Entegris Q4 Earnings Call Highlights

Entegris (NASDAQ:ENTG) reported fourth-quarter 2025 results that came in at the high end or above its guidance ranges, as management emphasized disciplined execution and early signs of a more constructive semiconductor backdrop heading into 2026.

Chief Executive Officer Dave Reeder said fourth-quarter revenue, gross margin, adjusted EBITDA margin, and non-GAAP EPS all landed at the high end or above guidance. For the full year, he said total revenue was approximately flat versus 2024 excluding divestitures, with “unit-driven” revenue up about 2% in 2025 and “CapEx-driven” revenue down 7% in line with reduced industry fab construction spending.

Fourth-quarter results and segment performance

Chief Financial Officer Linda LaGorga said fourth-quarter sales were $824 million, down 3% year-over-year and up 2% sequentially. GAAP gross margin was 43.8%, and non-GAAP gross margin was 44%, with the sequential improvement driven primarily by increased production volumes.

LaGorga reported GAAP operating expenses of $256 million and non-GAAP operating expenses of $188 million. Adjusted EBITDA margin was 27.7% of revenue, above guidance. GAAP diluted EPS was $0.32 and non-GAAP EPS was $0.70, which she said was above guidance.

By segment, LaGorga outlined:

• Material Solutions (MS): Q4 sales of $362 million, flat year-over-year and up 4% sequentially. Sequential growth was driven primarily by advanced deposition materials, supported by demand for molybdenum (moly) deposition within NAND. Adjusted operating margin was 20.9%.
• Advanced Purity Solutions (APS): Q4 sales of $465 million, down 5% year-over-year and up 1% sequentially. The year-over-year decline was driven by fluid handling and FOUPs, partially offset by liquid filtration, which delivered “another record quarter.” Adjusted operating margin was 24.8%.

Cash flow, leverage, and capital spending

For 2025, LaGorga said free cash flow was $404 million, representing a 12.7% free cash flow margin, nearly a 300 basis point improvement year over year. She attributed the improvement to working capital execution, including accounts receivable and reduced year-over-year inventory growth.

Capital expenditures in 2025 were $299 million, about 9% of sales. Reeder added that Entegris has completed a multi-year manufacturing CapEx investment cycle that began in 2022 and expects 2026 CapEx to decline to $250 million, with longer-term CapEx returning to approximately 7% to 8% of sales.

On the balance sheet, LaGorga said Entegris paid down $150 million of term loan debt in the fourth quarter and $300 million for the full year. Gross debt ended the quarter at about $3.7 billion, with net debt of $3.4 billion. Net leverage ended 2025 at 3.8x, and management reiterated a target to reduce net leverage to below 3.5x by the end of 2026.

2026 demand outlook: node transitions, MSI growth, and CapEx variability

Reeder said the industry backdrop “appears more constructive” in 2026 and highlighted multiple areas that could support improvement versus 2025, including logic and memory node transitions, stronger industry MSI (wafer starts) growth, and a recovery in fab construction spending.

Management expects mid-single-digit industry MSI growth in 2026 and noted that about 75% of Entegris revenue is unit-driven and correlated to MSI. Reeder said advanced logic utilization is already near 100%, and he expects demand for 2-nanometer devices to meaningfully increase wafer output through 2026, benefiting Entegris through higher content per wafer and the company’s share positions at advanced nodes.

In memory, Reeder described NAND transitions from “low 250 layers” to about 300 layers and said next-generation DRAM and HBM products are expected to roll out in 2026. He said NAND bit growth is expected to exceed 20% in 2026, driven more by higher layer count than a major increase in MSI, and he expects a double-digit increase in NAND content per wafer tied to higher layer nodes and new materials such as moly and selective etch.

For CapEx-driven exposure, management said 25% of company revenue is tied to industry CapEx, with roughly two-thirds of that correlated to fab construction and one-third to wafer fab equipment (WFE). Reeder said fab construction spending is expected to grow modestly in 2026 after a high single-digit decline in 2025, while WFE is expected to deliver strong growth. He cautioned during Q&A that the timing of fab construction-related demand has been moving “pretty significantly month to month,” and he characterized the fab CapEx portion as a “wild card,” potentially more second-half weighted.

Operational priorities: POR wins, footprint actions, and local-for-local manufacturing

Reeder updated investors on four CEO priorities he first discussed last quarter:

• Deepening customer intimacy and securing positions of record (PORs): He said Entegris has secured strong POR positions at the most advanced logic nodes across product lines including CMP consumables, advanced deposition and implant materials, liquid purification/filtration, and wafer handling. He also cited traction in advanced memory (DRAM/HBM) and POR wins in next-generation NAND across deposition materials, CMP, and selective etch applications.
• Improving utilization and rationalizing the footprint: Reeder said the Taiwan facility continues to ramp, and the Colorado facility is expected to substantially complete key customer product qualifications in 2026. He also said Entegris exited its Chester, Pennsylvania facility in the fourth quarter and expects to rationalize at least one additional facility in the first half of 2026.
• Improving free cash flow: Reeder said free cash flow margin improved to 12.7% in 2025, in line with the company’s target, and that free cash flow is now incorporated into short- and long-term incentive plans.
• Increasing local-for-local manufacturing (especially for China): Reeder said the company expects about 85% of China revenue in the first quarter to be supplied by Asia facilities, with the proportion increasing through 2026.

On China, management said China remained about 21% of sales in both 2024 and 2025, with dollars down slightly. Reeder said the company’s main obstacle in China is assuring supply, and he expects continued progress in qualifying more Asia-based manufacturing to support that market.

Reeder also said Entegris is rescheduling its Capital Markets Day from May to the fall due to the CFO transition, and he thanked LaGorga for her contributions.

First-quarter outlook and near-term margin commentary

For the first quarter, LaGorga guided sales of $785 million to $825 million, reflecting about a 4% year-over-year increase at the midpoint. Gross margin is expected to be 44.5% to 45.5% on both a GAAP and non-GAAP basis, including about 100 basis points of benefit in Q1 from a change related to the useful lives of assets.

She guided EBITDA margin of 26.5% to 27.5%, GAAP EPS of $0.43 to $0.51, and non-GAAP EPS of $0.70 to $0.78. For Q2, management expects sales to increase 1% to 3% sequentially from Q1, in line with normal seasonality.

In Q&A, management said gross margin has stabilized around the current range, with volume leverage, the Taiwan ramp, and facility rationalizations expected to support improvement as production increases.

About Entegris (NASDAQ:ENTG)

Entegris, Inc is a leading provider of advanced materials and process control solutions for the semiconductor and other high-technology industries. The company develops and supplies a broad portfolio of products designed to ensure purity and reliability throughout the manufacturing process, helping customers address critical contamination and yield challenges.

Entegris’s product offerings include high-purity chemicals and specialty materials, liquid and gas filtration and purification systems, and sophisticated wafer and chip handling solutions.