MKS Instruments(MKSI) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Highlights 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] Management Commentary 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] - 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][7] Financial Performance 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 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) 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 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] - The Balance Sheet as of June 30, 2025, indicates total assets of $8.8 billion and total liabilities of $6.3 billion[21] - 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] Balance Sheet and Deleveraging 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] Third Quarter 2025 Outlook 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] Supplemental Information 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] - 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][24] - 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][16]