MKS Instruments (MKSI) investor relations material

Financial performance and operational highlights

• Achieved $473M in top-line revenue, the highest in eight quarters, with strong performance in semiconductor and electronics/packaging segments.

• Gross margin reached 46.6%, impacted by tariffs; would have been close to 48% without them.

• Cash flow was 14% of revenue, and OpEx remained at the low end of guidance, reflecting ongoing cost structure improvements.

• Continued progress on deleveraging, with $200M in debt prepaid in the last two months.

• Maintained 47%+ gross margin for seven to eight quarters, with recent dip attributed to tariffs.

Market trends and business strategy

• Outperformed the WFE market with 18% year-over-year growth in the first half, compared to WFE's 5%.

• Benefiting from NAND upgrades and a broad portfolio strategy, enabling outperformance of WFE by 200 basis points annually for a decade.

• Anticipates future growth from increased etch depth requirements and foundational roles in lithography, metrology, and inspection.

• Strong market share in advanced packaging and critical subsystems for vertical chip structures.

• AI-driven demand is boosting all PCB segments, from advanced to lower technology boards.

Technology and product innovation

• Longstanding expertise in atomic layer deposition (ALD) and dissolved gas cleaning for advanced nodes, with increasing market share.

• Significant growth in lithography, metrology, and inspection optics, doubling subsegment revenue to $300M over five years.

• Ongoing development in advanced packaging technologies, including COWOS, CoPOS, and glass substrates.

• High market share in chemistry for equipment, with consumables providing sustained high-margin revenue.

• Investments in manufacturing excellence, procurement, and design improvements to drive future margin expansion.