Part I. Financial Information [Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(Unaudited)) For Q1 2025, MKS Instruments reported $936 million in net revenues, an 8% year-over-year increase, and net income of $52 million, significantly up from $15 million in the prior year, with total assets slightly decreasing to $8.56 billion and operating cash flow increasing to $141 million [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $8.56 billion, a slight decrease from $8.59 billion at year-end 2024, primarily due to reduced cash and cash equivalents, while total liabilities decreased and stockholders' equity increased Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $655 | $714 | | Total current assets | $2,426 | $2,474 | | Goodwill | $2,496 | $2,479 | | Intangible assets, net | $2,238 | $2,272 | | **Total assets** | **$8,556** | **$8,590** | | **Liabilities & Equity** | | | | Total current liabilities | $781 | $775 | | Long-term debt, net | $4,409 | $4,488 | | **Total liabilities** | **$6,202** | **$6,268** | | **Total stockholders' equity** | **$2,354** | **$2,322** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) For the three months ended March 31, 2025, net revenues increased to $936 million from $868 million, with gross profit rising to $444 million from $415 million, and net income substantially improving to $52 million, or $0.77 per diluted share, driven by higher revenues and lower interest expense Q1 2025 vs. Q1 2024 Statement of Operations (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total net revenues | $936 | $868 | | Gross profit | $444 | $415 | | Income from operations | $111 | $106 | | Interest expense | $53 | $87 | | **Net income** | **$52** | **$15** | | **Diluted EPS** | **$0.77** | **$0.22** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash provided by operating activities more than doubled to $141 million, while net cash used in financing activities was $180 million, primarily due to debt repayments and common stock repurchases, resulting in a $59 million decrease in cash and cash equivalents Q1 2025 vs. Q1 2024 Cash Flow Summary (in millions) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $141 | $67 | | Net cash used in investing activities | ($18) | ($18) | | Net cash used in financing activities | ($180) | ($72) | | **Decrease in cash and cash equivalents** | **($59)** | **($30)** | [Notes to Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail revenue disaggregation, debt structure, and segment performance, with Semiconductor market revenue growing 18% year-over-year to $413 million, total debt comprising a $3.2 billion Term Loan Facility and $1.4 billion in Convertible Notes, and a Q1 2025 restructuring initiative incurring $16 million in severance costs Revenue by End Market (in millions) | End Market | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Semiconductor | $413 | $351 | | Electronics and Packaging | $253 | $208 | | Specialty Industrial | $270 | $309 | | **Total net revenues** | **$936** | **$868** | Debt Outstanding (in millions) | Debt Instrument | March 31, 2025 (Net) | December 31, 2024 (Net) | | :--- | :--- | :--- | | Term Loan Facility, net | $3,034 | $3,114 | | Convertible Notes, net | $1,375 | $1,374 | | **Total long-term debt, net** | **$4,409** | **$4,488** | - The company recorded restructuring charges of **$16 million** in Q1 2025 related to severance costs from a cost-saving initiative, primarily in the general metal finishing business within the MSD segment[103](index=103&type=chunk) [Management's Discussion and Analysis (MD&A)](index=33&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management attributes the 8% year-over-year revenue growth to strength in the Semiconductor and Electronics & Packaging markets, offsetting a decline in the Specialty Industrial market, while maintaining a relatively stable gross margin of 47.4% and continuing deleveraging efforts through debt prepayments and refinancing [Market and Segment Performance](index=35&type=section&id=Market%20and%20Segment%20Performance) In Q1 2025, Semiconductor market revenue grew 18% year-over-year to $413 million, Electronics and Packaging increased 22% to $253 million, while Specialty Industrial declined 13% to $270 million, with segment revenues showing VSD up 16%, PSD up 4%, and MSD up 2% year-over-year Net Revenues by End Market - YoY Change (in millions) | End Market | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Semiconductor | $413 | $351 | 18% | | Electronics and Packaging | $253 | $208 | 22% | | Specialty Industrial | $270 | $309 | (13)% | Net Revenues by Reportable Segment - YoY Change (in millions) | Segment | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Vacuum Solutions Division (VSD) | $386 | $332 | 16% | | Photonics Solutions Division (PSD) | $263 | $254 | 4% | | Materials Solutions Division (MSD) | $287 | $282 | 2% | [Results of Operations Analysis](index=39&type=section&id=Results%20of%20Operations%20Analysis) Total gross margin for Q1 2025 slightly decreased to 47.4% due to higher inventory charges and freight costs, while R&D expenses remained flat at $70 million, SG&A expenses increased by $15 million primarily from compensation costs, and net interest expense significantly decreased by $31 million due to debt repayments and refinancing - VSD gross margin increased to **45.3%** from 43.5% year-over-year due to higher volumes and operational efficiencies[145](index=145&type=chunk) - PSD margin decreased to **44.0%** from 46.4% year-over-year due to unfavorable product mix and higher costs[146](index=146&type=chunk) - MSD margin decreased to **54.5%** from 55.6% year-over-year due to higher inventory charges and unfavorable mix[147](index=147&type=chunk) - SG&A expenses increased by **$15 million** year-over-year, primarily due to a **$13 million** increase in compensation-related costs, mainly from stock and other variable incentive compensation[154](index=154&type=chunk) - Net interest expense decreased by **$31 million** year-over-year, mainly due to the May 2024 issuance of **$1.4 billion** of 1.25% Convertible Notes used to repay higher-rate term loans, and subsequent amendments that lowered loan margins[160](index=160&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q1 2025 with $655 million in cash and cash equivalents, having made a $100 million voluntary debt prepayment, $45 million in share repurchases, and $15 million in dividend payments, while also refinancing its Term Loan Facility to reduce interest rates, with total principal debt outstanding at approximately $4.6 billion - Generated **$141 million** in cash from operations in Q1 2025[170](index=170&type=chunk) - Financing activities in Q1 2025 included **$113 million** in debt payments (including a **$100 million** voluntary prepayment), **$45 million** in share repurchases, and **$15 million** in dividends[171](index=171&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) - In January 2025, the company entered into the Fifth Amendment to its Credit Agreement, which refinanced its term loans and decreased the applicable interest margin for the USD Tranche B to **2.00%** (Term SOFR) and the Euro Tranche B to **2.50%**[55](index=55&type=chunk)[175](index=175&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company states that as of March 31, 2025, there were no material changes in its exposure to market risk from the levels disclosed at year-end December 31, 2024 - There were no material changes in the company's exposure to market risk from December 31, 2024 to March 31, 2025[204](index=204&type=chunk) [Controls and Procedures](index=39&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[205](index=205&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[206](index=206&type=chunk) Part II. Other Information [Risk Factors](index=40&type=section&id=ITEM%201A.%20RISK%20FACTORS) A new significant risk factor was disclosed regarding tariffs and trade restrictions, including a 145% U.S. tariff on Chinese imports and a 125% retaliatory tariff from China, expanded U.S. export controls (BIS Rules) impacting semiconductor-related products, and China's export curbs on critical raw materials, all of which could disrupt supply chains, increase costs, and adversely affect business results - In April 2025, the U.S. government imposed a **145%** tariff on Chinese imports, and China responded with a **125%** tariff on U.S. goods, creating significant risk[209](index=209&type=chunk) - The U.S. Department of Commerce's BIS Rules have resulted in an estimated annual loss in net revenues of approximately **$200 million to $250 million**, mostly realized in 2023, due to restrictions on sales to China[211](index=211&type=chunk) - China has implemented export curbs on critical materials, including a new ban in April 2025 on certain rare earth minerals like yttrium, a critical component for the company's lasers, which is expected to create sourcing challenges and higher costs[214](index=214&type=chunk) [Use of Proceeds and Issuer Purchases of Equity Securities](index=41&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) During the three months ended March 31, 2025, the company repurchased 546,142 shares of its common stock for a total of $45 million under its publicly announced program, with approximately $28 million remaining for future purchases as of the end of the quarter Share Repurchases in Q1 2025 | Period | Total Shares Purchased | Average Price Paid per Share | Total Cost (in millions) | | :--- | :--- | :--- | :--- | | Jan 2025 | — | — | — | | Feb 2025 | — | — | — | | Mar 2025 | 546,142 | $82.81 | ~$45 | | **Total Q1** | **546,142** | **$82.81** | **$45** | - As of March 31, 2025, approximately **$28 million** remained available for repurchase under the company's share repurchase program[218](index=218&type=chunk) [Other Information](index=42&type=section&id=ITEM%205.%20OTHER%20INFORMATION) During the first quarter of 2025, three company executives and directors adopted Rule 10b5-1 trading arrangements for the potential sale of company securities - Three insiders adopted Rule 10b5-1 trading plans in Q1 2025: Elizabeth A. Mora (Director), David P. Henry (EVP), and James A. Schreiner (EVP & COO)[219](index=219&type=chunk)

MKS Instruments (MKSI) reported first-quarter 2025 adjusted earnings of $1.71 per share, which beat the Zacks Consensus Estimate by 20.42% and jumped 45% year over year.Revenues of $936 million beat the consensus mark by 0.27% and increased 7.8% year over year.Products’ revenues (87.5% of total revenues) were $819 million, increased by 8.6% year over year. The figure beat the Zacks Consensus Estimate by 2.60%.Services revenues (12.5% of total revenues) increased 2.6% year over year to $117 million. The figu ...

Core Viewpoint - MKS Instruments, Inc. reported its financial results for Q1 2025, highlighting key performance metrics and future expectations [3]. Financial Results - The financial results for Q1 2025 were released after market close on the previous day and are available on the company's investor website [3]. Conference Call Details - The earnings conference call included participants from various financial institutions, indicating strong interest from analysts and investors [1][2]. - The call was led by Paretosh Misra, along with John Lee (President and CEO) and Ram Mayampurath (EVP, CFO and Treasurer) [3].

Financial Data and Key Metrics Changes - First quarter revenue was $936 million, up 8% year over year and at the high end of guidance [14][7] - Gross margin for the first quarter was 47.4%, also at the high end of guidance [18] - Net earnings per diluted share were $1.71, exceeding the high end of guidance [20] - Free cash flow for the first quarter was strong at $123 million, over 100% of net earnings [20] Business Line Data and Key Metrics Changes - Semiconductor revenue was $413 million, up 3% sequentially and 18% year over year [16] - Electronics and packaging revenue was $253 million, similar to the previous quarter and up 22% year over year [17] - Specialty industrial revenue was $270 million, down 4% sequentially and down 13% year over year [18] Market Data and Key Metrics Changes - Semiconductor market showed modest increases in demand, particularly for NAND products [9] - Electronics and packaging market saw strong orders for flexible PCB drilling equipment and chemistry equipment [10] - Specialty industrial market faced softness, particularly in automotive applications [12] Company Strategy and Development Direction - Company is focused on managing through uncertainties related to trade policies while capitalizing on market recovery [13] - Emphasis on maintaining strong customer relationships and leveraging a broad portfolio of technologies [13] - Long-term capital allocation priorities include investing in organic growth and reducing leverage [22] Management's Comments on Operating Environment and Future Outlook - Management noted early signs of improvement in demand across end markets despite trade policy uncertainties [7] - Anticipated near-term impacts on margins due to supply chain optimization in response to geopolitical dynamics [8] - Confidence in the ability to manage through uncertainties and maintain strong financial performance [13] Other Important Information - Company closed the quarter with approximately $1.3 billion in liquidity [21] - Voluntary principal prepayment of $100 million was made to reduce credit spreads [21] - Dividend of $0.22 per share was paid during the quarter [22] Q&A Session Summary Question: Momentum in NAND upgrades - Management indicated that inventory normalization in the NAND market is a factor driving upgrades, with expectations for continued upgrades [28][29] Question: Impact of tariffs on gross margins - Management discussed ongoing engagement with customers and suppliers to mitigate tariff impacts, noting no current top-line impact from tariffs [38][39] Question: Outlook for the second half of the year - Management expressed optimism for stable demand and potential growth in semiconductor and electronics markets, but acknowledged macroeconomic uncertainties [42] Question: Specialty industrial market trends - Management highlighted softness in automotive and general industrial markets, attributing it to macroeconomic factors and tariffs [88] Question: Growth rate expectations for chemistry business - Management expects the PCB industry to grow at GDP plus 300 basis points, with AI driving incremental growth [92]

Financial Data and Key Metrics Changes - First quarter revenue was $936 million, up 8% year over year and at the high end of guidance [13][6] - Gross margin for the first quarter was 47.4%, also at the high end of guidance [17] - Net earnings per diluted share were $1.71, exceeding the high end of guidance [19] - Free cash flow for the first quarter was strong at $123 million, over 100% of net earnings [19] Business Line Data and Key Metrics Changes - Semiconductor revenue was $413 million, up 3% sequentially and 18% year over year [14] - Electronics and packaging revenue was $253 million, similar to the previous quarter and up 22% year over year [15] - Specialty industrial revenue was $270 million, down 4% sequentially and 13% year over year [17] Market Data and Key Metrics Changes - Semiconductor market showed modest increases in demand, particularly for NAND products [8] - Electronics and packaging market saw increased sales driven by flexible PCB drilling equipment and chemistry equipment [9] - Specialty industrial market faced softness, particularly in automotive applications [11] Company Strategy and Development Direction - Company is focused on managing through uncertainties related to trade policies while capitalizing on market recovery [12] - Emphasis on maintaining strong customer relationships and leveraging a broad portfolio of technologies [12] - Continued investment in organic growth opportunities and debt reduction strategies [21] Management's Comments on Operating Environment and Future Outlook - Management noted early signs of improvement in demand across end markets despite trade policy uncertainties [6] - Anticipated near-term impact on margins due to supply chain optimization in response to geopolitical changes [7] - Confidence in the ability to outperform as market recovery gains momentum [9] Other Important Information - Company closed the quarter with approximately $1.3 billion in liquidity [20] - Plans for a voluntary prepayment on term loans in the current quarter [20] - Dividend of $0.22 per share was paid during the quarter [21] Q&A Session Summary Question: System upgrades for memory tools - Management indicated that inventory burn for the NAND market has normalized, leading to increased upgrades [27][28] Question: Impact of tariffs on gross margins - Management stated that tariffs could impact gross margins by up to 100 basis points, but no top-line impact has been observed yet [36][38] Question: Outlook for the second half of the year - Management expressed optimism for stable demand and potential growth, but noted macroeconomic uncertainties due to tariffs [40][41] Question: Strength in NAND upgrades - Management clarified that upgrades are the primary driver of strength in the NAND market, with inventory normalization contributing positively [45][46] Question: Specialty industrial market trends - Management highlighted that the automotive sector remains muted, with uncertainty due to tariffs affecting customer behavior [90][91] Question: Growth rate expectations for chemistry business - Management indicated that the PCB industry is expected to grow at GDP plus 300 basis points, with AI driving incremental growth [93][94]

First Quarter 2025 Financial Results MKS Instruments, Inc. May 8, 2025 Safe Harbor for Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding the future financial performance, business prospects and growth of MKS Instruments, Inc. ("MKS," the "Company," "our," or "we"). These statements are only pred ...

Core Viewpoint - MKS Instruments reported strong financial results for the quarter ended March 2025, with revenue and EPS exceeding both year-over-year figures and Wall Street expectations [1][3]. Financial Performance - Revenue for the quarter was $936 million, reflecting a year-over-year increase of 7.8% and a surprise of +0.27% over the Zacks Consensus Estimate of $933.5 million [1]. - EPS was reported at $1.71, compared to $1.18 in the same quarter last year, resulting in a surprise of +20.42% against the consensus estimate of $1.42 [1]. Segment Performance - Semiconductor segment revenues were $413 million, exceeding the average estimate of $403.45 million, with a year-over-year increase of 17.7% [4]. - Electronics and Packaging segment revenues reached $253 million, surpassing the average estimate of $242.64 million, marking a year-over-year growth of 21.6% [4]. - Specialty Industrial segment revenues were $270 million, slightly above the average estimate of $268.58 million, but showing a year-over-year decline of 12.6% [4]. - Total product revenues were $819 million, compared to the average estimate of $798.27 million, indicating an 8.6% year-over-year increase [4]. - Service revenues were $117 million, slightly below the average estimate of $118.75 million, with a year-over-year increase of 2.6% [4]. Stock Performance - MKS Instruments shares have returned +23.6% over the past month, outperforming the Zacks S&P 500 composite's +10.6% change [3]. - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3].

Group 1 - MKS Instruments reported quarterly earnings of $1.71 per share, exceeding the Zacks Consensus Estimate of $1.42 per share, and up from $1.18 per share a year ago, indicating a strong performance [1][2] - The company achieved revenues of $936 million for the quarter, surpassing the Zacks Consensus Estimate by 0.27% and showing an increase from $868 million year-over-year [3] - MKS Instruments has consistently outperformed consensus EPS and revenue estimates over the last four quarters, indicating a positive trend in financial performance [2][3] Group 2 - Despite the strong earnings report, MKS Instruments shares have declined approximately 30.4% since the beginning of the year, contrasting with the S&P 500's decline of 4.7%, suggesting underperformance in the market [4] - The current consensus EPS estimate for the upcoming quarter is $1.65, with expected revenues of $932.12 million, while the fiscal year estimate is $6.78 on $3.77 billion in revenues, indicating cautious future expectations [8] - The Electronics - Manufacturing Machinery industry, to which MKS Instruments belongs, is currently ranked in the bottom 6% of Zacks industries, which may negatively impact the stock's performance [9]

EXHIBIT 99.1 MKS Instruments Reports First Quarter 2025 Financial Results Andover, MA, May 7, 2025 -- MKS Instruments, Inc. (NASDAQ: MKSI), a global provider of enabling technologies that transform our world, today reported first quarter 2025 financial results. "We maintained our recent momentum in the first quarter with solid revenue performance that was at the high end of our guidance, led by strong year-over-year growth in both our Semiconductor and Electronics & Packaging end markets," said John T.C. Le ...

Core Insights - MKS Instruments, Inc. reported strong first quarter 2025 financial results, achieving revenue at the high end of guidance, driven by growth in Semiconductor and Electronics & Packaging markets [2][6][8] - The company is actively managing the impacts of new trade policies while maintaining confidence in its global manufacturing and supply chain capabilities [2][3] Financial Performance - Total net revenues for Q1 2025 were $936 million, compared to $935 million in Q4 2024 and $868 million in Q1 2024, reflecting a year-over-year increase of 7.8% [5][6] - GAAP net income was $52 million, with net income per diluted share at $0.77, both exceeding the midpoint of guidance [6][7] - Non-GAAP net earnings were $116 million, with non-GAAP net earnings per diluted share at $1.71, also above the high end of guidance [6][25] Margins and Guidance - GAAP gross margin was 47.4%, slightly up from 47.2% in Q4 2024, while operating margin was 11.9%, down from 14.5% in the previous quarter [5][6] - The company provided guidance for Q2 2025, anticipating stable demand and strong business fundamentals, while considering potential impacts from evolving trade policies [3][9] Cash Flow and Capital Management - As of March 31, 2025, MKS had $655 million in cash and cash equivalents, with total debt of $4.1 billion [7][20] - The company repurchased approximately 546,000 shares for about $45 million and paid a cash dividend of $15 million during the first quarter [7][24] Market Outlook - MKS Instruments is seeing pockets of demand improvement in its key markets, particularly in memory and foundry sectors, which are essential for supporting AI applications [2][3] - The company remains focused on managing profitability and cash generation to strengthen its balance sheet amid a dynamic market environment [3][6]