Financial Data and Key Metrics Changes - Second quarter revenue was $973 million, up 4% sequentially and up 10% year over year, exceeding guidance [13][14] - Net earnings per diluted share were $1.77, at the high end of guidance [18] - Gross margin was 46.6%, impacted by tariffs, with an estimated negative impact of 115 basis points [17][21] - Free cash flow was $136 million, representing over 100% of net earnings and 14% of revenue [19] Business Line Data and Key Metrics Changes - Semiconductor revenue was $432 million, up 5% sequentially and 17% year over year, driven by demand in vacuum solutions and normalization of customer inventories [14] - Electronics and packaging revenue was $266 million, up 5% sequentially and 16% year over year, driven by growth in chemistry and chemistry equipment [15] - Specialty industrial revenue was $275 million, up 2% sequentially but down 5% year over year, with modest improvements in life sciences and research [16][12] Market Data and Key Metrics Changes - Semiconductor market outlook indicates mid to high single-digit year-over-year growth for the upcoming quarter [9] - Electronics and packaging market is expected to see double-digit year-over-year growth in Q3, driven by AI-related applications [10] - Specialty industrial market is expected to be flattish in Q3, with defense showing growth [12] Company Strategy and Development Direction - Company focuses on expanding value-added services and maintaining a disciplined cost structure while investing in growth [8][19] - Emphasis on technology integration in advanced applications, particularly in AI and complex electronics [10][48] - Continued efforts to reduce leverage through principal prepayments and optimizing capital allocation [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a dynamic trade environment and mitigating tariff impacts [21][23] - Anticipated revenue for Q3 is $960 million, with semiconductor revenue expected to be around $405 million [20] - Management remains optimistic about long-term growth despite short-term volatility in NAND upgrade cycles [26] Other Important Information - Company received recognition as the best company to work for by US News and among America's best mid-sized companies by Time [13] - The effective tax rate for Q2 was 18.2%, consistent with guidance [18] Q&A Session Summary Question: Future semiconductor revenue trends - Management indicated that the semiconductor portfolio is growing year over year, with NAND upgrades being lumpy but beneficial in the long term [26][27] Question: PCB business outlook - Management noted that Q2 strength was driven by AI, with expectations for continued growth in Q3 [29][30] Question: Chemistry equipment orders sustainability - Management confirmed high utilization rates among substrate manufacturers, indicating a positive trend for chemistry equipment orders driven by AI [34][35] Question: Tariff impacts on guidance - Management stated that while tariffs had a significant impact in Q2, they expect less impact in Q3 due to mitigation strategies [21][79] Question: Specialty industrial business indicators - Management highlighted growth in defense and stability in life sciences, despite muted industrial performance [93]

Q2 2025 Financial Performance - Revenue reached $973 million[10], exceeding guidance due to increased demand in Semiconductor and Electronic & Packaging markets[11] - Non-GAAP net earnings per diluted share were $1.77[10], at the high end of guidance[11] - Adjusted EBITDA was $240 million[10] - Non-GAAP gross margin was 46.6%[10] Segment Performance - Semiconductor revenue was $432 million[12], a 17% year-over-year increase or 16% excluding FX impacts[12] - Electronics & Packaging revenue was $266 million[19], a 16% year-over-year increase excluding FX and Palladium impacts, or 14% year-over-year increase[19] - Specialty Industrial revenue was $275 million[26], a 5% year-over-year decrease excluding FX and Palladium impacts, or 6% year-over-year decrease[26] Q3 2025 Outlook - Revenue is projected to be $960 million, with a variance of plus or minus $40 million[40] - Semiconductor revenue is expected to be $405 million, with a variance of plus or minus $15 million[16, 43] - Electronics & Packaging revenue is expected to be $285 million, with a variance of plus or minus $10 million[23, 43] - Specialty Industrial revenue is expected to be $270 million, with a variance of plus or minus $15 million[30, 43]

Core Insights - MKS reported quarterly earnings of $1.77 per share, exceeding the Zacks Consensus Estimate of $1.61 per share, and up from $1.53 per share a year ago [1][2] - The company achieved revenues of $973 million for the quarter, surpassing the Zacks Consensus Estimate by 4.61% and increasing from $887 million year-over-year [3] Earnings Performance - The earnings surprise for the quarter was +9.94%, following a previous surprise of +20.42% when earnings were $1.71 per share against an expectation of $1.42 [2] - MKS has consistently surpassed consensus EPS estimates over the last four quarters [2] Revenue Performance - MKS has also exceeded consensus revenue estimates in each of the last four quarters [3] - The current consensus EPS estimate for the upcoming quarter is $1.52, with expected revenues of $926.3 million, and for the current fiscal year, the estimate is $6.64 on $3.74 billion in revenues [8] Market Position and Outlook - MKS shares have underperformed the market, losing about 11.9% since the beginning of the year, while the S&P 500 has gained 7.1% [4] - The Zacks Rank for MKS is currently 1 (Strong Buy), indicating expectations for the stock to outperform the market in the near future [7] Industry Context - The Electronics - Miscellaneous Products industry, to which MKS belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, suggesting potential challenges ahead [9] - Another company in the same industry, Universal Electronics, is expected to report earnings soon, with a projected EPS of $0.05, reflecting a year-over-year increase of +155.6% [10]

[Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) MKS Inc. reported strong second-quarter 2025 results, with revenue and adjusted EBITDA surpassing the high end of guidance, and GAAP net income and earnings per share above the midpoint, driven by significant year-over-year growth in Semiconductor and Electronics & Packaging markets Q2 2025 Key Financial Results (in millions, except per diluted share amounts) | Metric | Value | Guidance Comparison | | :--- | :--- | :--- | | Revenue | $973 | Above high end | | GAAP Net Income | $62 | Above midpoint | | GAAP Net Income per Diluted Share | $0.92 | Above midpoint | | Adjusted EBITDA | $240 | Above high end | | Non-GAAP Net Earnings per Diluted Share | $1.77 | At high end | - The strong performance was attributed to robust year-over-year growth in the Semiconductor and Electronics & Packaging end markets, fueled by demand for products related to advanced packaging and AI applications[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted exceptional execution, strong cash flow generation, and progress in deleveraging the balance sheet, successfully navigating trade policy instability while focusing on long-term value creation - CEO John T.C. Lee emphasized that results reflect growing demand for solutions in advanced packaging and AI-related applications[3](index=3&type=chunk) - CFO Ram Mayampurath noted the company's progress on deleveraging, with two separate voluntary principal prepayments of **$100 million** each on its term loan in June and August 2025[3](index=3&type=chunk)[7](index=7&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) The company's total net revenues for Q2 2025 reached **$973 million**, an increase from **$887 million** in Q2 2024, primarily driven by the Semiconductor and Electronics & Packaging segments, with GAAP net income substantially increasing to **$62 million** from **$23 million** [Revenue by End Market](index=2&type=section&id=Revenue%20by%20End%20Market) In Q2 2025, revenue from the Semiconductor market grew **17%** year-over-year to **$432 million**, and the Electronics & Packaging market grew **16%** to **$266 million**, while the Specialty Industrial market saw a slight decline of **5%** to **$275 million** Net Revenues by End Market (in millions) | End Market | Q2 2025 | Q1 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Semiconductor | $432 | $413 | $369 | +17.1% | | Electronics & Packaging | $266 | $253 | $229 | +16.2% | | Specialty Industrial | $275 | $270 | $289 | -4.8% | | **Total net revenues** | **$973** | **$936** | **$887** | **+9.7%** | [Key Financial Metrics (GAAP & Non-GAAP)](index=2&type=section&id=Key%20Financial%20Metrics%20%28GAAP%20%26%20Non-GAAP%29) GAAP net income for Q2 2025 was **$62 million**, or **$0.92** per diluted share, a significant improvement from **$23 million**, or **$0.33** per share, in Q2 2024, with Non-GAAP net earnings also increasing to **$119 million**, or **$1.77** per diluted share, compared to **$103 million**, or **$1.53** per share, in the prior-year period Q2 2025 vs. Q2 2024 Key Metrics (in millions, except percentages and per diluted share amounts) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **GAAP Measures** | | | | Gross Margin | 46.6% | 47.3% | | Operating Margin | 13.9% | 14.4% | | Net Income | $62 | $23 | | Net Income per Diluted Share | $0.92 | $0.33 | | **Non-GAAP Measures** | | | | Gross Margin | 46.6% | 47.3% | | Operating Margin | 20.8% | 21.7% | | Net Earnings | $119 | $103 | | Net Earnings per Diluted Share | $1.77 | $1.53 | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's operational results, financial position, and cash flows, showing net cash provided by operating activities of **$306 million** for the six months ended June 30, 2025, and total assets growing to **$8.83 billion** - The Statement of Operations shows a year-over-year increase in Q2 net revenues to **$973 million** and a significant rise in net income to **$62 million**[19](index=19&type=chunk) - The Balance Sheet as of June 30, 2025, indicates total assets of **$8.8 billion** and total liabilities of **$6.3 billion**[21](index=21&type=chunk) - The Statement of Cash Flows for the first six months of 2025 shows a strong net cash inflow from operating activities of **$306 million**, compared to **$189 million** in the prior year period[23](index=23&type=chunk) [Balance Sheet and Deleveraging](index=2&type=section&id=Balance%20Sheet%20and%20Deleveraging) As of June 30, 2025, MKS maintained a solid liquidity position with **$674 million** in cash and cash equivalents and **$675 million** of available borrowing capacity, actively deleveraging through two voluntary principal prepayments of **$100 million** each in June and August 2025 Key Balance Sheet Items (as of June 30, 2025, in millions) | Item | Amount | | :--- | :--- | | Cash and cash equivalents | $674 | | Secured term loan principal | $3,100 | | Convertible senior notes | $1,400 | | Additional borrowing capacity | up to $675 | - The company made a voluntary principal prepayment of **$100 million** in June 2025 and another **$100 million** in August 2025 on its USD term loan B, demonstrating a commitment to reducing its debt[7](index=7&type=chunk) [Third Quarter 2025 Outlook](index=2&type=section&id=Third%20Quarter%202025%20Outlook) MKS provided guidance for the third quarter of 2025, projecting revenues to be in the range of **$920 million** to **$1.0 billion**, with anticipated GAAP net income per diluted share of **$0.99** (±**$0.31**) and Non-GAAP net earnings per diluted share of **$1.80** (±**$0.29**) Q3 2025 Guidance (in millions, except per diluted share amounts and percentages) | Metric | Guidance Range | | :--- | :--- | | Revenue | $960 ± $40 | | Gross Margin | 46.5% ± 1.0% | | GAAP Net Income per Diluted Share | $0.99 ± $0.31 | | Non-GAAP Net Earnings per Diluted Share | $1.80 ± $0.29 | | Adjusted EBITDA | $232 ± $24 | - The guidance is based on the business environment as of the release date and includes impacts from U.S. import tariffs and retaliatory actions by other countries[9](index=9&type=chunk) [Supplemental Information](index=3&type=section&id=Supplemental%20Information) This section provides details for the upcoming investor conference call, explains the use of Non-GAAP financial measures, and includes the standard safe harbor statement for forward-looking information, along with detailed reconciliation tables between GAAP and Non-GAAP results - A conference call to discuss the results is scheduled for Thursday, August 7, 2025, at 8:30 a.m. (Eastern Time)[11](index=11&type=chunk) - The report includes Non-GAAP financial measures, which management believes are useful for investors in comparing periods and analyzing business trends, with detailed reconciliations to GAAP measures provided[13](index=13&type=chunk)[24](index=24&type=chunk) - The press release contains forward-looking statements regarding future performance and prospects, which are subject to various risks and uncertainties as detailed in the company's SEC filings[15](index=15&type=chunk)[16](index=16&type=chunk)

Core Insights - MKS Inc. reported strong financial results for Q2 2025, with revenues and adjusted EBITDA exceeding guidance, driven by growth in Semiconductor and Electronics & Packaging markets [2][6] - The company emphasized its focus on creating durable value for customers and shareholders while managing trade policy instability [2][4] - MKS made significant progress in deleveraging its balance sheet, with $200 million in voluntary principal prepayments on its term loan in June and August [4][6] Financial Performance - Total net revenues for Q2 2025 reached $973 million, a 9.7% increase from $887 million in Q2 2024 [2][16] - Semiconductor revenues were $432 million, up from $369 million year-over-year, while Electronics & Packaging revenues increased to $266 million from $229 million [2][16] - Gross margin for Q2 2025 was 46.6%, slightly down from 47.3% in Q2 2024, while operating margin improved to 13.9% from 14.4% [2][16] Earnings and Cash Flow - GAAP net income for Q2 2025 was $62 million, compared to $23 million in Q2 2024, resulting in net income per diluted share of $0.92 [2][16] - Non-GAAP net earnings were $119 million, with a diluted earnings per share of $1.77, reflecting strong operational performance [2][24] - Cash flows from operating activities for Q2 2025 were $165 million, up from $141 million in Q1 2025 [22][24] Balance Sheet and Debt Management - As of June 30, 2025, MKS had $674 million in cash and cash equivalents, with total liabilities of $6.273 billion [4][19] - The company has $3.1 billion in secured term loan principal outstanding and $1.4 billion in convertible senior notes [4][19] - MKS's proactive debt management included a $100 million prepayment in June and another $100 million in August 2025 [4][6] Future Guidance - For Q3 2025, MKS expects revenues of approximately $960 million, with a gross margin of around 46.5% [13][29] - The company anticipates GAAP net income of $67 million and non-GAAP net earnings of $121 million for the upcoming quarter [13][29] - MKS will continue to monitor the business environment, particularly the impact of U.S. import tariffs and international trade policies [7][29]

Group 1 - MKS Inc. has authorized a quarterly cash dividend of $0.22 per share, payable on September 5, 2025, to shareholders of record as of August 25, 2025 [1] - Future dividend declarations and payment dates are subject to the Board of Directors' final determination [1] Group 2 - MKS Inc. is a global provider of enabling technologies, delivering foundational technology solutions for semiconductor manufacturing, electronics, packaging, and specialty industrial applications [2] - The company focuses on addressing challenges in miniaturization and complexity in advanced device manufacturing, enhancing power, speed, feature enhancement, and optimized connectivity [2]

The earnings report, which is expected to be released on August 6, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. Zacks Consensus Estimate This maker of analysis and pro ...

Core Insights - MKS Instruments (MKSI) is currently viewed as a more attractive investment compared to Teradyne (TER) based on valuation metrics and analyst outlook [1][7] Valuation Metrics - MKSI has a forward P/E ratio of 15.40, significantly lower than TER's forward P/E of 29.16, indicating that MKSI may be undervalued [5] - The PEG ratio for MKSI is 1.15, while TER's PEG ratio is much higher at 4.03, suggesting that MKSI offers better value relative to its expected earnings growth [5] - MKSI's P/B ratio stands at 2.93, compared to TER's P/B of 5.23, further supporting the notion that MKSI is a more attractive investment [6] Analyst Ratings - MKSI holds a Zacks Rank of 1 (Strong Buy), indicating a positive earnings estimate revision trend, while TER has a Zacks Rank of 3 (Hold), reflecting a less favorable outlook [3][7] - The Value grade for MKSI is B, whereas TER has a Value grade of D, highlighting MKSI's stronger position in terms of value investing metrics [6]

Core Viewpoint - MKS (MKSI) is a strong candidate for investors looking for stocks that consistently beat earnings estimates, particularly in the Zacks Electronics - Miscellaneous Products industry [1]. Earnings Performance - MKS has a strong track record of surpassing earnings estimates, averaging a 16.20% beat over the last two quarters [2]. - In the last reported quarter, MKS earned $1.71 per share, exceeding the Zacks Consensus Estimate of $1.42 per share by 20.42% [3]. - In the previous quarter, MKS reported earnings of $2.15 per share against an expected $1.92 per share, resulting in an 11.98% surprise [3]. Earnings Estimates and Predictions - Recent estimates for MKS have been trending upward, with a positive Zacks Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [6]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [7]. - MKS currently has an Earnings ESP of +3.91%, suggesting analysts are optimistic about the company's earnings prospects [9]. Upcoming Earnings Report - The next earnings report for MKS is expected to be released on August 6, 2025 [9].

ANDOVER, Mass., July 14, 2025 (GLOBE NEWSWIRE) -- MKS Inc. (NASDAQ: MKSI), a global provider of enabling technologies that transform our world, today announced that the Company will release second quarter 2025 financial results after market close on Wednesday, August 6, 2025. A conference call with management will be held on Thursday, August 7, 2025 at 8:30 a.m. (Eastern Time). A live and archived webcast of the call can be accessed on the company's website at https://investor.mks.com/, or by registering as ...