Entegris’ second quarter saw revenue and non-GAAP profit come in ahead of Wall Street expectations, but the market responded negatively due to ongoing margin pressures and a cautious industry outlook. Management cited robust performance in its Materials Solutions division, particularly in CMP slurries and pads, as well as early benefits from node transitions in logic and 3D NAND. However, the company faced headwinds in its Advanced Purity Solutions segment, where sales declined year-on-year due to reduced capital spending by semiconductor customers. CEO Bertrand Loy noted that operational inefficiencies and the impact of tariffs contributed to lower operating margins, emphasizing the complexity of managing production and inventory amid shifting trade policies.
Is now the time to buy ENTG? Find out in our full research report (it’s free).
Entegris (ENTG) Q2 CY2025 Highlights:
- Revenue: $792.4 million vs analyst estimates of $763.3 million (2.5% year-on-year decline, 3.8% beat)
- Adjusted EPS: $0.66 vs analyst estimates of $0.64 (3.1% beat)
- Adjusted EBITDA: $216.7 million vs analyst estimates of $214.2 million (27.3% margin, 1.2% beat)
- Revenue Guidance for Q3 CY2025 is $800 million at the midpoint, below analyst estimates of $804.4 million
- Adjusted EPS guidance for Q3 CY2025 is $0.72 at the midpoint, below analyst estimates of $0.74
- Operating Margin: 13.4%, down from 16% in the same quarter last year
- Inventory Days Outstanding: 144, down from 147 in the previous quarter
- Market Capitalization: $10.92 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Entegris’s Q2 Earnings Call
- Melissa Weathers (Deutsche Bank) asked about Entegris’ views on the semiconductor cycle and where the company sees itself in the recovery. CEO Bertrand Loy explained that fab utilization remains in the mid-80% range and expects only modest wafer start growth for the full year.
- Bhavesh Lodaya (BMO) pressed for more detail on the company’s revenue guidance scenarios, specifically the impact of tariffs and industry volumes. Loy replied that guidance was cautious due to ongoing tariff uncertainty and erratic customer buying behavior.
- James Schneider (Goldman Sachs) requested clarity on the timeline for margin pressures to abate as new facilities ramp. CFO Linda LaGorga said inefficiencies would continue in the near term, but volume growth and site ramp-ups should drive longer-term margin improvement.
- Yu Shi (Needham) questioned the company’s outlook for the fourth quarter amid macro uncertainty and compared Entegris’ views to more optimistic analog semiconductor peers. Loy acknowledged the disconnect, noting some customers still have elevated inventory and broad-based demand recovery is slow.
- Timothy Arcuri (UBS) followed up on the China remediation process and gross margin headwinds, confirming most China-related revenue had recovered but margin inefficiencies from the supply chain transition persist. LaGorga reiterated the balance between inventory reduction and margin management.
Catalysts in Upcoming Quarters
Looking forward, our analysts will be monitoring (1) the pace and efficiency of production ramp at new Taiwan and Colorado facilities, (2) progress on shifting more Asian demand to local manufacturing sites to reduce supply chain risk, and (3) any developments in trade policy or tariffs that could impact customer ordering patterns or profitability. The resolution of inventory management initiatives and signs of recovery in mainstream semiconductor markets will also be key for tracking Entegris’ execution.
Entegris currently trades at $72.03, down from $93.04 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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