Entegris(ENTG) - 2025 Q2 - Quarterly Results

Executive Summary & Business Update 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 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 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] - AI-enabled applications are driving significant growth in advanced logic and HBM, while overall fab activity remains subdued[2] - 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] Third Quarter 2025 Outlook 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 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] - 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] About Entegris 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] - The company has approximately 8,000 employees globally and is ISO 9001 certified, with manufacturing, customer service, and research facilities in multiple countries[10] Financial Results 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 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 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 | $0.41 | Six Months Ended June 28, 2025 This subsection presents Entegris' GAAP financial results for the six months ended June 28, 2025, compared to the same period in the prior year | Metric | Jun 28, 2025 ($ 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 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 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 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 This section provides detailed reconciliations of Entegris' GAAP financial results to non-GAAP measures, offering insights into adjusted performance metrics Non-GAAP Information Disclosure 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] - Management uses non-GAAP measures to understand and manage the business, evaluate segment performance, and make operating decisions[11] Reconciliation of GAAP Gross Profit to Adjusted Gross Profit 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 | $356.7 | | Gross margin - as a % of net sales | 44.4 % | 46.2 % | 46.1 % | | Adjusted gross margin - as a % of net sales | 44.6 % | 46.2 % | 46.1 % | Reconciliation of GAAP Segment Profit to Adjusted Operating Income This reconciliation adjusts GAAP segment profit for items such as restructuring costs, loss/gain on sale of business, and impairment of long-lived assets, to arrive at adjusted operating income for each segment and the total company | Metric | Jun 28, 2025 ($ 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 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 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 | $0.67 | Reconciliation of Reported Net Sales to Adjusted Net Sales (excluding divestiture) This section reconciles reported net sales to adjusted net sales by excluding the impact of divestitures, specifically the PIM business divested in Q1 2024, to provide a comparable view of ongoing sales performance | Metric | Jun 28, 2025 (3M) ($ 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 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 This section provides details on the second-quarter results conference call and important cautionary notes regarding forward-looking statements Second-Quarter Results Conference Call 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] - Participants can dial 800-579-2543 or +1 785-424-1789, referencing confirmation ID: ENTGQ225, and access the live webcast and replay online[8] - 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 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] - 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] - Entegris undertakes no obligation to update publicly any forward-looking statements or information contained herein[13]