INFORMATION

PART II. OTHER INFORMATION:

Legal Proceedings

Item 1. Legal Proceedings 41

Risk Factors

Item 1A. Risk Factors 41

Other Information

Item 5. Other Information 41

Exhibits

Item 6. Exhibits 43 SIGNATURE 44 Presentation of Financial, Market and Industry Data We present our financial information on a consolidated basis. Unless otherwise noted, when we refer to dollars, we mean U.S. dollars. Certain market and industry data included in this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025 (the "Report") has been obtained from third-party sources that we believe to be reliable. Market estimates are calculated by using independent industry publications, government publications and third-party forecasts in conjunction with our assumptions about our markets. We cannot guarantee the accuracy or completeness of this market and market share data and have not independently verified it. None of the sources have consented to the disclosure or use of data in this Report. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the headings "Cautionary Note Regarding Forward-Looking Statements" in this Report and "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 ("Annual Report on Form 10-K") filed with the Securities and Exchange Commission ("SEC") on February 14, 2025 and Quarterly Report on Form 10-Q ("Q2 Quarterly Report on Form 10-Q") for the quarter ended June 30, 2025 filed with the SEC on July 25, 2025. Cautionary Note Regarding Forward-Looking Statements This Report may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our current views with respect to, among other things, financial projections, plans and objectives of management for future operations, future economic performance and short-term and long-term liquidity. Examples of forward-looking statements includ

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data) (Unaudited) September 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 177,635 $ 256,248 Accounts and notes receivable, net of allowance for doubtful accounts of $ 3,571 as of September 30, 2025 and $ 7,114 as of December 31, 2024 88,303 93,576 Inventories 243,293 231,241 Prepaid expenses and other current assets 60,551 55,732 Total current assets 569,782 636,797 Property, plant and equipment 968,866 910,247 Less: accumulated depreciation 487,390 427,548 Net property, plant and equipment 481,476 482,699 Deferred income taxes 13,717 53,139 Other assets 42,860 51,639 Total assets $ 1,107,835 $ 1,224,274 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 62,273 $ 72,833 Accrued income and other taxes 10,583 9,642 Other accrued liabilities 43,224 53,362 Interest payable 18,886 2,070 Tax Receivable Agreement — 2,022 Total current liabilities 134,966 139,929 Long-term debt 1,092,759 1,086,915 Other long-term obligations 47,472 48,559 Deferred income taxes 26,998 23,971 Tax Receivable Agreement long-term — 3,802 Commitments and contingencies - Note 8 Stockholders' deficit: Preferred stock, par value $ 0.01 , 30,000,000 shares authorized, none issued (1) — — Common stock, par value $ 0.01 , 300,000,000 shares authorized, 25,815,812 and 25,726,420 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively (1) 2,582 2,572 Additional paid-in capital 758,192 755,338 Accumulated other comprehensive loss ( 7,302 ) ( 43,359 ) Accumulated deficit ( 947,832 ) ( 793,453 ) Total stockholders' deficit ( 194,360 ) ( 78,902 ) Total liabilities and stockholders' deficit $ 1,107,835 $ 1,224,274 See accompanying Notes to the Condensed Consolidated Financial Statements (1) All share and per share data

(CONT'D)

PART I (CONT'D) GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Organization and Summary of Significant Accounting Policies A. Organization GrafTech International Ltd. (the "Company" or "GrafTech") is a leading manufacturer of high-quality graphite electrode products essential to the production of electric arc furnace ("EAF") steel and other ferrous and non-ferrous metals. References herein to "GTI," "we," "our," or "us" refer collectively to the Company and its subsidiaries. The Company's common stock is listed on the New York Stock Exchange "NYSE" under the symbol "EAF." The Company's only reportable segment, Industrial Materials, is comprised of its two major product categories: graphite electrodes and petroleum needle coke products. Petroleum needle coke is our key raw material used in the production of graphite electrodes. The Company's vision is to provide highly engineered graphite electrode products, services and solutions to EAF operators. B. Basis of Presentation The interim condensed consolidated financial statements are unaudited; however, in the opinion of management, they have been prepared in accordance with Rule 10-01 of Regulation S-X and in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The December 31, 2024 Consolidated Balance Sheet data included herein was derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K, but does not include all disclosures required by GAAP in audited financial statements. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the accompanying notes, contained in the Company's Annual Report on Form 10-K. The unaudited condensed consolidated financial statements reflect all adjustments (all of which are of a normal, recurring nature) which man

(CONT'D)

PART I (CONT'D) GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) C. New Accounting Standards Recently Adopted Accounting Standards In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The guidance was applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods were based on the significant segment expense categories identified and disclosed in the period of adoption. The adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which is intended to enhance the transparency, decision usefulness and effectiveness of income tax disclosures. The amendments in this ASU require a public entity to disclose a tabular tax rate reconciliation, using both percentages and currency, with specific categories. A public entity is also required to provide a qualitative description of the states and local jurisdictions that make up the majority of the effect of the state and local income tax category and the net amount of income taxes paid, disaggregated by federal, state and foreign taxes and also disaggregated by individual jurisdictions. The amendments also remove certain disclosures that are no longer considered cost beneficial. The amendments are effective prospectively for annual

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