Entegris (ENTG) Q1 2026 Earnings Call — April 30, 2026

Source: Motley Fool transcript (published Apr 30, 2026) + Entegris Q1 2026 press release.

David Reeder (CEO): Thanks, Jeff, and good morning. The first quarter was a solid start to the year as we continue to execute with focus and discipline against the constructive and improving semiconductor industry environment. Revenue increased 5%, slightly above the midpoint of our range, while most other metrics, including adjusted gross margin, EBITDA margin and non-GAAP EPS, all exceeded our guidance range.

Total revenue increased 5% in the first quarter as compared to the prior year, driven by a 7% increase in our APS segment and a 3% improvement in MS. Our unit-driven revenue, which is correlated to MSI, increased approximately 7% year over year, driven by growth in liquid filtration, advanced deposition and selective etch. We're pleased to see the continued growth in liquid filtration, which posted its third consecutive record quarter. CapEx-driven revenue decreased modestly year over year in the first quarter. Given our current bookings patterns, we expect 2026 CapEx revenue to increase throughout the remainder of the year.

We now expect mid- to high single-digit industry MSI growth for the remainder of 2026, which correlates to approximately 75% of our business. The outlook for fab spending is also improving. We're also continuing our efforts to optimize our manufacturing network. We closed another subscale facility during the quarter in Chandler, Arizona.

Free cash flow was also a highlight for the quarter. We delivered $144 million of free cash flow, approximately 18% of sales. This enabled us to accelerate our deleveraging as we repaid approximately $50 million of our term loan in the quarter. We now expect to reduce net leverage to approximately 3x by the end of 2026.

Following a rigorous search process, Sukhi Nagesh has been appointed as our new Chief Financial Officer, effective May 18. His engineering background, significant semiconductor industry experience, deep financial expertise and strong operational discipline make him the ideal CFO for Entegris.

Jeffrey Schnell (VP IR / interim CFO): Q1 sales were $812 million, an increase of 5% year over year and above the midpoint of our guidance range. Gross margin on a GAAP and non-GAAP basis was 46.9%, above the high end of our guidance range, including approximately 50 basis points of one-time items. Adjusted EBITDA in Q1 was $226 million, or 27.8% of revenue, also above our guidance range. GAAP diluted EPS was $0.60 per share, and non-GAAP EPS was $0.86 per share, which exceeded our guidance range.

Material Solutions delivered Q1 sales of $351 million, up approximately 3% year over year. Advanced Purity Solutions delivered Q1 sales of $464 million, up approximately 7% year over year, with the third consecutive record quarter in liquid filtration and a 3-year revenue high in FOUPs.

Free cash flow in the first quarter was strong at $144 million, a margin of 18%. During the first quarter, we reduced our term loan by $50 million. At quarter end, our net debt was $3.3 billion and net leverage was 3.6x.

For the second quarter, we expect sales of $815 million to $845 million, a year-over-year increase of approximately 5% at the midpoint. Gross margin is expected between 46.25% and 47.25%, more than 200 basis points of improvement year over year. We expect non-GAAP EPS between $0.76 and $0.84. We also expect third-quarter revenue to grow by approximately 5% from the midpoint of the second quarter's guidance range.

Q&A Highlights (condensed from full transcript)

• Q (Melissa Weathers, Deutsche Bank): Non-AI markets and CapEx? A: Mainstream is mixed — memory availability/pricing pressures consumer products, offset by power management/data center strength; utilization 75-80%; CapEx-driven business = ~25% of revenue (1/3 WFE, 2/3 fab construction), with 3 waves of demand (construction → WFE → units).
• Q (Elizabeth Sun, Citi): GM path? A: Sustained structural GM expansion: Q1 46.9% incl. ~50 bps one-time (normalized 46.4%, +240 bps QoQ — 100 bps useful-life, 140 bps productivity); Q2 midpoint 46.75%.
• Q (Timothy Arcuri, UBS): GM puts/takes? A: KSP breakeven around end of year, less dilutive in '27; Colorado all-qualification this year, ramping early '27; China modestly down in Q1 (CapEx timing), Taiwan +18% YoY.
• Q (Bhavesh Lodaya, BMO): CapEx-driven margins and raw materials? A: ~$1B incremental upside from the network; incremental volume drives fixed-cost absorption; polymer/chemical feedstock inflation mostly as expected, some Middle East conflict pressure (noble gases, resins) absorbed for now.
• Q (Jim Schneider, Goldman): What changed since February? A: Fab construction outlook went from low single digits to high single digits; MSI raised from low-to-mid to mid-to-high single digits; mainstream roughly as expected.
• Q (Charles Shi, Needham): Advanced packaging? A: Advanced packaging revenue >$100M run rate (flow control, copper plating delivery, CMP for HBM/TSV, carriers); more details at Investor Day in November.
• Q (John Roberts, Mizuho): China qualification? A: ~85% of China revenue in-region; moving to ~90% by end of 2026; will likely never reach 100%.