Air Products makes gases that factories, hospitals, refineries, and chip manufacturers need every single day. Oxygen, nitrogen, hydrogen, argon, helium: these are not optional inputs. Customers pipe them directly into their production lines or take delivery by tanker truck. The company gets paid through long-term contracts, often 15 to 20 years, with built-in clauses that pass energy cost increases straight through to the customer. Over 90% of sales come from this industrial gases business, split across four regions: the Americas, Asia, Europe, and the Middle East and India. The diagram below traces where the money goes.
Five years of financial data tell a story with two distinct chapters. The first chapter, from 2021 to 2023, shows a company growing fast. Revenue climbed from $10.3 billion in 2021 to $12.7 billion in 2022, driven partly by higher energy costs passed through to customers. Gross margin compressed in 2022 as those energy costs rose, then recovered as prices stabilised. The second chapter, from 2023 onward, shows something more complicated. Revenue has edged down each year since its 2022 peak, reaching $12.0 billion in 2025. Gross margin has actually improved, sitting at 31.4% in 2025 compared to 26.5% in 2022. That is the good news. The harder news is debt. Net debt has risen sharply every single year, from $2.4 billion in 2021 to $15.1 billion in 2025. That is a lot of borrowed money, and it reflects years of heavy spending on big construction projects.
The debt buildup was intentional. Air Products placed a very large bet on clean hydrogen, spending billions to build giant facilities that would produce hydrogen with little or no carbon emissions. The NEOM Green Hydrogen Project in Saudi Arabia is the most prominent example, and it is still under construction with an expected completion in 2027. But in fiscal year 2025, the company took a hard look at its project list and cancelled or scaled back several of those clean energy projects. The write-downs from those cancellations produced a pre-tax charge of approximately $3.7 billion, which turned what would have been a profitable year into a reported net loss of $354 million. Strip out those one-time charges and the underlying business earned an adjusted $12.03 per share, only slightly below the prior year's adjusted $12.43.
A new chief executive, Eduardo Menezes, joined in February 2025 and quickly signalled a change in direction. The focus shifted back to the core industrial gases business. Capital spending is being pulled back. The company says it remains committed to raising its dividend, which it has increased for 43 consecutive years. In fiscal 2025, it returned approximately $1.6 billion to shareholders through dividends alone. The adjusted earnings before interest, taxes, depreciation, and amortisation (a measure of operating cash generation before big non-cash items) actually grew 1% to $5.1 billion in 2025, which suggests the underlying gas business is still generating real cash even as the headline numbers look messy.
The core industrial gas business benefits from exactly this kind of model. Roughly half of all revenue comes from on-site supply arrangements locked into contracts of 15 to 20 years. Customers in refining, chemicals, electronics, and metals do not easily walk away. That stickiness is why the Americas segment, the largest single region, still posted operating income of $1.5 billion in fiscal 2025 with a 29.6% operating margin, even in a year full of disruption.
The risks the company faces are specific, not generic. First, large project execution: building billion-dollar facilities across multiple continents means delays, cost overruns, and the possibility that a project gets cancelled after real money has already been spent. That is exactly what happened in fiscal 2025. Second, clean hydrogen policy risk: one cancelled green hydrogen project in 2025 triggered a large loss after a regulatory change made the project uneconomical. The U.S. Inflation Reduction Act provided tax credits that made these projects viable. If those credits shrink or disappear, the economics of projects still under construction could shift. Third, international exposure: about 60% of sales come from outside the United States, with major operations and projects in China, India, the Middle East, and Uzbekistan. Currency swings, tariffs, and political instability all introduce variability that a domestic-only business would not face.
One more risk sits quietly in the background. Helium demand has been weak globally, and helium pricing pressure showed up in both the Asia and Americas segments in 2025. Helium is sourced globally from underground reservoirs and stored in containers and underground facilities in Texas. Unlike oxygen or nitrogen, which are made by separating air, helium supply is harder to control. If demand stays soft or supply tightens unexpectedly, it adds noise to results in multiple regions at once.