MKS (MKSI) Q4 2025 earnings summary

Executive summary

• Achieved FY 2025 revenue of $3.9B, up 10% year-over-year, with strong double-digit growth in semiconductor and electronics & packaging markets and robust free cash flow and EPS growth.

• Q4 2025 revenue reached $1.03B, exceeding guidance, with strong performance across all end markets and margin flow-through.

• Maintained robust gross margins despite trade policy headwinds and continued to invest in business growth and deleveraging.

• Demand outlook for 2026 is strengthening, especially in semiconductor and electronics/packaging, supported by ambitious CapEx plans and AI-driven applications.

• Strong cash flow enabled proactive investments, debt prepayments, and refinancing activities to strengthen the balance sheet.

Financial highlights

• Q4 2025 revenue: $1.03B, up 5% sequentially and 10% year-over-year; full-year revenue: $3.9B, up 10% year-over-year.

• Q4 2025 net earnings: $168M non-GAAP ($2.47 per diluted share); Q4 operating income: $217M (21% margin); Q4 adjusted EBITDA: $249M (24.1% margin).

• Q4 2025 gross margin: 46.4%, above guidance midpoint; full-year gross margin: 46.7%, down 90 bps year-over-year due to tariffs and product mix.

• FY 2025 free cash flow: $497M, up 21% year-over-year; operating cash flow: $645M, up $117M year-over-year.

• Q4 2025 cash and equivalents: $675M; total liquidity ~$1.4B including undrawn credit facility.

Outlook and guidance

• Q1 2026 revenue expected at $1.04B ±$40M; semiconductor $450M ±$15M; electronics/packaging $305M ±$15M; specialty industrial $285M ±$10M.

• Q1 2026 gross margin estimated at 46% ±100 bps; adjusted EBITDA of $251M ±$24M; net earnings per diluted share expected at $2 ±$0.28.

• Q1 2026 tax rate at ~21%, full-year tax rate expected at 18%-20%; annual interest expense to decrease by ~$27M after refinancing.

• Operating expenses expected to grow slower than revenue in 2026.

• Guidance reflects ongoing impact of tariffs and global trade actions.