Financial Performance - Entegris reported quarterly earnings of $0.66 per share, exceeding the Zacks Consensus Estimate of $0.65 per share, but down from $0.71 per share a year ago, representing an earnings surprise of +1.54% [1] - The company posted revenues of $792.4 million for the quarter, surpassing the Zacks Consensus Estimate by 3.34%, but down from $812.65 million year-over-year [2] - Over the last four quarters, Entegris has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - Entegris shares have declined approximately 6.3% since the beginning of the year, while the S&P 500 has gained 8.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the next quarter is $0.75 on revenues of $820.04 million, and for the current fiscal year, it is $2.94 on revenues of $3.26 billion [7] Industry Context - The Electronics - Manufacturing Machinery industry, to which Entegris belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Entegris's stock performance [5][6]

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) This section provides an overview of Entegris' second-quarter 2025 financial performance, CEO commentary on industry trends, third-quarter outlook, segment details, and company profile [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Entegris reported Q2 2025 revenue above guidance, with sequential growth driven by unit-driven solutions. GAAP diluted EPS was $0.35, and non-GAAP diluted EPS was $0.66, with gross and operating margins within guidance | Metric | Value (Jun 28, 2025) | Value (Mar 29, 2025) | YoY Change (vs Jun 29, 2024) | | :--------------------------------- | :------------------- | :------------------- | :----------------------------- | | Net sales | $792.4 million | $773.2 million | -2.5% | | Gross margin (GAAP) | 44.4 % | 46.1 % | -1.8 pp | | Operating margin (GAAP) | 13.4 % | 15.8 % | -2.6 pp | | Net income (GAAP) | $52.8 million | $62.9 million | -22.0% | | Diluted EPS (GAAP) | $0.35 | $0.41 | -22.2% | | Adjusted gross margin (Non-GAAP) | 44.6 % | 46.1 % | -1.6 pp | | Adjusted operating margin (Non-GAAP) | 20.9 % | 22.1 % | -1.1 pp | | Adjusted EBITDA (Non-GAAP) | 27.3 % | 28.5 % | -0.5 pp | | Diluted EPS (Non-GAAP) | $0.66 | $0.67 | -7.0% | [CEO Commentary & Industry Outlook](index=1&type=section&id=CEO%20Commentary%20%26%20Industry%20Outlook) CEO Bertrand Loy highlighted Q2 revenue growth driven by unit-driven solutions and noted significant growth in advanced logic and HBM due to AI-enabled applications. Despite subdued overall fab activity and short-term macroeconomic uncertainties, Entegris anticipates stronger performance in H2 2025 and maintains a highly optimistic long-term industry outlook, leveraging its materials science expertise - Q2 revenue grew **2% sequentially** and exceeded guidance, driven by demand for unit-driven solutions, particularly CMP consumables, selective etch, and deposition materials[2](index=2&type=chunk) - AI-enabled applications are driving significant growth in advanced logic and HBM, while overall fab activity remains subdued[2](index=2&type=chunk) - Entegris expects stronger business performance in the second half of 2025 and maintains a strong long-term growth outlook for the market and the company, emphasizing its expertise in materials science and purity[2](index=2&type=chunk) [Third Quarter 2025 Outlook](index=2&type=section&id=Third%20Quarter%202025%20Outlook) Entegris provided guidance for the third quarter ending September 27, 2025, projecting sales between $780 million and $820 million, with corresponding GAAP and non-GAAP net income and diluted EPS ranges | Metric | Guidance Range (Sep 27, 2025) | | :--------------------------------- | :------------------------------ | | Sales | $780 million - $820 million | | GAAP Net Income | $65 million - $76 million | | GAAP Diluted EPS | $0.43 - $0.50 | | Non-GAAP Net Income | $104 million - $115 million | | Non-GAAP Diluted EPS | $0.68 - $0.75 | | Adjusted EBITDA as % of sales | ~27.5% | [Segment Overview](index=2&type=section&id=Segment%20Overview) Entegris operates two primary segments: Materials Solutions (MS), focused on materials-based solutions for device performance, and Advanced Purity Solutions (APS), providing contamination-control solutions for critical liquid chemistries and gases in semiconductor manufacturing - Materials Solutions (MS) segment provides materials-based solutions such as chemical vapor and atomic layer deposition materials, CMP slurries and pads, ion implantation specialty gases, and formulated etch and clean materials[6](index=6&type=chunk) - Advanced Purity Solutions (APS) segment offers filtration, purification, and contamination-control solutions to improve yield, device reliability, and cost by ensuring the purity of critical liquid chemistries and gases[7](index=7&type=chunk) [About Entegris](index=2&type=section&id=About%20Entegris) Entegris is a leading global supplier of critical advanced materials and process solutions for the semiconductor and other high-technology industries, with approximately 8,000 employees and ISO 9001 certification across its global operations - Entegris is a leading supplier of critical advanced materials and process solutions for the semiconductor and other high-technology industries[10](index=10&type=chunk) - The company has approximately **8,000 employees globally** and is ISO 9001 certified, with manufacturing, customer service, and research facilities in multiple countries[10](index=10&type=chunk) [Financial Results](index=5&type=section&id=Financial%20Results) This section details Entegris' condensed consolidated financial statements, including statements of operations, balance sheets, cash flows, and segment performance for recent periods [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents Entegris' GAAP income statement data for both the three-month and six-month periods ended June 28, 2025, detailing net sales, gross profit, operating income, and net income [Three Months Ended June 28, 2025](index=5&type=section&id=Three%20Months%20Ended%20June%2028%2C%202025) This subsection provides a detailed breakdown of Entegris' GAAP financial performance for the three months ended June 28, 2025, compared to prior periods | Metric | Jun 28, 2025 ($ millions) | Jun 29, 2024 ($ millions) | Mar 29, 2025 ($ millions) | | :---------------------------------- | :------------------------ | :------------------------ | :------------------------ | | Net sales | 792.4 | 812.7 | 773.2 | | Cost of sales | 440.9 | 436.9 | 416.7 | | Gross profit | 351.5 | 375.8 | 356.5 | | Operating income | 106.1 | 130.1 | 122.3 | | Net income | 52.8 | 67.7 | 62.9 | | Diluted earnings per common share | $0.35 | $0.45 | $0.41 | [Six Months Ended June 28, 2025](index=6&type=section&id=Six%20Months%20Ended%20June%2028%2C%202025) This subsection presents Entegris' GAAP financial results for the six months ended June 28, 2025, compared to the same period in the prior year | Metric | Jun 28, 2025 ($ millions) | Jun 29, 2024 ($ millions) | | :---------------------------------- | :------------------------ | :------------------------ | | Net sales | 1,565.6 | 1,583.7 | | Cost of sales | 857.6 | 856.1 | | Gross profit | 708.0 | 727.6 | | Operating income | 228.4 | 247.7 | | Net income | 115.7 | 113.0 | | Diluted earnings per common share | $0.76 | $0.74 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 28, 2025, Entegris' total assets increased to $8,449.5 million, driven by higher cash and inventories. Shareholders' equity also saw an increase, while total liabilities remained relatively stable | Metric | Jun 28, 2025 ($ millions) | Dec 31, 2024 ($ millions) | Change ($ millions) | | :--------------------------------- | :------------------------ | :------------------------ | :------------------ | | Total current assets | 1,705.5 | 1,616.3 | +89.2 | | Total assets | 8,449.5 | 8,394.6 | +54.9 | | Total current liabilities | 517.2 | 525.2 | -8.0 | | Long-term debt | 3,937.8 | 3,981.1 | -43.3 | | Shareholders' equity | 3,809.1 | 3,691.5 | +117.6 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 28, 2025, operating activities provided $253.9 million in cash, while investing activities used $174.9 million. Financing activities used $40.2 million, leading to an overall increase in cash and cash equivalents to $376.8 million | Metric | Jun 28, 2025 ($ millions) | Jun 29, 2024 ($ millions) | | :--------------------------------------- | :------------------------ | :------------------------ | | Net cash provided by operating activities | 253.9 | 258.4 | | Net cash (used in) provided by investing activities | (174.9) | 121.8 | | Net cash used in financing activities | (40.2) | (509.9) | | Increase (decrease) in cash and cash equivalents | 47.6 | (136.9) | | Cash and cash equivalents at end of period | 376.8 | 320.0 | [Segment Financial Performance](index=9&type=section&id=Segment%20Financial%20Performance) In Q2 2025, Materials Solutions (MS) saw sequential growth in net sales and segment profit. Advanced Purity Solutions (APS) also had sequential net sales growth but experienced a decrease in segment profit. For the six-month period, MS improved both sales and profit, while APS saw declines | Segment | Jun 28, 2025 (3M) ($ millions) | Jun 29, 2024 (3M) ($ millions) | Mar 29, 2025 (3M) ($ millions) | Jun 28, 2025 (6M) ($ millions) | Jun 29, 2024 (6M) ($ millions) | | :------------------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Materials Solutions | 354.9 | 342.3 | 341.4 | 696.3 | 692.3 | | Advanced Purity Solutions | 439.9 | 472.6 | 433.9 | 873.8 | 895.9 | | Total net sales | 792.4 | 812.7 | 773.2 | 1,565.6 | 1,583.7 | | Segment | Jun 28, 2025 (3M) ($ millions) | Jun 29, 2024 (3M) ($ millions) | Mar 29, 2025 (3M) ($ millions) | Jun 28, 2025 (6M) ($ millions) | Jun 29, 2024 (6M) ($ millions) | | :------------------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Materials Solutions | 72.5 | 70.3 | 75.0 | 147.5 | 137.4 | | Advanced Purity Solutions | 95.9 | 122.6 | 108.1 | 204.0 | 233.8 | | Total segment profit | 168.4 | 192.9 | 183.1 | 351.5 | 371.2 | [Non-GAAP Financial Measures & Reconciliations](index=2&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section provides detailed reconciliations of Entegris' GAAP financial results to non-GAAP measures, offering insights into adjusted performance metrics [Non-GAAP Information Disclosure](index=2&type=section&id=Non-GAAP%20Information%20Disclosure) Entegris provides supplemental non-GAAP financial measures to offer investors and analysts additional insights into the company's ongoing results and baseline performance, excluding certain non-recurring items. These measures are also utilized by management for business understanding, performance evaluation, and operational decision-making - Non-GAAP financial measures are provided to offer additional and meaningful information for assessing ongoing results and understanding baseline performance before certain non-indicative charges[11](index=11&type=chunk) - Management uses non-GAAP measures to understand and manage the business, evaluate segment performance, and make operating decisions[11](index=11&type=chunk) [Reconciliation of GAAP Gross Profit to Adjusted Gross Profit](index=10&type=section&id=Reconciliation%20of%20GAAP%20Gross%20Profit%20to%20Adjusted%20Gross%20Profit) This section reconciles GAAP gross profit to adjusted gross profit, primarily by adding back restructuring costs, to provide a clearer view of the company's core gross margin performance | Metric | Jun 28, 2025 | Jun 29, 2024 | Mar 29, 2025 | | :-------------------------------- | :----------- | :----------- | :----------- | | Gross profit-GAAP | $351.5 | $375.8 | $356.5 | | Restructuring costs | 2.1 | — | 0.2 | | Adjusted gross profit | $353.6 | $375.8 | $356.7 | | Gross margin - as a % of net sales | 44.4 % | 46.2 % | 46.1 % | | Adjusted gross margin - as a % of net sales | 44.6 % | 46.2 % | 46.1 % | [Reconciliation of GAAP Segment Profit to Adjusted Operating Income](index=11&type=section&id=Reconciliation%20of%20GAAP%20Segment%20Profit%20to%20Adjusted%20Operating%20Income) This reconciliation adjusts GAAP segment profit for items such as restructuring costs, loss/gain on sale of business, and impairment of long-lived assets, to arrive at adjusted operating income for each segment and the total company | Metric | Jun 28, 2025 ($ millions) | Jun 29, 2024 ($ millions) | Mar 29, 2025 ($ millions) | | :------------------------------------ | :------------------------ | :------------------------ | :------------------------ | | MS segment profit | 72.5 | 70.3 | 75.0 | | APS segment profit | 95.9 | 122.6 | 108.1 | | Total segment profit | 168.4 | 192.9 | 183.1 | | Total adjusted operating income | 165.4 | 178.9 | 170.8 | [Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20GAAP%20Net%20Income%20to%20Adjusted%20Operating%20Income%20and%20Adjusted%20EBITDA) This section provides a detailed reconciliation from GAAP net income to adjusted operating income and Adjusted EBITDA, incorporating adjustments for non-operating items, integration costs, restructuring, and amortization of intangible assets | Metric | Jun 28, 2025 | Jun 29, 2024 | Mar 29, 2025 | | :------------------------------------ | :----------- | :----------- | :----------- | | Net income (GAAP) | $52.8 | $67.7 | $62.9 | | GAAP - Operating income | 106.1 | 130.1 | 122.3 | | Adjusted operating income | 165.4 | 178.9 | 170.8 | | Adjusted operating margin - as a % of net sales | 20.9 % | 22.0 % | 22.1 % | | Adjusted EBITDA | $216.7 | $226.3 | $220.7 | | Adjusted EBITDA - as a % of net sales | 27.3 % | 27.8 % | 28.5 % | [Reconciliation of GAAP Net Income and Diluted EPS to Non-GAAP Net Income and Diluted Non-GAAP EPS](index=13&type=section&id=Reconciliation%20of%20GAAP%20Net%20Income%20and%20Diluted%20EPS%20to%20Non-GAAP%20Net%20Income%20and%20Diluted%20Non-GAAP%20EPS) This reconciliation details the adjustments made to GAAP net income and diluted earnings per common share to arrive at their non-GAAP counterparts, including integration costs, restructuring, and amortization of intangible assets, along with their tax effects | Metric | Jun 28, 2025 | Jun 29, 2024 | Mar 29, 2025 | | :------------------------------------ | :----------- | :----------- | :----------- | | GAAP net income | $52.8 | $67.7 | $62.9 | | Non-GAAP net income | $100.6 | $107.1 | $101.5 | | Diluted earnings per common share (GAAP) | $0.35 | $0.45 | $0.41 | | Diluted non-GAAP earnings per common share | $0.66 | $0.71 | $0.67 | [Reconciliation of Reported Net Sales to Adjusted Net Sales (excluding divestiture)](index=14&type=section&id=Reconciliation%20of%20Reported%20Net%20Sales%20to%20Adjusted%20Net%20Sales%20%28excluding%20divestiture%29) This section reconciles reported net sales to adjusted net sales by excluding the impact of divestitures, specifically the PIM business divested in Q1 2024, to provide a comparable view of ongoing sales performance | Metric | Jun 28, 2025 (3M) ($ millions) | Jun 29, 2024 (3M) ($ millions) | Mar 29, 2025 (3M) ($ millions) | Jun 28, 2025 (6M) ($ millions) | Jun 29, 2024 (6M) ($ millions) | | :------------------------------------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net sales | 792.4 | 812.7 | 773.2 | 1,565.6 | 1,583.7 | | Less: divestiture | — | — | — | — | (33.9) | | Adjusted net sales (excluding divestiture) | 792.4 | 812.7 | 773.2 | 1,565.6 | 1,549.8 | [Reconciliation of GAAP Outlook to Non-GAAP Outlook](index=15&type=section&id=Reconciliation%20of%20GAAP%20Outlook%20to%20Non-GAAP%20Outlook) This section provides a reconciliation of Entegris' third-quarter GAAP financial outlook to its non-GAAP outlook, detailing adjustments for operating income, net income, and diluted EPS to offer a comprehensive view of expected performance | Metric | GAAP Outlook (Sep 27, 2025) | Non-GAAP Outlook (Sep 27, 2025) | | :------------------------------------ | :---------------------------- | :------------------------------ | | Net sales | $780 - $820 | $780 - $820 | | Operating income | $113 - $135 | $159 - $181 (Adjusted) | | Operating margin - as a % of net sales | 14.5% - 16.4% | 20.4% - 22.1% (Adjusted) | | Adjusted EBITDA - as a % of net sales | N/A | ~27.5% | | Net income | $65 - $76 | $104 - $115 | | Diluted earnings per common share | $0.43 - $0.50 | $0.68 - $0.75 | [Additional Information](index=2&type=section&id=Additional%20Information) This section provides details on the second-quarter results conference call and important cautionary notes regarding forward-looking statements [Second-Quarter Results Conference Call](index=2&type=section&id=Second-Quarter%20Results%20Conference%20Call) Entegris announced details for its conference call to discuss Q2 2025 results, including dial-in information and access to the live webcast, replay, and management's presentation - A conference call to discuss Q2 2025 results was scheduled for Wednesday, July 30, 2025, at **9:00 a.m. Eastern Time**[8](index=8&type=chunk) - Participants can dial **800-579-2543** or **+1 785-424-1789**, referencing confirmation ID: ENTGQ225, and access the live webcast and replay online[8](index=8&type=chunk) - Management's slide presentation concerning the results will be posted on the Investor Relations section of www.entegris.com[9](index=9&type=chunk) [Cautionary Note on Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20on%20Forward-Looking%20Statements) This section serves as a disclaimer, indicating that the news release contains forward-looking statements based on current expectations, which are subject to substantial risks and uncertainties that could cause actual results to differ materially. Entegris explicitly states it undertakes no obligation to update these statements - The news release contains forward-looking statements based on current management expectations, which are not guarantees of future performance and involve substantial risks and uncertainties[13](index=13&type=chunk) - Key risks include fluctuations in semiconductor demand, global economic uncertainty, raw material shortages, supply chain interruptions, geopolitical instability, export controls, and the ability to innovate and integrate acquisitions[13](index=13&type=chunk) - Entegris undertakes no obligation to update publicly any forward-looking statements or information contained herein[13](index=13&type=chunk)

Core Viewpoint - Entegris (ENTG) is anticipated to report a year-over-year decline in earnings and revenues for the quarter ended June 2025, which could significantly influence its stock price depending on the actual results compared to estimates [1][3]. Earnings Expectations - The consensus estimate for Entegris' quarterly earnings is $0.65 per share, reflecting an 8.5% decrease year-over-year. Revenues are projected to be $766.77 million, down 5.7% from the same quarter last year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised 1.82% higher, indicating a collective reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Entegris is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.25%, indicating a bearish outlook from analysts [12]. Historical Performance - In the last reported quarter, Entegris was expected to post earnings of $0.69 per share but delivered $0.67, resulting in a surprise of -2.90%. Over the past four quarters, the company has beaten consensus EPS estimates twice [13][14]. Investment Considerations - Entegris does not appear to be a strong candidate for an earnings beat, and investors should consider other factors when deciding to invest in the stock ahead of its earnings release [17].

Core Insights - The global semiconductor filter market is essential for maintaining the purity and integrity of gases and liquids in semiconductor manufacturing processes, with increasing complexity driving demand for high-performance filtration solutions [2][3] - The market is currently in a growth phase, fueled by advancements in technologies such as 5G, AI, and IoT, leading to a rising demand for high-performance semiconductor devices [4] - The market is projected to grow from an estimated value of $1.98 billion in 2025 to $3.89 billion by 2034, with a compound annual growth rate (CAGR) of 7.7% [8] Market Dynamics - Key drivers include the increasing demand for high-performance semiconductors and innovations in manufacturing processes that necessitate advanced filtration solutions [9][13] - Limitations include high initial investment costs and the complexity of filtration systems, which pose challenges for maintenance and operation [13] Market Segmentation - Application-wise, semiconductor foundry manufacturing is a prominent segment within the global semiconductor filter market [9] - Product-wise, the market is estimated to be led by photo filters [10] - Regionally, North America is expected to gain traction in production due to the presence of key manufacturers [11] Competitive Landscape - The market is characterized by a concentrated competitive landscape, with key players like Entegris and Pall Corporation holding approximately 28% and 35% of the semiconductor liquid filter market, respectively [6][7] - Continuous innovation and strategic investments in research and development are crucial for maintaining competitive advantages among these companies [7]

Core Insights - The article compares Ultra Clean Holdings (UCTT) and Entegris (ENTG) to determine which stock offers better value for investors [1][3]. Valuation Metrics - UCTT has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while ENTG has a Zacks Rank of 5 (Strong Sell) [3]. - UCTT's forward P/E ratio is 22.85, compared to ENTG's 28.64, suggesting UCTT is more attractively priced [5]. - UCTT has a PEG ratio of 0.65, indicating better value relative to its expected earnings growth, while ENTG's PEG ratio is 1.87 [5]. - UCTT's P/B ratio is 1.09, significantly lower than ENTG's P/B ratio of 3.38, further highlighting UCTT's relative undervaluation [6]. - Based on these metrics, UCTT holds a Value grade of B, while ENTG has a Value grade of F, making UCTT the preferred choice for value investors [6].

Core Viewpoint - The Philadelphia Semiconductor Index (SOX) increased by over 3% on June 16, indicating a positive trend in the semiconductor sector [1]. Market Performance - The SOX index reached a value of 5265.73, reflecting an increase of 153.49 points or 3.00% during trading on June 16 [1]. - The index opened at 5178.41 and recorded a high of 5265.83 and a low of 5178.35, with a trading volume of 127 million shares [1]. - The previous closing price was 5112.24, showing a significant upward movement [1]. Key Stocks Performance - Notable performers within the index included: - AMD (Advanced Micro Devices) with a price of 125.585, up by 8.11% [1]. - Coherent (COHR) at 81.895, increasing by 5.85% [1]. - Monolithic Power (MPWR) at 708.950, rising by 5.34% [1]. - Marvell Technology (MRVL) at 70.750, up by 5.30% [1]. - ON Semiconductor (ON) at 53.625, increasing by 5.11% [1]. - Arm Holdings (ARM) at 142.450, up by 5.09% [1]. - Entegris (ENTG) at 78.800, rising by 4.59% [1]. - Lam Research (LRCX) at 93.230, increasing by 4.14% [1]. - Teradyne (TER) at 86.445, up by 4.05% [1].

Financial Data and Key Metrics Changes - The company has been outperforming the semiconductor industry by about four to five percentage points over the last ten years in terms of revenue growth [7][28] - Average ASPs in the semiconductor industry are currently 50% higher than they were in 2019, while the company's pricing has remained flat over the last several years [15][16] Business Line Data and Key Metrics Changes - The company operates two major product platforms: advanced purity solutions and material solutions, both expected to grow at rates of three to six points and four to six points respectively [41][42] - Advanced purity solutions have an operating margin potential in the high twenties, while material solutions are currently in the mid-twenties, with potential to reach the mid-twenties in the future [42][43] Market Data and Key Metrics Changes - China accounts for about 20% of the company's revenue, with 80% of that coming from domestic Chinese customers [48] - The company has seen significant growth from TSMC, with its share increasing from 12% to 16% of total revenue last year [68] Company Strategy and Development Direction - The company aims to be a consolidator in the fragmented semiconductor materials space, with M&A being a significant part of its growth strategy [11][12] - The focus is on increasing content per wafer through new materials and applications, which is expected to drive future growth [18][28] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the cyclical nature of the semiconductor industry but believes the company's business model is more resilient due to its consumable product nature [10][29] - The management is optimistic about future growth opportunities driven by the complexity of semiconductor devices and the desire for miniaturization [7][28] Other Important Information - The company has a global manufacturing footprint, with 45% of its manufacturing in the U.S. and 55% in Asia, ensuring redundancy and local support for customers [45][58] - The company is actively working to mitigate the impact of tariffs by qualifying alternative Asian manufacturing sites for its Chinese customers [56][57] Q&A Session Summary Question: How is the content per wafer growing? - The growth in content per wafer is driven by new materials that are better performing and more expensive, as well as increased volumes and layers [16][18] Question: What is the forward growth formula? - The company believes the semiconductor industry's secular growth potential is twice the rate of GDP, plus an additional three to six points of outperformance [25][28] Question: What impact are tariffs having on the company? - The company has been able to offset tariff impacts through price increases and is working to qualify alternative manufacturing sites in Asia for its Chinese customers [50][56] Question: What is the state of the industry? - The management notes that the industry is difficult to predict, but they are focused on customer engagement and developing specialized solutions to be ready for when the industry turns [62][65] Question: Why is the CEO stepping down now? - The CEO believes in refreshing leadership and has confidence in his successor, who has extensive experience in the semiconductor industry and is a capable capital allocator [95][96]

Core Insights - Entegris reported revenue of $773.2 million for the quarter ended March 2025, reflecting a year-over-year increase of 0.3% and an EPS of $0.67, slightly down from $0.68 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $788.96 million, resulting in a surprise of -2.00%, while the EPS also missed the consensus estimate of $0.69 by -2.90% [1] Financial Performance Metrics - Net Sales for Materials Solutions (MS) reached $341.40 million, exceeding the average estimate of $333.60 million [4] - Net Sales for Advanced Purity Solutions (APS) were $433.90 million, below the average estimate of $457.50 million [4] - Adjusted Segment Profit for Materials Solutions (MS) was $75.10 million, surpassing the average estimate of $68.65 million [4] - Adjusted Segment Profit for Advanced Purity Solutions (APS) was $110.40 million, falling short of the average estimate of $117.55 million [4] Stock Performance - Entegris shares have returned +32% over the past month, significantly outperforming the Zacks S&P 500 composite's +10.6% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company's first quarter revenue grew by 5% year on year, excluding divestitures, slightly below guidance [4] - Gross margin was at 46.1%, at the midpoint of guidance and up sequentially due to strong cost management [12][13] - Non-GAAP EPS was $0.67 per share, at the midpoint of guidance [14] Business Line Data and Key Metrics Changes - Materials Solutions sales increased by 8% year on year, driven by strong growth in CMP slurries and pads, which were up almost 20% [4][14] - Advanced Purity Solutions sales rose by 3% year on year, but saw an 11% sequential decline due to lower demand for CapEx products [5][15] Market Data and Key Metrics Changes - The company expects a temporary impact on top-line revenue related to sales to China due to new tariffs, estimating a potential loss of up to $50 million for Q2 [10][31] - Excluding China, the business remains strong, with expectations for sequential growth in consumable product lines [29][30] Company Strategy and Development Direction - The company is focused on building a comprehensive global manufacturing footprint with regionally integrated supply chains to mitigate risks [7] - Investments in new manufacturing sites, such as the Colorado facility, are aimed at enhancing production capabilities and supporting customer technology roadmaps [6][18] Management's Comments on Operating Environment and Future Outlook - The management highlighted the uncertainty in the semiconductor industry due to new tariff regimes, affecting revenue guidance for Q2 [10][20] - Despite the challenges, the company remains committed to improving free cash flow and reducing debt levels [11][19] Other Important Information - The company achieved its first CHIPS Act milestone and expects to receive $9 million in the second quarter [18] - Capital expenditures for 2025 are expected to be approximately $300 million, down from previous expectations [17] Q&A Session Summary Question: Impact of tariffs on guidance and customer behavior - Management clarified that the Q2 guidance reflects strong business performance excluding China, with a solid book-to-bill ratio approaching 1.2 [28] - The potential $50 million loss in Q2 is due to new tariffs, but alternative manufacturing sites are being qualified to mitigate this impact [31][32] Question: Changes in customer discussions regarding Moly adoption - Despite macro uncertainties, major node transitions are still on track, with expectations for Moly adoption in the second half of the year [35][36] Question: Recovery of lost sales due to tariffs - Management believes the impact is temporary and that the China business remains strong, with active discussions ongoing to transition demand to alternative sites [41][44] Question: Q1 results and customer behavior - The Q1 performance was slightly below guidance due to softer demand for CapEx products, particularly in new fab construction [46][48] Question: Gross margin impact from tariffs - Management indicated that while tariffs may have a modest impact on Q2 gross margins, they expect overall gross margins to improve in 2025 compared to 2024 [56] Question: Advanced Packaging growth outlook - Advanced packaging is a small but rapidly growing market, with expectations for over 25% growth in 2025 driven by high viscosity dispense solutions and HBM slurries [97][98]

Financial Performance - Entegris reported quarterly earnings of $0.67 per share, missing the Zacks Consensus Estimate of $0.69 per share, and showing a slight decrease from $0.68 per share a year ago, resulting in an earnings surprise of -2.90% [1] - The company posted revenues of $773.2 million for the quarter ended March 2025, which was 2% below the Zacks Consensus Estimate and slightly above the year-ago revenues of $771.03 million [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.70 on revenues of $814.77 million, and for the current fiscal year, it is $3.25 on revenues of $3.41 billion [7] - The trend of estimate revisions for Entegris has been unfavorable, leading to a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Market Performance - Entegris shares have declined approximately 16.2% since the beginning of the year, contrasting with the S&P 500's decline of -4.7% [3] - The Electronics - Manufacturing Machinery industry, to which Entegris belongs, is currently ranked in the bottom 6% of over 250 Zacks industries, suggesting a challenging environment for the company [8]