Entegris (ENTG) Q2 Revenue Up

Key Points

• Entegris (NASDAQ:ENTG) exceeded analyst estimates for both GAAP revenue and Non-GAAP EPS in Q2 2025, with GAAP revenue of $792.4 million and Non-GAAP EPS of $0.66.

• As tariff impacts and subdued semiconductor fab activity weighed on profitability, especially in the Advanced Purity Solutions segment.

• Q3 2025 GAAP revenue is expected to be between $780 million and $820 million,and Non-GAAP EPS is projected at $0.68–$0.75.

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Entegris (NASDAQ:ENTG), a key supplier of materials and purity solutions to the semiconductor industry, released its second-quarter 2025 financial results on July 30, 2025. The headline news: Entegris reported GAAP revenue of $792.4 million, beating the consensus estimate of $765.4 million, and Non-GAAP earnings per share (EPS) of $0.66, above the projected $0.64. Despite a 2.5% year-over-year decline in GAAP revenue, the company managed to outpace its own guidance. However, Profitability measures showed contraction, with margins down in the Advanced Purity Solutions segment, while Materials Solutions saw margin expansion. Management pointed to tariff impacts and continued softness in semiconductor capital spending. The quarter’s results highlight resilient demand for advanced semiconductor materials, but also ongoing challenges related to global trade policies and capacity ramp costs.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Strategic Focus

Entegris manufactures and supplies advanced materials and contamination control solutions used in semiconductor manufacturing. Its products are critical at multiple steps of chip fabrication, including deposition, etching, and cleaning. The company’s offerings include consumable materials for chemical mechanical planarization (CMP) slurries, which polish wafers, deposition materials for advanced node manufacturing, and purity solutions like filters and specialty packaging.

The business focuses on key trends: semiconductor device miniaturization, rising demands for purity, expanding its product portfolio, and building out regional manufacturing capabilities. It aims to help customers meet strict yield and performance standards while managing risks from geopolitical shifts and supply-chain complexity. Entegris’ recent priorities include ramping new facilities in Taiwan and Colorado Springs and strengthening collaborations with semiconductor manufacturers, ensuring its solutions remain embedded in critical chip processes.

Quarter in Detail: Revenue, Segments, and Key Developments

Entegris delivered GAAP net sales of $792.4 million, exceeding its management guidance range of $735 million to $775 million and beating analyst expectations by $27.0 million. Non-GAAP EPS of $0.66 also exceeded forecasts. This outperformance was driven by robust demand in its Materials Solutions segment, which posted GAAP revenue of $354.9 million, up 3.7% compared to Q2 2024. Key products such as CMP consumables and deposition materials, vital for advanced-node chip manufacturing, continued to see healthy customer uptake.

The Advanced Purity Solutions segment recorded GAAP revenue of $439.9 million, representing a decline of 6.9% compared to Q2 2024. This segment provides high-performance filtration and contamination control products needed for ultra-clean production environments. While micro-contamination control solutions remained strong, spending cuts on capital equipment by chipmakers—especially around fluid handling products—dampened overall segment results. Management highlighted lingering trade policy uncertainty and slow fab construction as headwinds here.

Gross margin, adjusted operating margin, and adjusted EBITDA margin declined compared to Q2 2024. Adjusted operating margin declined by 1.1 percentage points year-over-year, pressured by U.S.–China tariffs, inefficiencies tied to new facility ramps, and elevated costs. Gross margin (GAAP) and adjusted EBITDA margin saw similar contractions. Tariffs imposed by China on U.S.-origin goods triggered as much as $50 million in revenue to be put on hold, but management expects much of this will be recoverable as customers qualify shipments from alternate manufacturing sites in Asia.

One-offs and strategic investments were notable during the period. Facility qualification work in Kaohsiung, Taiwan, is progressing toward an expected annualized run rate above $120 million by late 2025, compared to just over $15 million in 2024. Entegris also secured $9 million in milestone funding under the U.S. CHIPS and Science Act for its Colorado Springs expansion. Cost-saving actions continued, with approximately 75% of annualized savings from its Advanced Purity Solutions division reorganization retained.

The company declared a quarterly dividend payment totaling $15.2 million. This level was unchanged from the prior quarter.

Financial Position and Product Family Updates

Balance sheet metrics reflect ongoing investment. Inventory (GAAP) increased to $694.6 million, up from $638.1 million at FY2024 year-end. Capital expenditures totaled $66.5 million, reflecting both facility expansion and equipment purchases. Net debt at quarter end stood at approximately $3.7 billion; no maturities are due until 2028. Operating cash flow (GAAP) reached $113.5 million.

Within product families, CMP consumables—used to smooth and flatten silicon wafers—remain a growth driver, with CMP slurries and pads delivering nearly 20% year-on-year growth as demand for advanced packaging and new logic nodes accelerates. Deposition materials like molybdenum films, used for next-generation chip architectures, are increasingly specified by major customers. Advanced filter products for high bandwidth memory (HBM) and logic applications continue to gain traction, with recent process-of-record (POR) wins supporting content growth per wafer. Management cited deepening customer integration, with Entegris’ solutions embedded in core chip manufacturing workflows.

Outlook and What to Watch

For Q3 2025, management guided GAAP net sales of $780 million to $820 million, with Non-GAAP diluted EPS expected in the $0.68 to $0.75 range. Adjusted EBITDA margin is projected near 27.5%. Sequential improvement is anticipated in the second half of 2025 as tariff effects are increasingly addressed through alternate Asian production and as advanced semiconductor node transitions gather momentum. Gross leverage remains elevated, but debt maturities are well-structured.

No full-year financial guidance was provided, reflecting ongoing uncertainty in trade policies and semiconductor capital spending. Management remains focused on regional manufacturing expansion, navigating tariffs, and capturing upside from secular industry trends—including advanced packaging and the proliferation of AI-ready semiconductors.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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