MKS : MKSI 1Q'26 Earnings Call Presentation

Published: 2026-05-07 08:43:14 ET MKSI

Published on 05/07/2026 at 08:43 am EDT

MKS Inc.

May 7, 2026

Use of Non-GAAP Financial Measures

This presentation includes financial measures that are not in accordance with U.S. generally accepted accounting principles ("Non-GAAP financial measures"). These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, MKS' reported results under U.S. generally accepted accounting principles ("GAAP"), and may be different from Non-GAAP financial measures used by other companies. In addition, these Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. MKS management believes the presentation of these Non-GAAP financial measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. For further information regarding non-GAAP financial measures, please refer to the appendix at the end of this presentation.

MKS is not providing a quantitative reconciliation of forward-looking full-year Non-GAAP income tax rate to GAAP income tax rate because it is unable to estimate with reasonable certainty the ultimate timing or amount of certain significant items without unreasonable efforts. These items include, but are not limited to, restructuring expense, goodwill and intangible asset impairments, debt refinancing fees, debt extinguishment costs, and the income tax effect of these items as well as tax planning strategies, legislation and other discrete items.

For a detailed breakout of net revenues by end-market and division, please visit the Net Revenues by End Market & Division presentation available under Events &

Presentations on the Investor Relations section of MKS' website at investor.mks.com.

$1.1B

REVENUE

47.0%

GROSS MARGIN

$277M

ADJUSTED

EBITDA

$2.30

NON-GAAP

NET EARNINGS PER

DILUTED SHARE

Revenues, gross margin, adjusted EBITDA and Non-GAAP net earnings per share at high end or above guidance ranges

Strong bookings across end markets indicate continued revenue momentum

Excellent position to benefit from AI-related investment across Semiconductor and Electronics & Packaging end markets

Semiconductor

Q1 Highlights Business Trends

Q/Q CHANGE

+7%

Y/Y CHANGE

+13%

Y/Y CHANGE1

Excluding FX

+11%

Q1 2026

$466M

REVENUE

Strong broad-based revenue growth driven by products targeted to DRAM, NAND and Foundry/Logic applications

Power solutions sequential growth reflects increasing NAND equipment upgrades

Guidance Q2 2026

$550M

+/- $15M

REVENUE

Q2'26 revenue expected to accelerate, growing high-teens sequentially and over 25% year-over year

Strong order activity, especially in remote plasma and microwave for advanced DRAM applications, dissolved gas for logic and lasers for back-end applications

1 For further information regarding estimated impact of FX, refer to

appendix at the end of this presentation.

Electronics & Packaging

Q1 Highlights

Business Trends

Q1 2026

$321M

REVENUE

Q/Q CHANGE +6%

Y/Y CHANGE +27%

Y/Y CHANGE1 +17%

Excluding FX & Palladium

Guidance Q2 2026

$350M

+/- $15M

REVENUE

Strong growth driven by flexible PCB drilling systems due to consumer electronics seasonality and strong performance in chemistry and chemistry equipment

Very robust order environment for laser drilling

equipment, chemistry and chemistry equipment

Q2 revenue expected to grow in the high single digits sequentially and over 30% year over year with continued strength in chemistry and chemistry equipment

Laser drilling orders remain very healthy and primarily in Flex for smartphones and wearables, but also rigid PCB laser applications related to the LEO satellite market

1 For further information regarding estimated impact of FX and Ransomware, refer to appendix at the end of this presentation.

1 For further information regarding estimated impact of FX and Palladium, refer to appendix at the end of this presentation.

Specialty Industrial

Q1 Highlights Business Trends

Q/Q CHANGE

-2%

Y/Y CHANGE

+8%

Y/Y CHANGE1

Excluding FX & Palladium

+5%

Q1 2026

$291M

REVENUE

Sequential revenue decline primarily due to Lunar New Year seasonality

Strong year-over-year growth driven by

datacom and defense markets

Guidance Q2 2026

$300M

+/- $10M

REVENUE

Expect modest sequential growth

Specialty Industrial market leverages proprietary technologies to deliver attractive margins and incremental cash flows

1 For further information regarding estimated impact of FX and Palladium, refer to appendix at the end of this presentation.

Q1'26 SUMMARY

Q1'26

Q4'25

Q1'25

Y/Y Change Excl. FX and Pd(1)

Semiconductor

$466M

$435M

$413M

11%

Electronics & Packaging

$321M

$303M

$253M

17%

Specialty Industrial

$291M

$295M

$270M

Revenue

$1,078M

$1,033M

$936M

11%

Non-GAAP Financial Measures

Gross Margin

47.0%

46.4%

47.4%

Operating Margin

21.8%

21.0%

20.2%

Interest Expense, Net

$37M

$42M

$45M

Income Tax Rate

20.9%

0.9%

19.9%

Net Earnings

$157M

$168M

$116M

Net Earnings per Diluted Share

$2.30

$2.47

$1.71

Adjusted EBITDA

$277M

$249M

$236M

Adjusted EBITDA Margin

25.7%

24.1%

25.2%

GAAP Financial Measures

Gross Margin

47.0%

46.4%

47.4%

Operating Margin

13.8%

13.9%

11.9%

Interest Expense, Net

$43M

$47M

$50M

Income Tax Rate

17.7%

-20.8%

12.3%

Net Income

$84M

$108M

$52M

Net Income per Diluted Share

$1.18

$1.58

$0.77

Revenue above the high end of guidance in our Semiconductor and Electronics & Packaging markets

Gross margin at high end of guidance on higher volumes and favorable mix, including higher chemistry revenue. Year-over-year decline due to incremental tariff impacts.

Non-GAAP operating expenses include higher R&D investments and seasonal increase in stock-based compensation

Adjusted EBITDA and Non-GAAP net earnings per diluted share above high end of guidance reflecting strong revenue, gross margin flow through and operating leverage

1 For further information regarding estimated impact of FX and Palladium, refer to appendix at the end of this presentation.

Q1'26 SUMMARY

Q1'26

Q4'25

Cash and Cash Equivalents

$569M

$675M

Trade Accounts Receivable, Net

$775M

$651M

Inventories

$949M

$921M

Total Current Assets

$2,545M

$2,510M

Total Assets

$8,728M

$8,796M

Debt Principal

$4,134M

$4,278M

Total Liabilities

$5,917M

$6,077M

Stockholders' Equity

$2,811M

$2,719M

Operating Cash Flow

$53M

$142M

Capex

$25M

$51M

Free Cash Flow

$29M

$91M

Unlevered Free Cash Flow

$46M

$131M

Liquidity of over $1.5 billion, consisting of $569 million of cash and cash equivalents and an undrawn revolving credit facility of $1.0 billion

Free cash flow lower in the first quarter due to variable compensation payments and increased working capital related to the ramp in demand

Net leverage ratio of 3.5x with continued de-leveraging and trailing twelve months Adjusted

EBITDA of over $1.0 billion

Outlook

Q2'26

Q1'26 Actual

Revenue

$1,200M +/- $40M

$1,078M

Non-GAAP Financial Measures

Gross Margin

47.0% +/- 100 bps

47.0%

Operating Expenses

$275M +/- $5M

$271M

Operating Income

$289M

$235M

Operating Margin

24.1%

21.8%

Interest Expense, Net

$35M

$37M

Income Tax Rate

20%

20.9%

Net Earnings

$202M +/- $21M

$157M

Net Earnings per Diluted Share

$2.90 +/- $0.30

$2.30

Adjusted EBITDA

$328M +/- $26M

$277M

Diluted Share Count

69.6M

68.2M

Revenue outlook by end-market:

Semiconductor - $550M +/- $15M

Electronics & Packaging - $350M +/- $15M

Specialty Industrial - $300M +/- $10M

Gross margin reflects higher volumes primarily across semiconductor and chemistry equipment products

Non-GAAP operating income, adjusted EBITDA and Non-GAAP net earnings per diluted share up sequentially reflecting strong revenue, gross margin flow through and operating leverage

Non-GAAP interest expense, net reflects reduction from Q1'26

debt refinancing, EUR senior note offering and voluntary

prepayments in Q1'26 and May 2026

Non-GAAP tax rate of approximately 20% in the second quarter and 18% to 20% range for the year

Semiconductor subsystems support leading-edge deposition and etch applications across logic and memory

Electronics & Packaging momentum in AI-related applications driven by

proprietary chemistry and chemistry equipment

Q1'26

Specialty Industrial

27%

Semi 43%

Electronics & Packaging 30%

Consumables & Service 40%

2025 2026

Total

Q1'26 vs Q1'25(1)

Change Excluding

Q1 Q2 Q3 Q4 FY'25 Q1

Change FX Pd

FX & Pd

Semiconductor

$ 413 $

432 $

415 $

435 $ 1,696

$ 466

13%

11%

Electronics & Packaging

253

266

289

303 1,111

321

27%

17%

Specialty Industrial

270 275 284 295 1,124

291

$ 936 $ 973 $ 988 $ 1,033 $ 3,931

$ 1,078

15%

11%

1 "Total Change" represents the percentage change in net revenues. "FX" and "Pd" reflect the estimated impact of foreign exchange rates and palladium prices on net revenues, respectively. "Change Excluding FX & Pd" is the difference between (i) "Total Change" and (ii) "FX" and "Pd."

in millions except percentages

Q2'26E

Q1'26

Q4'25

Q1'25

Net income

$ 151

$ 84

$ 108

$ 52

Restructuring and other

Legal Settlement

Amortization of intangible assets

Loss on extinguishment of debt

Amortization of debt issuance costs

Loss from de-designation of interest rate hedges

Fees and expenses related to debt activities

Tax effect of Non-GAAP adjustments

(17)

(23)

(20)

(22)

Non-GAAP net earnings

$ 202

$ 157

$ 168

$ 116

Non-GAAP net earnings per diluted share

$ 2.90

$ 2.30

$ 2.47

$ 1.71

Net income per share

$ 2.09

$ 1.18

$ 1.58

$ 0.77

Weighted average diluted shares outstanding

72.3

71.1

68.0

67.7

Convertible debt capped calls

2.7

2.9

Non-GAAP weighted average diluted shares outstanding

69.6

68.2

68.0

67.7

Gross profit

$ 564

$ 507

$ 480

$ 444

Gross margin

47.0%

46.4%

47.4%

in millions, other than per diluted share amounts and percentages

Q2'26E

Q1'26

Q4'25

Q1'25

Operating expenses

$ 337

$ 358

$ 336

$ 332

Restructuring and other

Legal Settlement

Amortization of intangible assets

Fees and expenses related to debt activities

Non-GAAP operating expenses

$ 275

$ 271

$ 263

$ 254

Income from operations

$ 227

$ 149

$ 144

$ 111

Operating margin

18.9%

13.8%

13.9%

11.9%

Restructuring and other

Legal Settlement

Amortization of intangible assets

Fees and expenses related to debt activities

Non-GAAP income from operations

$ 289

$ 235

$ 217

$ 189

Non-GAAP operating margin

24.1%

21.8%

21.0%

20.2%

Interest expense, net

$ 38

$ 43

$ 47

$ 50

Amortization of debt issuance costs

Loss from de-designation of interest rate hedges

Non-GAAP interest expense, net

$ 35

$ 37

$ 42

$ 45

in millions, except percentages

Q2'26E

Q1'26

Q4'25

Q3'25

Q2'25

Q1'25

Net income

$ 151

$ 84

$ 108

$ 74

$ 62

$ 52

Interest expense, net

Other expense (income), net

(1)

Provision (benefit) for income taxes

(19)

Depreciation

Amortization of intangible assets

Stock-based compensation

Restructuring and other

Legal Settlement

Loss on extinguishment of debt

Fees and expenses related to debt activities

Adjusted EBITDA

$ 328

$ 277

$ 249

$ 240

$ 236

Adjusted EBITDA margin

27.3%

25.7%

24.1%

24.3%

24.7%

25.2%

Debt principal outstanding as of March 31, 2026

$ 4,134

Cash and cash equivalents as of March 31, 2026

569

Net debt as of March 31, 2026

$ 3,565

Adjusted EBITDA for the trailing twelve months ended March 31, 2026

$ 1,006

Net leverage ratio at March 31, 2026

3.5x

in millions, except percentages and net leverage ratio

Q1'26 Q4'25

Net cash provided by operating activities

$ 53 $

142

Purchases of property, plant and equipment (25) (51)

Free cash flow $ 29 $ 91

Q1'26

Q4'25

Free cash flow

$ 29

$ 91

Cash paid for interest

Tax effect on cash paid for interest1

(5)

(10)

Unlevered free cash flow $ 46 $ 131

1Tax effect of cash paid for interest was calculated at the US Federal Statutory rate of 21% in millions

Q1'26 Q4'25

(Benefit)

Income Before

Provision for

Effective Tax

Income Before

Provision for

Effective Tax

Income Tax

Income Taxes

Rate

Income Tax

Income Taxes

Rate

GAAP

$ 102

$ 18

17.7%

$ 89

$ (19)

-20.8%

Restructuring and other

- 11

Legal Settlement

- -

Amortization of intangible assets

- 62

Loss on extinguishment of debt

- 2

Amortization of debt issuance costs

- 5

Loss from de-designation of interest rate hedges

- -

Fees and expenses related to debt activities

- -

Tax effect of Non-GAAP adjustments - 23 - 20

Non-GAAP

$ 198 $ 41

20.9%

$ 169 $ 1

0.9%

Q1'25 Q2'26E

Income Before

Provision for

Effective Tax

Income Before

Provision for

Effective Tax

Income Tax

Income Taxes

Rate

Income Tax

Income Taxes

Rate

GAAP

$ 59

$ 7

12.3%

$ 186

$ 35

18.8%

Restructuring and other

- 1

Amortization of intangible assets

- 61

Loss on extinguishment of debt

- 3

Amortization of debt issuance costs

- 3

Fees and expenses related to debt activities

- -

Tax effect of Non-GAAP adjustments - 22 - 17

Non-GAAP

$ 145 $ 29

19.9%

$ 254 $ 52

20.3%

in millions, except percentages

Non-GAAP financial measures adjust GAAP financial measures for the items listed below. These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, MKS' reported GAAP results, and may be different from Non-GAAP financial measures used by other companies. In addition, these Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. MKS management believes the presentation of these Non-GAAP financial measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. Totals presented may not sum and percentages may not recalculate using figures presented due to rounding.

Restructuring and other includes incremental expenses incurred in connection with restructuring programs and other strategic initiatives, primarily related to changes in business and/or cost structure. Such costs may include third-party services, one-time termination benefits, facility-related costs, contract termination fees and other items that have no direct correlation to our future business operations.

Legal settlement includes charges related to the resolution of legal matters.

Amortization of intangible assets includes non-cash amortization expense associated with intangible assets acquired in acquisitions.

Loss on extinguishment of debt includes the non-cash write-off of unamortized debt issuance costs and original issue discount costs incurred from voluntary prepayments, refinancings and/or repricings of our term loan facility.

Amortization of debt issuance costs includes non-cash additional interest expense related to the amortization of debt issuance costs associated with our term loan facility.

Loss from de-designation of interest rate hedges includes a cash loss from the de-designation of certain interest rate hedges in connection with the voluntary prepayment of the USD term loan B.

Fees and expenses related to debt activities includes direct third-party costs related to repricings or refinancings of our term loan facility and the issuance of our €1.0 billion of senior

notes due 2034 in February 2026.

Convertible debt capped calls includes the antidilutive impact of the capped call transactions entered into in connection with the issuance of $1.4 billion of convertible senior notes in May 2024. The capped calls are designed to reduce potential dilution to the Company's common stock and/or offset cash payments in excess of the principal upon conversion of the notes, subject to a cap of $237.42 per share (a 100% premium to the May 13, 2024 closing price of $118.71), subject to customary adjustments. Because the capped calls are excluded from GAAP diluted share calculations, GAAP and Non-GAAP diluted share counts will differ.

Tax effect of Non-GAAP adjustments includes the impact of Non-GAAP adjustments that are tax effected at applicable statutory rates resulting in a difference between the GAAP and Non-GAAP tax rates.

Disclaimer

MKS Inc. published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2026 at 12:42 UTC.