MKS Earnings Miss Estimates in Q4, Revenues Increase Y/Y

Core Insights - MKS Inc. (MKSI) reported fourth-quarter 2025 adjusted earnings of $2.47 per share, missing the Zacks Consensus Estimate by 1.59%, but showing a year-over-year increase of 14.9% [1][9] - Revenues reached $1.03 billion, surpassing the consensus mark by 1.2% and reflecting a 10.5% year-over-year growth [1][9] Revenue Breakdown - Product revenues, which accounted for 87.8% of total revenues, totaled $907 million, marking a 10.1% year-over-year increase [3] - Services revenues, making up 12.2% of total revenues, increased by 13.5% year over year to $126 million [3] - Semiconductor market revenues, representing 42.1% of total revenues, rose 8.7% year over year to $435 million [4] - Electronics & Packaging revenues, comprising 29.3% of total revenues, amounted to $303 million, up 19.3% year over year [4] - Specialty Industrial revenues, accounting for 28.6% of total revenues, increased by 5% year over year to $295 million [4] Operating Performance - Adjusted gross margin contracted by 70 basis points year over year to 46.5% [5] - Adjusted EBITDA increased by 5.1% year over year to $249 million, with the adjusted EBITDA margin contracting by 120 basis points to 24.1% [5] - Total operating expenses rose by 8.7% year over year to $263 million [5] - Non-GAAP operating income was reported at $217 million, up 9% year over year, with the adjusted operating margin contracting by 30 basis points to 21% [6] Balance Sheet Overview - As of December 31, 2025, cash and cash equivalents stood at $675 million, down from $697 million as of September 30 [7] - Long-term debt totaled $4.15 billion [7] - Cash flow from operations was $142 million in Q4 2025, compared to $197 million in the previous quarter [7] - Free cash flow was reported at $91 million, down from $147 million in the previous quarter [7] Q1 Guidance - For the first quarter of 2026, MKSI expects revenues of $1.04 billion, with a margin of +/- $40 million [8] - The company anticipates a gross margin of 46% (+/- 1%) and an adjusted EBITDA of $251 million (+/- $24 million) [8] - Non-GAAP earnings are expected to be $2.00 (+/- 28 cents) per share [8]