Financial Data and Key Metrics Changes - Revenue for the second quarter was $792 million, down 3% year on year but up 2% sequentially [11] - Gross margin on a GAAP basis was 44.4%, and on a non-GAAP basis, it was 46.6%, generally in line with guidance [12] - Non-GAAP EPS was $0.66 per share, at the high end of guidance [12] Business Line Data and Key Metrics Changes - Materials Solutions sales were $355 million, up 4% year on year, driven by CMP slurries and pads, selective etch, and deposition materials [13] - Advanced Purity Solutions sales were $440 million, down 7% year on year but up 1% sequentially, primarily due to a decline in facilities-based CapEx investments [14] Market Data and Key Metrics Changes - Asia customers represent approximately 70% of total revenue, with expectations to serve about 85% of China demand from Asian manufacturing sites by the end of the year [8][36] - The semiconductor market is expected to remain dynamic, with AI-enabled applications driving growth in advanced logic and HBM, while mainstream logic and NAND demand remains subdued [10] Company Strategy and Development Direction - The company is focused on optimizing its global manufacturing footprint and supply chain to enhance efficiency and reduce lead times [8] - Investments in new manufacturing facilities in Taiwan and Colorado are expected to ramp up production volumes in the fourth quarter [6][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for a stronger second half of the year, despite ongoing trade policy volatility and uncertainty impacting semiconductor demand [11] - The company remains committed to reducing gross leverage to below four times and prioritizing debt repayment [17] Other Important Information - Free cash flow was $79 million in the first half of the year, with expectations for a free cash flow margin in the low double digits for 2025 [15] - The company has implemented cost reduction initiatives expected to deliver $15 million in annual savings [15] Q&A Session Summary Question: Industry conditions in semiconductors - Management described the current industry conditions as mixed, with strong AI-related demand but subdued fab utilization levels in mainstream logic and NAND [25][26] Question: China business and order resumption - The China business started slow in Q2 but saw an 8% sequential increase in the latter part of the quarter after tariffs were put on hold [29][30] Question: Q3 guidance scenarios - Guidance for Q3 reflects a mix of favorable wafer start environment and ongoing tariff uncertainties impacting customer buying patterns [33][34] Question: Inventory adjustment process impact - Management indicated that inventory management is a balancing act impacting gross margins, with a focus on optimizing free cash flow [81][70] Question: Differences in sales channels - Fab revenue was up sequentially, while sales to equipment makers and chemical suppliers were down modestly, reflecting a soft industry CapEx environment [74]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $792 million, down 3% year on year but up 2% sequentially [11] - Gross margin on a GAAP basis was 44.4%, and on a non-GAAP basis, it was 46.6%, generally in line with guidance [12] - Non-GAAP EPS was $0.66 per share, at the high end of guidance [12] Business Line Data and Key Metrics Changes - Materials Solutions sales were $355 million, up 4% year on year, driven by CMP slurries and pads, selective etch, and deposition materials [13] - Advanced Purity Solutions sales were $440 million, down 7% year on year but up 1% sequentially, primarily due to a decline in facilities-based CapEx investments [14] Market Data and Key Metrics Changes - Asia customers represent approximately 70% of total revenue, with expectations to serve about 70% of this demand from non-U.S. manufacturing sites by year-end [7][8] - The China business saw a sequential increase of 8% in Q2, reflecting a recovery after tariffs were put on hold [32] Company Strategy and Development Direction - The company is focused on expanding its global manufacturing footprint and optimizing supply chains to mitigate trade policy volatility [7][8] - Investments in new manufacturing sites in Taiwan and Colorado are expected to ramp up volumes significantly in Q4 [6] Management's Comments on Operating Environment and Future Outlook - The semiconductor market remains dynamic, with mixed conditions; AI-related demand is strong, but overall fab utilization levels are subdued [10][28] - The company expects a stronger second half performance, despite ongoing uncertainties in trade policies and capital spending [11][57] Other Important Information - Free cash flow was $79 million in the first half of the year, with expectations for a low double-digit free cash flow margin in 2025 [15] - The company has paid down $50 million of its term loan, resulting in gross debt of approximately $4 billion [16] Q&A Session Summary Question: Industry conditions in semiconductors - The current industry conditions are mixed, with strong AI-related demand but subdued fab utilization levels in mainstream logic and NAND [27][28] Question: China business activity - The China business started slow in Q2 but saw an 8% sequential increase in the latter part of the quarter after tariffs were put on hold [32] Question: Q3 guidance scenarios - The guidance for Q3 reflects a mix of favorable wafer start environment and ongoing tariff uncertainties, making it difficult to predict exact impacts [36][37] Question: Inventory adjustment process - The inventory adjustment process is ongoing, and while it impacts gross margins, the focus remains on optimizing free cash flow [83] Question: Transition of U.S. business to Asia - The company expects to serve about 85% of China demand from Asian manufacturing sites by year-end, with a goal of reaching 95% next year [39][66]

Financial Data and Key Metrics Changes - The company's first quarter revenue grew by 5% year on year, excluding divestitures, slightly below guidance [4] - Gross margin was at 46.1%, at the midpoint of guidance and up sequentially due to strong cost management [12][13] - Non-GAAP EPS was $0.67 per share, at the midpoint of guidance [14] Business Line Data and Key Metrics Changes - Materials Solutions sales increased by 8% year on year, driven by strong growth in CMP slurries and pads, which were up almost 20% [4][14] - Advanced Purity Solutions sales rose by 3% year on year, but saw an 11% sequential decline due to lower demand for CapEx products [5][15] Market Data and Key Metrics Changes - The company expects a temporary impact on top-line revenue related to sales to China due to new tariffs, estimating a potential loss of up to $50 million for Q2 [10][31] - Excluding China, the business remains strong, with expectations for sequential growth in consumable product lines [29][30] Company Strategy and Development Direction - The company is focused on building a comprehensive global manufacturing footprint with regionally integrated supply chains to mitigate risks [7] - Investments in new manufacturing sites, such as the Colorado facility, are aimed at enhancing production capabilities and supporting customer technology roadmaps [6][18] Management's Comments on Operating Environment and Future Outlook - The management highlighted the uncertainty in the semiconductor industry due to new tariff regimes, affecting revenue guidance for Q2 [10][20] - Despite the challenges, the company remains committed to improving free cash flow and reducing debt levels [11][19] Other Important Information - The company achieved its first CHIPS Act milestone and expects to receive $9 million in the second quarter [18] - Capital expenditures for 2025 are expected to be approximately $300 million, down from previous expectations [17] Q&A Session Summary Question: Impact of tariffs on guidance and customer behavior - Management clarified that the Q2 guidance reflects strong business performance excluding China, with a solid book-to-bill ratio approaching 1.2 [28] - The potential $50 million loss in Q2 is due to new tariffs, but alternative manufacturing sites are being qualified to mitigate this impact [31][32] Question: Changes in customer discussions regarding Moly adoption - Despite macro uncertainties, major node transitions are still on track, with expectations for Moly adoption in the second half of the year [35][36] Question: Recovery of lost sales due to tariffs - Management believes the impact is temporary and that the China business remains strong, with active discussions ongoing to transition demand to alternative sites [41][44] Question: Q1 results and customer behavior - The Q1 performance was slightly below guidance due to softer demand for CapEx products, particularly in new fab construction [46][48] Question: Gross margin impact from tariffs - Management indicated that while tariffs may have a modest impact on Q2 gross margins, they expect overall gross margins to improve in 2025 compared to 2024 [56] Question: Advanced Packaging growth outlook - Advanced packaging is a small but rapidly growing market, with expectations for over 25% growth in 2025 driven by high viscosity dispense solutions and HBM slurries [97][98]

Financial Performance - Entegris's net sales for 1Q25 were $773.2 million, a 0.3% increase compared to $771.0 million in 1Q24, but a 9.0% decrease compared to $849.8 million in 4Q24 [5] - The company's GAAP net income for 1Q25 was $62.9 million, a 38.9% increase compared to $45.3 million in 1Q24, but a 38.5% decrease compared to $102.3 million in 4Q24 [5] - Diluted earnings per common share were $0.41 in 1Q25, up 36.7% from $0.30 in 1Q24, but down 38.8% from $0.67 in 4Q24 [5] - Adjusted EBITDA for 1Q25 was $220.7 million, representing 28.5% of net sales [6] Segment Performance - Materials Solutions (MS) segment net sales were $341.4 million in 1Q25, a 2.5% decrease compared to $350.0 million in 1Q24, but excluding divestiture, adjusted net sales increased by 8.0% to $341.4 million from $316.1 million [9] - Advanced Purity Solutions (APS) segment net sales were $433.9 million in 1Q25, a 2.5% increase compared to $423.3 million in 1Q24, but an 11.7% decrease compared to $491.2 million in 4Q24 [12] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of 1Q25 were $340.9 million [15] - Long-term debt was $3.9845 billion [15] - Cash provided by operating activities in 1Q25 was $140.4 million [16] Outlook - The company's net sales guidance for 2Q25 is $735 million to $775 million [17, 18] - Non-GAAP net income is projected to be between $91 million and $102 million [18]