Core Insights - MKS reported strong financial performance for fiscal 2025, achieving revenue of $3.9 billion, a 10% increase year over year, with notable growth in semiconductor and electronics/packaging sectors, while specialty industrial revenue declined by 4% [9][10]. Financial Performance - Q4 revenue reached $1.03 billion, up 5% sequentially and 10% year over year, with a gross margin of 46.4% and net earnings of $168 million, or $2.47 per diluted share, exceeding guidance [6][8]. - For the full year, gross margin was 46.7%, down 90 basis points year over year, primarily due to tariff-related costs and product mix [11]. - Operating income for the year was approximately $217 million, reflecting a 21% operating margin, while adjusted EBITDA was $249 million, representing a 24.1% margin [5]. Market Segments - Specialty industrial revenue was $295 million in Q4, up 4% sequentially and 5% year over year, driven by improvements in research and defense, but offset by weakness in automotive [1]. - Electronics and packaging revenue was $303 million in Q4, up 5% sequentially and 19% year over year, mainly due to increased sales in flexible PCB drilling and chemistry equipment [2]. - Semiconductor revenue was $435 million in Q4, up 5% sequentially and 9% year over year, supported by strong demand in DRAM and logic/foundry applications [3]. Cash Flow and Debt Management - MKS generated operating cash flow of $645 million in 2025, an increase of $117 million year over year, with free cash flow rising 21% to $497 million [12]. - The company made significant debt repayments, totaling $400 million in 2025 and an additional $100 million in February 2026, reducing net debt to $3.6 billion with a net leverage ratio of 3.7x [4][12]. Future Outlook - For Q1, MKS projects revenue of $1.04 billion ± $40 million, with a gross margin of 46% ± 100 basis points, influenced by product mix and seasonal factors [15]. - The company anticipates continued demand growth in semiconductor and electronics markets, driven by increased capital expenditures from major chip manufacturers [7][17]. - MKS plans to ramp up its new "supercenter" factory in Malaysia in the second half of the year, aimed at enhancing capacity and supply chain resilience [18].