MKS (MKSI) Q4 2025 earnings summary

Executive summary

• Achieved FY 2025 revenue of $3.931B, 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.

• Entering 2026 with strengthening demand 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; Q4 net earnings: $168M, or $2.47 per diluted share, above guidance midpoint.

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

• FY 2025 free cash flow: $497M, up 21% year-over-year; adjusted EBITDA: $966M (24.6% margin).

• Year-end liquidity: $1.4B (cash and equivalents: $675M; undrawn revolver: $675M).

• Q4 2025 non-GAAP operating margin: 21.0%; net leverage ratio improved to 3.7x.

Outlook and guidance

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

• Q1 2026 gross margin expected at 46% ±100 bps; Q1 adjusted EBITDA: $251M ±$24M; Q1 net EPS: $2.00 ±$0.28.

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

• CapEx to average 4%-5% of revenue through 2026.

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