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ENTEGRIS INC (ENTG)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $773.2M, up 0.3% y/y but down 9.0% q/q; non-GAAP EPS was $0.67, with gross margin 46.1% and adjusted EBITDA margin 28.5%—at or near the midpoint of guidance . Versus S&P Global consensus, revenue and EPS were modest misses (Rev: $773.2M vs $789.9M*, EPS: $0.67 vs $0.684*). Values retrieved from S&P Global.
  • Management widened Q2 2025 revenue guidance to $735–$775M and set non-GAAP EPS at $0.60–$0.67 due to new China tariff uncertainty on U.S.-made shipments; non-GAAP tax rate guided down to ~12% (prior 15%) .
  • Segment mix: Advanced Purity Solutions (APS) grew 2.5% y/y to $433.9M but fell 11.7% q/q; Materials Solutions (MS) declined 2.5% y/y to $341.4M and 5.5% q/q (seasonality), with strong demand for CMP consumables and micro contamination control .
  • Near-term stock narrative catalysts: clarity on tariff mitigation pace (alternate Asia manufacturing qualifications), POR wins in molybdenum deposition/etch for 3D NAND in H2, advanced packaging momentum, and free cash flow improvement and deleveraging (Q1 FCF $32M; net debt ~$3.7B; gross leverage 4.4x) .

What Went Well and What Went Wrong

What Went Well

  • CMP consumables and micro contamination control drove y/y growth ex-divestitures; CEO: “strong demand for our CMP consumables and micro contamination control solutions. Gross margin, EBITDA margin and non-GAAP EPS were within guidance.” .
  • Margin execution: GAAP and non-GAAP gross margin 46.1%; adjusted EBITDA margin 28.5% at guidance midpoint, supported by cost management across the supply chain .
  • Strategic progress: CHIPS Act milestones and facility ramps in Colorado and Kaohsiung; Colorado reached first CHIPS milestone with $9M expected in Q2; Kaohsiung liquid filter qualifications progressing to largely complete by year-end .

What Went Wrong

  • Top-line slight miss vs internal Q4 outlook and consensus due to weaker-than-expected CapEx products (fluid handling, FOUPs) and FX headwinds (~$5M y/y); as-reported sales flat y/y and down 9% q/q .
  • APS margin compressed sequentially to 25.4% on lower volume from CapEx products; APS segment profit fell 19.9% q/q .
  • Tariffs: China’s new tariffs halted inbound U.S.-made shipments temporarily; worst-case Q2 impact cited up to ~$50M, prompting widened guidance and removal of full-year update amidst uncertainty .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$771.0 $849.8 $773.2
GAAP Diluted EPS ($)$0.30 $0.67 $0.41
Non-GAAP Diluted EPS ($)$0.68 $0.84 $0.67
Gross Margin %45.6% 45.6% 46.1%
Operating Margin %15.3% 17.7% 15.8%
Adjusted EBITDA Margin %29.0% 29.2% 28.5%
SegmentQ1 2024Q4 2024Q1 2025
Materials Solutions Net Sales ($M)$350.0 $361.1 $341.4
Materials Solutions Segment Profit ($M)$67.1 $77.1 $75.0
APS Net Sales ($M)$423.3 $491.2 $433.9
APS Segment Profit ($M)$111.2 $134.9 $108.1
KPIsQ1 2024Q4 2024Q1 2025
Cash from Operations ($M)$147.2 $176.1 $140.4
Capital Expenditures ($M)$66.6 $107.5 $108.0
Cash & Equivalents ($M)$340.7 $329.2 $340.9
Free Cash Flow ($M)——$32.0
Net Debt ($B)—~$3.7 ~$3.7
Gross Leverage (x)—4.3x 4.4x

Results vs S&P Global Consensus (Q1 2025)

MetricConsensusActualSurprise
Revenue ($USD Millions)$789.9*$773.2 -$16.8 (-2.1%)*
Primary EPS ($)$0.684*$0.67 -$0.014*
EBITDA ($USD Millions)$226.6*$220.7 -$5.9 (-2.6%)*
*Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($M)Q2 2025—$735–$775 Widened range due to China tariff uncertainty
GAAP EPS ($)Q2 2025—$0.34–$0.41 New; reflects tariff impact
Non-GAAP EPS ($)Q2 2025—$0.60–$0.67 New; aligns with margin/OpEx plans
Adjusted EBITDA Margin %Q2 2025—~27.5% New
GAAP Operating Income ($M)Q2 2025—$104–$125 New
Adjusted Operating Income ($M)Q2 2025—$150–$172 New
GAAP OpEx ($M)Q2 2025—$225–$229 New
Non-GAAP OpEx ($M)Q2 2025—$179–$183 New
Net Interest Expense ($M)Q2 2025—~$50 New
Non-GAAP Tax Rate (%)Q2 2025~15% FY 2025 ~12% (reserve expiration) Lowered
Depreciation ($M)Q2 2025—~$51 New
Dividend per Share ($)Q2 2025$0.10 (declared Apr 16) $0.10 Maintained

Earnings Call Themes & Trends

TopicQ3 2024 (Prev)Q4 2024 (Prev)Q1 2025 (Current)Trend
Tariffs/macroMonitoring export controls; no quantified impact in guidance Estimated $30–$40M 2025 loss from new U.S. restrictions; outperformance target inclusive China tariffs temporarily halt U.S.-made shipments; worst-case Q2 impact up to $50M; widened Q2 guide Deteriorated; mitigation underway
AI/advanced logicStrong advanced foundry demand; y/y Taiwan up ~15% proxy AI/advanced logic drove strong APS/MS exits Advanced logic strong; defect management and purity focus boosting micro contamination Positive, sustaining
Molybdenum (3D NAND, later logic)POR wins; adoption expected next year Node transitions in H2’25; moly deposition/etch pipeline Expect most 3D NAND leaders to transition to moly in H2’25; working on wet etch; logic later Execution progressing
Advanced packagingEmerging, doubling y/y in Q1’25 vs Q1’24 Revenues ~$100M in 2024; strong 2025 growth expected Sequential APS decline partly CapEx; still strong demand for high-viscosity dispense Structurally growing
Supply chain & facilitiesKSP (Taiwan) and Colorado ramp; recast divisions KSP drag ~80bps FY’24 GM; CHIPS grant up to $77M First CHIPS milestone ($9M); KSP filters progressing; Colorado supplier localization (~95%) Ramping; inefficiencies easing by 2026
Free cash flow & debtFCF improving; leverage focus FY’24 FCF ~10%; debt paid down $150M in Q4; target <4x gross leverage Q1 FCF $32M; net debt ~$3.7B; gross leverage 4.4x; priority to delever Improving path

Management Commentary

  • CEO (press release): “Our first quarter revenue grew 5 percent year-on-year, excluding divestitures… Gross margin, EBITDA margin and non-GAAP EPS were within guidance.”
  • CEO (call): “Ex China, our second quarter forecast is solid… worst case [tariff] could be up to $50 million… we expect to substantially mitigate by year-end through alternate Asia sites.”
  • CFO (call): “Gross margin… was 46.1%… Adjusted EBITDA… 28.5%… non-GAAP EPS was $0.67… we expect non-GAAP tax rate to be ~12% in Q2 due to expiration of a tax reserve.”
  • CEO (technology): “We are making good progress ahead of commercial volumes of moly deposition materials… very pleased with the POR wins… wet-etch chemistries also progressing.”

Q&A Highlights

  • Tariff impact quantification and mitigation: worst-case Q2 revenue impact up to $50M; ex-China business expected up sequentially; alternate Asia manufacturing qualifications underway to recover shipments by H2 .
  • Moly adoption timing: most 3D NAND leaders expected to transition in H2’25; logic (N2/18A) also ramping in H2’25, positioning content per wafer gains into 2026 .
  • Gross margin puts/takes: near-term modest tariff impact and volume deleverage; productivity and ramp inefficiencies (Taiwan/Colorado) easing by 2026; 2025 GM expected modestly up vs 2024 .
  • NAND exposure and demand: NAND ~10% of revenue; mainstream utilization low with filter-life stretching, but purity needs rising in AI and HBM (IPA purifiers example) .
  • Taiwan facility ramp: Kaohsiung run-rate expected to exceed $120M exiting 2025; filter qualifications largely complete by year-end .

Estimates Context

  • Q1 2025 vs S&P Global consensus: Revenue $773.2M vs $789.9M*; EPS $0.67 vs $0.684*; Adjusted EBITDA $220.7M vs $226.6M*. Slight misses amid CapEx product weakness and FX headwinds . Values retrieved from S&P Global.
  • Q2 2025: Company guide ($735–$775M; non-GAAP EPS $0.60–$0.67) acknowledges tariff uncertainty; consensus as of reporting period converged near midpoint*. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term revenue risk centered on China tariffs; watch pace of alternate site qualifications and any exemptions that could narrow the guidance range .
  • Margin resilience remains intact (GM 46.1%, adj. EBITDA 28.5%); modest GM pressure in Q2 likely transient; structural drivers (productivity, mix, ramp normalization) support margin expansion into 2026 .
  • MS momentum in CMP slurries/pads and APS micro contamination should continue with H2 node transitions; monitor moly POR commercialization in 3D NAND and wet-etch traction .
  • Advanced packaging is a multiyear growth vector; company cited >doubling y/y in Q1 vs prior year and expects >25% growth in 2025 for the business .
  • FCF and deleveraging are active priorities (Q1 FCF $32M; net debt ~$3.7B; gross leverage 4.4x); management plans to retain ~75% of APS cost savings and reduce FY’25 capex to ~$300M .
  • Dividend sustained at $0.10/share; stable capital returns alongside debt reduction .
  • Trading setup: headline volatility tied to tariff developments; potential positive catalysts include tariff mitigation progress, new POR disclosures (moly/advanced packaging), and improving H2 visibility on node transitions .

Source Documents

  • Q1 2025 8-K and exhibits: results, reconciliations, outlook
  • Q1 2025 earnings press release
  • Q1 2025 earnings call transcript
  • Prior quarters (Q4 and Q3 2024) for trend context
  • Dividend press release (Apr 16, 2025)
  • CEO succession (May 12, 2025) for broader leadership context