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Entegris, Inc. Stock Price: Quote, Forecast, Splits & News (ENTG)

Finance

Company Profile

New

Entegris, Inc. Price & Performance (ENTG)

Stock Performance

Updated Mar 14, 8:00 PM UTC

ENTG:NASDAQ

$98.37USD

4.18% · $3.95

After Hours

-0.79% · $0.78

Open

$96.36

High

$99.14

Low

$96.14

Market Cap

$14.87B

P/E Ratio

51.0

Volume

1.93M

Year High

$147.57

Year Low

$92.84

Dividend Yield

0.41%

News & Market Insights

Ingevity Announces New CEO with Proven Leadership
Mar 10, 2025
Ingevity Corporation has appointed David H. Li as its new president and CEO, effective April 7, 2025. Li, with over 25 years in the specialty materials industry, is expected to drive strategic growth. He succeeds interim CEO Luis Fernandez-Moreno, who will remain on the board.1
Entegris Stock Sees Mixed Movement Amid Analyst Adjustments
today
Shares of Entegris, Inc. have experienced fluctuations, with analysts revising price targets. Despite a recent dip, the stock remains rated as a "Moderate Buy" by most analysts, with a consensus target price of $124.88. Insiders have also engaged in notable stock transactions.234
Semiconductor Growth Fuels Optimism for Entegris
Mar 2, 2025
Entegris continues to benefit from the semiconductor industry's evolution, with demand for advanced materials driving its performance. Analysts predict accelerated growth in 2025-2026 due to new technologies and materials. The company’s defensive revenue model positions it well for sustained success.56

What's Happening

Peers

Earnings

Report Date

Feb 6, 2025

Reported Revenue

849.8M

Avg 1d Change

5.43%

Report Period

Q4 2024

Reported EPS

0.84

Implied Move 1d

9.65%

Transcript

10m 49s

Good morning, everyone, Earlier today, we announced the financial results for our fourth quarter of twenty twenty four, Before we begin, I would like to remind listeners that our comments today will include some forward looking statements. These statements involve a number of risks and uncertainties, and actual results could differ materially from those projected in the forward looking statements. Additional information regarding these and uncertainties is contained in our most recent annual report and subsequent quarterly reports that we have filed with the SEC. Please refer to the information on the disclaimer slide in the presentation. On this call, we will also refer to non GAAP financial measures as defined by the SEC and Regulation G. You can find reconciliation tables in today's news release, as well as on the IR page of our website at etegris.com. As we referenced in last quarter's call, we have combined our MC and AMH divisions. The name of the new division is Advanced Purity Solutions or APS. To assist you in your modeling, we have provided in the appendix of the earnings slides recast financials for this new division going back eight quarters. On the call today are Bertrand Louaf, our CEO and Linda LeGorga, our CFO.

12m 9s

With that, I'll hand the call over to Bertrand.

12m 12s

Thank you, Bill, and good morning.

12m 15s

I am pleased that we were able to cap off 2024 with strong performance.

12m 21s

In the fourth quarter, our revenue excluding divestitures grew 11% year on year and was above our guidance range. This performance was driven by the highest quarterly sales for Materials Solutions in over two years and all time high quarterly sales for Advanced Purity Solutions. Profitability was also solid in the quarter. Gross margin and EBITDA margin were within guidance. And non GAAP EPS was above our guidance. Looking at the full year, our semiconductor customers with significant exposure to advanced logic and AI performed very well. But the rest of the industry remained weak throughout 2024. Addition, there were no significant node transitions in logic or memory, which limited our opportunity to further increase our content per wafer. With this industry backdrop, I am very pleased with our overall results. During the year, excluding divestitures and the impact of currency, our revenue grew more than 5%, yielding an estimated market out performance of three to four points. Sales of our Materials Solutions divisions were up 11% for the year, excluding divestitures. For MS, growth was particularly strong in CMP consumables advanced deposition materials and selective etching chemistries. For additional context, I would like to highlight that last year CMP slurry revenue grew 14% and CMP pads grew 24%.

14m 10s

We are also encouraged by new critical POR positions, including more than doubling our slurry content from N3 to N2. This performance is a testament to the great work the team has done since our There's still more to be done to harvest the full benefits of the CMC deal, but the team is making excellent progress. Advanced Purity Solutions division sales were flat in 2024, driven by difficult comparisons from the significant backlog we were working through during 2023. And mirroring the performance of the overall semi market Strong growth in advanced logic and advanced packaging for EPS was offset by weakness in mainstream and memory. However, APS ended the year strong as expected with sequential growth in most product areas. Moving back to our consolidated results, From a profitability point of view, both our gross margin [indiscernible] Our EBITDA margin expanded more than 100 basis points year on year to reach 28.7%, slightly above our target commitment. We were able to improve our bottom line leverage while increasing our R and D investments by 14% in 2024. These investments are critical to winning new POR positions, such as Moly Deposition, Moly Edge in next generation three d NAND and point of use photoresist filters in advanced logic.

15m 55s

These new POR wins drive the increase of Entegris content per wafer [indiscernible] ultimately fuel our top line market outperformance. There are a few additional items I would like to highlight. Last year, we paid down almost $625,000,000 of debt, a portion of that coming from the proceeds of the divestiture of the pipeline and industrial materials business in early March twenty twenty four. Debt reduction will continue to be a focus area for us in 2025, and Linda will expand on that shortly. Our new facility in Kaohsiung, Taiwan continues to make progress. We have completed qualifications for products including drums, tubing, deposition materials and some liquid filters. We expect to complete most of the remaining critical product qualifications by the end of this year. Related to that, in December, we finalized an agreement with the U. S. Department of Commerce provides us up to $77,000,000 in funding under the Chips and Science Act. Tools have started to move into the facility and we expect to initiate the second half of this year. Moving on to 2025. As we enter the year, we have yet to see evidence of a significant semi market rebound. And our customers' visibility outside of advanced logic and AI driven applications continues to be limited.

17m 41s

In that context, for the full year 2025, we expect the market Based on our unit and CapEx mix, will be up between 13%. We believe that this is a prudent view of the industry at this point in the year. Until we see concrete evidence of a sustained market recovery across major end markets. On top of this industry growth, we by four to five points in 2025. This outperformance will be largely driven by additional content opportunities in new logic and memory nodes. This outperformance also includes the negative impact of the latest restrictions on sales to China, which which we estimate to be an annual incremental loss of revenue of $30,000,000 to $40,000,000 in 2025. [indiscernible] Putting it all together, we expect our sales in 2025 will be approximately $3,400,000,000 at the midpoint of our guidance range up approximately 6.5% on a pro form a basis.

18m 56s

We expect EBITDA will be slightly above our target model or just over 29% of revenue and we expect non GAAP EPS to be or above $3.25 Let me now turn the call over to Linda. Linda? Good morning and thank you, Bertrand.

19m 18s

Our sales in the fourth quarter of $850,000,000 were up approximately 11% year over year, excluding the impact of divestitures. On an as reported basis, our sales were up approximately 5% year over year and sequentially. Foreign exchange negatively impacted revenue by $4,000,000 year over year and negatively impacted revenue by $2,000,000 sequentially in Q4. On a full year basis, FX negatively impacted revenue by $23,000,000 reducing our 2024 sales growth by almost one point. Gross margin on a GAAP and non GAAP basis was 45.6% in the fourth quarter. Within our guidance range. Operating expenses on a GAAP basis were $237,000,000 in Q4. Operating expenses on a non GAAP basis in Q4 were $188,000,000 in line with our guidance.

20m 28s

Adjusted EBITDA in Q4 was 29.2% of revenue, also in line with our guidance. The GAAP tax rate in Q4 was approximately 9% and the non GAAP tax rate was 12%.

20m 43s

The lower than expected tax rate was driven by favorable income mix. GAAP diluted EPS was $0.67 per share in the fourth quarter.

20m 53s

Non GAAP EPS was $0.84 per share, above our guidance range. Sales for our Material Solutions division in Q4 were $361,000,000 up 14% year on year. Excluding the impact of divestitures. Sales were up 4% sequentially. Both year on year and sequentially were CMP consumables, advanced deposition materials and etching chemistries. Adjusted operating margin for MS was 21.7% for the quarter. The 100 basis point sequential margin increase was driven by operating expense leverage.

21m 36s

Sales for the new Advanced Purity Solutions division in Q4 were $491,000,000 up 9% year on year and up 6% sequentially. From a product perspective, the year on year sales wafer handling and gas purification. The sequential sales increase was driven by growth in liquid and gas filters and dispense pumps used in advanced packaging applications. Adjusted operating margin for APS was 27.9% for the quarter. The modest sequential increase in margin was primarily driven by volume leverage.

22m 17s

Moving on to cash flow. CapEx for the year was $316,000,000 in line with our expectations and was approximately 10% of sales. We expect to spend approximately $325,000,000 in total CapEx in 2025. In line with our ongoing target of approximately 10% of sales. Full year free cash flow was also $3,000,000 and free cash flow margin was almost 10% in 2024. This is a significant improvement relative to the last few years, which were negatively impacted by the industry downturn and higher CapEx spending from our KSP and Colorado investments. We are committed to improving our free cash flow margin. We have actually made free cash flow a compensable goal for We expect our free cash flow margin to return to the mid to high teens percent in the next few years, similar to our pre pandemic levels.

23m 25s

This will be driven by EBITDA leverage in line with our target model and working capital optimization. Looking at our capital structure. During the fourth quarter, we paid down $150,000,000 of the term loan from cash on hand which means to date, we have paid down $2,000,000,000 of our total debt since the close of the CMC acquisition in July 2022. At the end of the year, our gross debt was and our net debt was approximately $3,700,000,000 Gross leverage was 4.3x and net leverage was 4x. The blended interest rate on our debt portfolio is approximately 4.9 And since the term loan is fully hedged, currently 100% of our debt is fixed.

24m 19s

We will continue to use our free cash flow to pay down debt and we remain committed to reducing our leverage. Based on the timing of our cash flows, including CapEx, our debt repayment will be weighted to the second half of twenty twenty five. We expect to meet our gross leverage commitment of below four times before the end of the year. Moving on to our Q1 outlook. We expect sales to range from $775,000,000 to $8.00 $5,000,000 This equates to year on year revenue growth of approximately 7% to the midpoint, excluding divestitures. Gross margin of 45.5% to 46.5% both on a GAAP and non GAAP basis. GAAP operating expenses of $236,000,000 to $240,000,000 We expect the EBITDA margin to range from 28% to 29%. Net interest expense of approximately $50,000,000 non GAAP tax rate of approximately 15% GAAP EPS to be $0.38 to $0.45 per share and non GAAP EPS to be $0.64 to $0.71 per share. We also expect depreciation to be approximately 0.53 And in addition to the annual outlook Bertrand shared, I'd like to provide a few additional modeling items for the full year '20 We expect net interest expense will be And we also expect the non GAAP tax rate to be approximately 15% for 2025.

26m 26s

I'll now hand it back over to Bertrand for some closing remarks. Thank you, Linda.

26m 33s

In closing, in this dynamic industry environment, I am very proud of our team's resilience, steady execution, and the strong quarter we ended the year on. As we enter 2025, I believe we have taken an appropriately prudent view of the industry given the continued lack of visibility outside of advanced logic and AI applications? We remain focused on delivering strong market out performance and profitability, improving free cash flow and paying down our debt. While funding critical investments that improve our long term competitiveness and position us for the upturn. Looking further out, we continue to have high confidence in the strong long term growth outlook of the semiconductor industry. Complex device architectures and further miniaturization. Resulting process complexity is making our expertise in material science and materials purity increasingly valuable [indiscernible] are positioning us very well for the upcoming technology node transition. All of which are expected to generate incremental content per wafer opportunities and fuel our market outperformance in the years to come. Before we open the line for questions, I would like to announce that Bill Seymour, our VP of IRN Communications, recently announced his decision to leave Entegris to pursue a new opportunity at the end of Q1.

28m 18s

Would like to take a moment to recognize Bill the quality of his work and his invaluable advice over the past Linda and I will miss him greatly. With that, operator, let's open the line for questions.

28m 35s

The floor is now open for questions. Our first question is coming from Toshiya Hari with Goldman Sachs. Your line is open.

29m 11s

Hi, good morning. Thank you so much for for taking the question and thank you Bill for all help over the past several years. My first question is on the market outlook and your I was hoping you could delineate between the wafer start side of the house and the CapEx side of the house what you're thinking? And if you can sort of provide a little bit of of color by application? That would be really helpful. And then the outperformance of four to five percentage points in the past, I think you've talked extensively about N2 and molybdenum. I'm curious what the key drivers are for you guys in '25? [indiscernible] Sure. So when it comes to the the market assumptions for 2025, as we said in the in our comments, visibility continues to be fairly limited. Outside of advanced logic and AI related applications. So as we start the year and without any concrete evidence of a rebound across the industry, we think it's prudent to assume wafer start being up in the low single digit and the industry CapEx to be essentially flat. Right? So if I want to double click on those two components, Wafer start low single digit.

30m 40s

We expect obviously very strong wafer starts in Advanced Logic. And everything that is AI related. But as of right now, as I mentioned, I think there is very limited visibility in mainstream and traditional memory. So that's we are behind that's what's behind the the wafer start assumption. When it comes to CapEx, Probably no surprise to you, we expect elevated WFE in advanced foundry and advanced packaging We expect increased spend in NAND ahead of some [indiscernible] slow WFE pretty much everywhere else. Then slower new fab construction projects in in 2025. So when it comes to the outperformance, as you know well, Toshiya, the performance, the outperformance of Entegris is really driven by how many nodes or [indiscernible] place in any given year of course the more the better. And the other big driver is the timing. Of those node transitions. So in other words, when those nodes are already put in high volume manufacturing and for us, the sooner, the better, right? So when you look at 2025, the good news is that we expect a lot of important node transitions. In Logic, we're going to be obviously watching carefully N2, 18A, And then in three d NAND, we expect to see the adoption of Moly as a replacement to Tungsten in 300 plus layer devices.

32m 22s

Now so that's those are the important node transitions that we will be watching. And then if you think about that from a timing point of view, all of those transitions are really expected in the second half of the year. So it's good, But Not as good as if they were happening in the first half the year, obviously. Other words, we're not getting the full benefit of those transitions in 2025. The other final point maybe on the outperformance is, as I mentioned in my my comments, remember that one point of top line growth is expected to be taken away by the recent China restrictions. So that's the context for the the overall top line outperformance in 2025 of 4% to five points. And just to be clear, our long term outperformment goal remains 3% to 6% as we have times before.

33m 24s

Great. That's really clear and really helpful. Thank you. My follow-up, maybe one for Linda. Interesting comments around working capital optimization and sort of your aspiration or goal to to improve free cash flow margins to sort of the mid to high teens I was hoping you could sort of expand on what the key initiatives are internally You gave guidance for CapEx for calendar twenty five, but how we be thinking about CapEx perhaps in 2026 and beyond and again, is it primarily inventory when you speak to working capital improvements or is there something else going on? Thank you.

34m 3s

Absolutely. Thanks for that question, Toshiya. I'm very excited in free cash flow is going to be a very high priority as I discussed during the call. And as I mentioned, it will be a compensable goal for the team. We've really made a lot of progress in 2024 with the 10% outcome for free cash flow margin. And think about it, it's a very significant improvement over 2023 being about 05/2022 being negative. So to address your points, CapEx we still over time think of it as about 10%. So that would be somewhat stable. Therefore, the drivers are going to be that EBITDA leverage as we get that growth in the mark cap. So clearly inventory can have the biggest impact The team did a good job again this year with some in improvement in our days on hand and we're going to continue to drive that. We also made some improvement on the other metrics like payables. So overall, we're going to just keep optimizing our work cap overall and levels over the next several years.

35m 25s

Thank you.

35m 28s

Thank you. We'll take our next question from Melissa Weathers with Deutsche Bank. Your line is open. Hi there. Thank you for letting me ask a question. Bill, best of luck on your new endeavors. I guess for my first question, can we dig a little bit deeper into the March guidance? Now only have two segments, but are there any moving pieces that we should be contemplating? It seems like it's a little bit below what you've seen historically. In that quarter. So any moving pieces within the segments for March would be helpful.

36m 7s

So I can certainly start and describe a little bit about the drivers behind the top line. I think we think we view our our guidance at the midpoint to be pretty much in line with [indiscernible] seasonal market decline. I mean, we expect sequential decline in wafer starts, frankly, across all customer segments. In Q1. We also expect a fairly slow start to CapEx in the first quarter of the year. So and we expect that to frankly impact most of our product lines in our two divisions. So I think we think that our guidance is pretty much in line with normal seasonality. And if you look at it against Q1 of last year, it's actually up 7%. So it's in line with the overall growth target that we have for the year.

37m 8s

Thanks for that. And then I wanted to call out one thing that you mentioned in your slides and in your prepared remarks, some momentum in the advanced packaging side of things. You haven't spent too much time focusing on this part of the business and I know it's strong grower for the industry right now. So could you give us a little bit of color on how you're supporting that industry? What trends you're seeing and maybe how much could grow this year?

37m 32s

Well, thanks for asking that flow on question, Melissa. I was hoping somebody would. And certainly, as we've been mentioning or the last two years, Advanced Packaging has been historically a very, very small part of our portfolio. But as we have said, we've been working very closely now for two years with customers to to to better understand their technology roadmaps and to develop solutions for the emerging process challenges that they are facing. I mean, they're all trying to drive additional automation, greater process precision in advanced packaging, and we have solutions to help them do that. So [indiscernible] 2024, Advanced Packaging related revenues are approaching about $100,000,000 So it's not so small anymore. And by the way, we expect that part of our business to grow significantly in 2025 as more investments continue to pour into [indiscernible] So today, from a product standpoint, most of the opportunities are within advanced purity solutions. So think about carriers for thin and thick wafers and the other side of the opportunity would be around freight management solutions, in particular high viscosity dispense pumps.

39m 3s

But we still have opportunities in Material Solutions as well. And we have actually very successfully introduced some dielectric slurries in these processes. It's still small, as I said, mid single digits of millions of dollars of revenue in 2025. But we expect that to grow rapidly actually for that particular platform. We expect that to grow by a factor of 3x in 2025. So as we've said many times before, I mean, it's been historically a small part of our business. We've been focusing on it We are uncovering a lot of new opportunities and it looks very, very promising going forward.

39m 47s

Thank you.

39m 48s

Thank you.

39m 51s

Thank you. We'll take our next question from Vadash Laudoy with BMO Capital Markets. Your line is open.

40m 1s

Hi, good morning, Bertrand, and let me also extend thanks Bill and Best wishes moving forward. But Sean, you mentioned some very strong numbers for CMP pads and slurries for 2024.

40m 13s

Could you add some more detail around what sort of factors drove that? Was it China? Is it new fabs? Some other drivers? And then do you see this as a leading indicator for some of your other platforms for this year?

40m 27s

Yes. So I think again, I mean overall, very, very pleased with the way our Materials Solutions platform has been performing and in particular very pleased with the CMP suite of product. I think it's actually a great success story and a story that really validates all of the expectations that we had when we chose to combine with CMC Materials, right? If you think about the types of Revenue synergies we were expecting to generate, it came down to cross selling opportunities, engaging with the customer differently and [indiscernible] a pipeline of innovation driven opportunities. And then more broadly, trying to really drive a The solution selling strategy across the materials platform. And in 2024, we started to see evidence of success. So as I mentioned, Surin Pads grew very significantly, but Post CMP cleans did as well and so did CMP filters. Actually, all of those CMP products, that suite of CMP products grew in the high teens or higher in 2024. So again that cross selling strategy is absolutely working. And we expect to see more momentum going in 2025. As I said, we're also engaging differently and better with our strategic customers. With a great focus on innovation.

42m 7s

We mentioned the progress in slurry content in advanced foundry, And I was just mentioning in the previous question, what we have accomplished in terms of uncovering new opportunities in advanced packaging. When it comes to solution selling, we believe that the proof point will be with the success that we expect to see in Moly Deposition, moly edge in three d NAND applications and at some point in time as MODELI gets adopted in logic, we expect to see also the introduction of Molly polishing solutions and that's going to create new opportunities for Entegris. So feel very good about the progress that we're making. I think it's validating the value of this combination and I'm very pleased with the way the team has been coming together and executing in 2025. [indiscernible] Got it. And as a follow-up, currency has moved meaningful in the wrong direction. Do you hedge some of that? And if possible, could you quantify the year over year impact [indiscernible] 2025 earnings based on where things stand. Thank you. Suresh, can you repeat that question Yes, just the impact of how FX has changed. I mean, over the past few months, it's gone in the wrong direction for some of the Asian currencies.

43m 39s

So if you're able to quantify that for this year?

43m 43s

So the good news is, as we the way we have our facilities set up and our manufacturing, a lot of the costs are hedged by location. So really when we quantify the FX as we do, we mentioned the FX impact on a revenue line. But as you go down to gross margin, there can be a slight delay. But overall, a minimal impact on the gross margin line. So that's why you don't hear us talk about it gross margin as much from a cost perspective. Thank you.

44m 19s

Thank you. And we'll take our next question from Timothy Arcuri with UBS. Your line is open.

44m 29s

Hi, Bertrand. So I want to go back to what the TAM is growing this year. So I heard your assumption on CapEx, I think you said flat. Mean, all the equipment companies are guiding up at least 5% WFE. So I know that you use CapEx to not WFE, but it seems like certainly WFE is going to grow this year year like maybe even higher than mid single digits. So I guess where does the assumption that CapEx is only flat come from? Is there going to be a big mix shift sort of underlying your assumptions a big mix shift from CapEx toward equipment this year, is that what's actually happening?

45m 7s

Yes. So Tim, the assumption we are using right now is the WFE would be we be up in the low single digits? And then construction will be essentially down in the low single digits. So that's the net effect of that is that flat assumption for CapEx. As we've said, There are different views of how the market could evolve this year. When we talk to all of our customers and that includes all of the large equipment makers, I think There is really not perfect visibility in the second half of the year. And we're choosing maybe to be a little bit more prudent than some. But I think based on what we went through in 2024, we think it's a prudent way to approach [indiscernible] So I think for you, I think the key take or I mean, remember that we are breaking down our annual guidance in two components. One is the industry component, and we understand that different people have different opinions around that. And then the other component is the outperformance. The one piece we really control is the outperformance. And that's really our commitment to outpace the industry by four to five points.

46m 32s

I'm sure that our views of the industry will evolve as we gain more visibility and as we progress through the year and and hopefully there would be a basis to be a little bit more constructive, a little bit more optimistic over the industry assumptions as we proceed in the year.

46m 50s

But honestly, there is not enough visibility as of right now.

46m 55s

Yes. I guess just the degree that you outperform depends on what you're That's why I was asking. But so I had a question Linda on gross margin for December. So you came in above the high end on revenue, but gross margin was at the low end. I know that the gross margin is being guided up a little bit for March, but was there something specific that happened in December that that caused that because you think the gross margin could have been the touched better? Thanks.

47m 25s

Overall, first, it's a good opportunity to just talk about gross margin overall, and I will answer your question around the December. Just broadly speaking with our gross margin, think of that as part of our cost structure, part of our annualized cost structure and in the context of our Analyst Day target model, which delivers the 40% flow through. So when you think about December, it was primarily product mix. So but over time, I want to take a step back and talk about the overall 2024 gross margin. We had a 2024 gross margin of 46% for the year, up 70 basis points year over year ex divestitures. And we achieved that gross margin expansion while running our plants at the appropriate levels. So it was a really great performance by the team. And to give you some color as we look into 2025, expect gross margin to be up about 25 to 50 basis points and there's puts and takes in that. We've talked about the puts and takes as it relates to '24 and they're similar in '25. You have volume leverage. We're going to continue to focus on productivity. And we will have some of the inefficiencies related to Taiwan and Colorado.

48m 43s

But again, think about the gross margins and the puts and takes as we look into 2025, similar to 2024 that this is all in the context of our Analyst Day target model and we're going to make sure our cost structure works with our Analyst Day target model, which is in line with you look at '25, our full year guidance for '25 and the 40% EBITDA flow through.

49m 6s

Okay, Linda. Thank you.

49m 10s

Thank you. We'll take our next question from Christopher Parkinson with Wolfe Research. Your line is open. And Mr. Parkinson, your line is open. Please unmute yourself on your end.

49m 30s

Sorry about that. This is Harris Firon on for Chris.

49m 35s

I know you said $30,000,000 to $40,000,000 of impact from the new China restriction Maybe if you could just give a little bit more color on where exactly that's affecting you, that'd be helpful.

49m 47s

Yes. So I mean, I think it's going to impact both divisions I'm not going to specifically [indiscernible] to more the restrictions are essentially adding 30 of our domestic customers to the entity list. And the result of that is that it's going to limit or exports of U. S. Made products to those customers. So complying with the new rules says that the impact of $30,000,000 to $40,000,000 of annual revenue loss which is about one point of growth.

50m 30s

And as I mentioned earlier, again, our outperformance target of four to five points is inclusive of the impact of the China restrictions.

50m 41s

Got it. That's helpful.

50m 43s

And then regarding the ramp of the Taiwan facility and the early impacts of Colorado, In the past, you've you've quantified what sort of gross margin drag you expect just from underutilization as the asset ramp.

51m 2s

Maybe how long do you think it will take to get to what you would consider a normal operating rate in Taiwan? And any early thoughts about the impact on Colorado for 2025 gross margin would be helpful.

51m 17s

Yes. Thanks for the question. Again, I would think about gross margin for 2025 in the context of our overall guidance and the target model. As I mentioned earlier, that we put some takes, but we did include any inefficiencies relative to ramping Colorado and KSP in our guidance.

51m 39s

Even with these headwinds, we do expect that gross margin in 25% to With KSP in Colorado and the ramp inefficiencies we do expect this to be mostly behind us by the second half of 2026. It's again, circle back to the target model and think of the inefficient encompassed in that target model in our guidance. Thank you. Will take our next question from Atif Malik with Citi. Thank you for taking my questions and Bill, you will definitely be missed. I have two questions. Bertrand, in the last earnings call you guys had talked about some supply constraints that impacted your September and December quarter. Are those supply constraints completely behind you or there is some lingering effect on the March quarter?

52m 44s

Thanks for following up on that. Much appreciated. So good news, the supplier issues we discussed last quarter are essentially behind us. So on the contaminated batch of HCL impacting the liquid filtration products, this was resolved in Q4 as we expected. And then on the valve constraints impacting the gas purification platform, Most importantly, we continually look to reduce our supply chain risk and minimize single source suppliers and also work very hard to have our suppliers close to our [indiscernible] This over the last two years and we'll continue to work to optimize our supply chain.

53m 32s

Thanks, Linda. And then a follow-up for you on TAP. Tariffs. I know you guys are mostly U. S. Manufacturing, but should there be any impact from the tariff situation particularly in China from any of your supply chain sources?

53m 47s

So we're closely monitoring any impact on tariffs from the America First trade policy directives. Across Canada, Mexico, China. We've completed our assessment on the newly announced tariffs and there'll be immaterial impact to our raw material costs. Over the last several years, as I just mentioned, we've been bolstering that resiliency of the supply chain and establishing local supply chains to better serve our regional customers. And we wish this strategy is helping us mitigate some of the impact of the tariffs, but we'll continue to evaluate the impact as new information comes out, and evaluate that impact on our business. Thank you.

54m 33s

Thank you. We'll take our next question from Charles Shee with Needham. Your line is open.

54m 41s

Hi, good morning. I have a question. What was the high level on the So 2024 looks like the MSI that's something reported by the third party [indiscernible] you just You did expect wafer starts to be up for you. But this year, the third party seems to be forecasting pretty much close to 10% MSI growth, but as long as you are seeing a little bit lower wafer starts growth. Mind if you walk us through where the disconnect between what you see and what the third party reports [indiscernible] really think about 2026 and beyond when I mean the first thing people are going to look at is third party forecast for MSI going forward. Sure. I think we had the beginning of that discussion in a previous call, but what third party reports track are really the the shipments of bare wafers from the wafer growers to the FADS. And that's what that MSI [indiscernible] tracks. And typically, there is a really good correlation between wafer starts and MSI, except wafer inventories sitting in the fab. That was the case in 2024. And that's why MSI was essentially reported as being down. There was And you can track that with or you can correlate that with the reports from the wafer growers.

56m 29s

But the flip side of that is that you're going to we expect to see The reverse of that play out in 2025 as those inventories have been consumed and your safety stocks get rebuilt, we expect shipments of bare wafers to exceed the actual wafer start activity in the fabs. So to put that in context, as I said, I think our wafer start number for 2024 is low single digit, 1% to 2% essentially for 2024. Compared to an MSI number that is negative mid to high single digits. And we expect to see the flip side of that in 2025 with MSI number to your point probably in the high single digit, maybe even in the low teens. The actual wafer start is expected to be a little bit less than that. Thanks. So I'll add Sasan. The other question, right, about the annual guidance you provided, plus the Q1 guidance, It seems to imply '25 is going to be another second half weighted year. For you and because last year was second half weighted.

57m 48s

I would say probably 40 to 52 split between first half and second half and 24. Based on the current visibility, do you expect something similar in that range or less second half weighted or more second half weighted than what what will be the reasons Thanks.

58m 7s

Yes, it's a good question. I think we expect certainly steady quarterly sequential growth through the year. And we expect the level of outperformance to increase in the second half of the year as we benefit from some of the node transitions I was mentioning in advanced logic and So second half certainly would be stronger than the first half. Thank you.

58m 38s

Thank you. We'll take our next question from Alexi Yifremov KeyBanc. Your line is open. Bertrand, I'll maybe ask you a longer term question. Any views on the level of file performance in 2026? Do you think you'll stay at about this level, a little higher or lower versus what you've seen '25 So Alexia, I think let's let's go through 2025 first. And then I will comment on 2026. But as a backdrop, I would say that I'm very, very pleased with the progress that we've been making developing the suite of solutions I was mentioning in in three d NAND in particular. And as those device architectures become more challenging, I would expect the magnitude of the Molydap deposition opportunity, the Moly hedge opportunity to continue to grow. So but let's first see a few of the large memory makers transition away from Tungsten into Mali for the Worldline. And then let's see how the industry is also starting to adopt MoneyEdge as a wet chemistry and moving away from the dry etch process that they are currently using. I think we'll have a lot more data points later in twenty twenty five, and I think I will be in a much better position to answer your question.

1h 26s

Thanks Bertrand. I also wanted to wish best of luck to Bill and thanks him for all the help. And for my second question, I want to ask you about China. I think now about 20% of sales And I believe in the past, you were talking about China being 20% to 25%. So perhaps you were looking at some growth in China. With these latest restrictions. How do you think this evolving? Do you think China is still a gross market or you'll be around the 20 Mark? So the way we think about it is that first of all, you're right. I mean today in 2024, China represents about 21% of our revenue It's up from 16% in 2023. So we've seen the growth we were expecting to see in China. Clearly, we are facing some new headwinds from those regulations. So I would expect a deterrent to additional growth in 2025. But I would expect China to continue to be a growth area for us We have a large number of mainstream fabs that are starting operation and I would expect them to continue to to process more and more wafers over time. We have done actually a really good job at staying competitive in China.

1h 1m 50s

We continue to create significant value for customers in helping them improve their device performance, helping them improve their yields. I expect China to continue to be a growth market for us as more mainstream fab increased their productions. Domestically.

1h 2m 10s

Thanks a lot.

1h 2m 14s

Thank you. We'll take our next question from John Roberts with Mizuho. Your line is open. Thank you and best wishes as well, Bill.

1h 2m 25s

If you split your business for Tron into advanced logic and AI versus mainstream, how would you characterize mainstream? Was it stable? Is it declining still, declining single digit, double digit?

1h 2m 41s

Yes. I mean, it's clearly advanced logic for us has been an area of significant growth last year and mainstream was an area of weakness. I think you can You will see when we file our 10 ks evidence of that as we report our revenue with our largest customer. So [indiscernible] expect that to continue that trend to continue in 2025. We expect advanced logic to remain very strong driven by your AI application. [indiscernible] I expect at least the beginning of the year to be relatively muted for mainstream logic? So that ratio will continue to tilt toward Advanced Logic, which is positive for us because we have actually a much larger content per wafer opportunity in advanced logic as compared to to mainstream logic?

1h 3m 45s

Thank you.

1h 3m 48s

Thank you. We'll take our next question from Mike Harrison with Seaport Research Partners. Your line is open.

1h 3m 57s

Good morning. Best wishes to to Bill. Wanted to see if we could discuss the the margin cadence for the year. The EBITDA margin for Q1, it looks like maybe a little bit of a seasonal dip. And I believe that typically you guys have some incentive comp payouts or equity payouts during Q2. That would lead Q2 EBITDA margin to be relatively weaker as well. But maybe just kind of discuss what our expectations should be in terms of the cadence and some of the key margin drivers for the second half of the year? Mike, thank you for that question and very good memory back to last year. So you are right. That the timing of our equity awards are in the second quarter. So the way I'd recommend thinking about it is is look at that cadence in 2024 of how margins played out and expect a very similar pattern in 2025?

1h 5m 6s

All right. Thank you. And then I was hoping we talked a little bit about the CMC consumables and it's great to hear that seeing good momentum there. I was hoping we could talk about silicon carbide opportunities within CMP. I think last year you had expected a really nice pickup in silicon carbide. Maybe it wasn't as good as you anticipated, but still a growth year in that part of the business. Where did we end the year in terms of revenue or I guess relative to your expectations And what should we be thinking for growth in silicon carbide CMP consumables for 2025?

1h 5m 54s

Yes. So you're right. I mean, second carbide was a very significant growth The vector in 2023 compared to 2022.

1h 6m 4s

We were hoping to see significant incremental growth in 2024 It just didn't happen. And I think you follow this industry closely and you understand that [indiscernible] players in the industry didn't really grow very much in 2024 and that did impact our opportunity there. So essentially our revenue for silicon carbide application were were flat year on year. Think said that, that remains a very promising area because we are enjoying a very significant share for slurries and pads and cleans. And this is another example of where this solution selling approach has been working really well. I mean, as you know, our customers are really trying to move from six inches to eight inches silicon carbide substrates. Key to that transition would be to have The right total cost of ownership And our solutions are uniquely enabling that. I mean, we have slurries offering much better removal rates, think about [indiscernible] 40% to 50% better than competitors. We have CMP pads that have superior lifetime. Centrally lasting about 30% longer than the alternatives and all of that translates into a significant improvement in cost of ownership. In the range of up to 50% to 60%. So I think we are very well positioned.

1h 7m 43s

We're just hope that this this industry actually recovers quickly. And if and when it does, you're going to start hearing us talk more about those SIC opportunities. Because we are very well positioned there.

1h 8m 2s

All right. Thanks very much.

1h 8m 6s

Thank you. The question and answer session has concluded. I will now turn the program back over to Bill Seymour for closing remarks.

1h 8m 17s

Thank you for joining our call today.

1h 8m 19s

Please reach out to me directly if you have any follow-up. Have a good day and you can now disconnect.

1h 8m 27s

Thank you. This concludes today's Integra's Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. Please disconnect your line at this time and have a wonderful day.

Key Insights

Entegris reported strong Q4 2024 results, with revenue excluding divestitures growing 11% year-over-year, driven by record sales in Materials Solutions and Advanced Purity Solutions divisions. Full-year revenue grew over 5%, outperforming the market by 3-4 points.
For 2025, Entegris expects sales of approximately $3.4 billion, representing 6.5% growth, with EBITDA slightly above 29% of revenue and non-GAAP EPS of $3.25 or higher. The company anticipates outperforming the market by 4-5 points despite a $30-40 million revenue impact from new China restrictions.
Q1 2025 guidance includes sales of $775-805 million, gross margin of 45.5%-46.5%, and non-GAAP EPS of $0.64-$0.71. The company expects sequential growth throughout the year, with stronger performance in the second half due to node transitions in advanced logic and memory.
Entegris highlighted significant progress in its Materials Solutions division, particularly in CMP consumables, with slurry revenue up 14% and CMP pads up 24% in 2024. The company also sees promising growth opportunities in advanced packaging and silicon carbide CMP consumables.
The company paid down $625 million of debt in 2024 and plans to continue debt reduction in 2025, targeting gross leverage below 4x by year-end. Free cash flow margin improved to 10% in 2024, with a goal to return to mid-to-high teens in the coming years through EBITDA leverage and working capital optimization.

Income Statement

Revenue

	2020	2021	2022	2023	2024
Revenue	$1.9B	$2.3B	$3.3B	$3.5B	$3.2B
Cost of Revenue	$1B	$1.2B	$1.9B	$2B	$1.8B
Gross Profit	$850M	$1.1B	$1.4B	$1.5B	$1.5B
Gross Profit %	46%	46%	43%	43%	46%
R&D Expenses	$136M	$168M	$229M	$277M	$316M

2020

2021

2022

2023

2024

Revenue

$1.9B

$2.3B

$3.3B

$3.5B

$3.2B

Cost of Revenue

$1B

$1.2B

$1.9B

$2B

$1.8B

Gross Profit

$850M

$1.1B

$1.4B

$1.5B

Gross Profit %

46%

43%

46%

R&D Expenses

$136M

$168M

$229M

$277M

$316M

Cash Flow

Net Income

	2020	2021	2022	2023	2024
Net Income	$295M	$409M	$209M	$181M	$293M
Dep. & Amort.	$137M	$138M	$279M	$387M	$378M
Def. Tax	-$7.3M	-$18M	-$103M	-$146M	-$79M
Stock Comp.	$23M	$30M	$67M	$61M	$66M
Chg. in WC	-$19M	-$197M	-$238M	$51M	-$109M

2020

2021

2022

2023

2024

Net Income

$295M

$409M

$209M

$181M

$293M

Dep. & Amort.

$137M

$138M

$279M

$387M

$378M

Def. Tax

-$7.3M

-$18M

-$103M

-$146M

-$79M

Stock Comp.

$23M

$30M

$67M

$61M

$66M

Chg. in WC

-$19M

-$197M

-$238M

$51M

-$109M

Balance Sheet

Cash

	2020	2021	2022	2023	2024
Cash	$581M	$403M	$563M	$457M	$329M
ST Investments	$0	$0	$32M	$0	$0
Cash & ST Inv.	$581M	$403M	$563M	$457M	$329M
Receivables	$264M	$347M	$535M	$457M	$495M
Inventory	$324M	$475M	$813M	$607M	$638M

2020

2021

2022

2023

2024

Cash

$581M

$403M

$563M

$457M

$329M

ST Investments

$32M

Cash & ST Inv.

$581M

$403M

$563M

$457M

$329M

Receivables

$264M

$347M

$535M

$457M

$495M

Inventory

$324M

$475M

$813M

$607M

$638M

Go Deeper

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice. · See all tickers.

Earnings

Report Date

Feb 6, 2025

Reported Revenue

849.8M

Avg 1d Change

5.43%

Report Period

Q4 2024

Reported EPS

0.84

Implied Move 1d

9.65%

Transcript

10m 49s

12m 9s

With that, I'll hand the call over to Bertrand.

12m 12s

Thank you, Bill, and good morning.

12m 15s

I am pleased that we were able to cap off 2024 with strong performance.

12m 21s

14m 10s

15m 55s

17m 41s

18m 56s

19m 18s

20m 28s

Adjusted EBITDA in Q4 was 29.2% of revenue, also in line with our guidance. The GAAP tax rate in Q4 was approximately 9% and the non GAAP tax rate was 12%.

20m 43s

The lower than expected tax rate was driven by favorable income mix. GAAP diluted EPS was $0.67 per share in the fourth quarter.

20m 53s

21m 36s

22m 17s

23m 25s

24m 19s

26m 26s

I'll now hand it back over to Bertrand for some closing remarks. Thank you, Linda.

26m 33s

28m 18s

28m 35s

The floor is now open for questions. Our first question is coming from Toshiya Hari with Goldman Sachs. Your line is open.

29m 11s

30m 40s

32m 22s

33m 24s

34m 3s

35m 25s

Thank you.

35m 28s

36m 7s

37m 8s

37m 32s

39m 3s

39m 47s

Thank you.

39m 48s

Thank you.

39m 51s

Thank you. We'll take our next question from Vadash Laudoy with BMO Capital Markets. Your line is open.

40m 1s

Hi, good morning, Bertrand, and let me also extend thanks Bill and Best wishes moving forward. But Sean, you mentioned some very strong numbers for CMP pads and slurries for 2024.

40m 13s

40m 27s

42m 7s

43m 39s

So if you're able to quantify that for this year?

43m 43s

44m 19s

Thank you. And we'll take our next question from Timothy Arcuri with UBS. Your line is open.

44m 29s

45m 7s

46m 32s

46m 50s

But honestly, there is not enough visibility as of right now.

46m 55s

47m 25s

48m 43s

49m 6s

Okay, Linda. Thank you.

49m 10s

Thank you. We'll take our next question from Christopher Parkinson with Wolfe Research. Your line is open. And Mr. Parkinson, your line is open. Please unmute yourself on your end.

49m 30s

Sorry about that. This is Harris Firon on for Chris.

49m 35s

I know you said $30,000,000 to $40,000,000 of impact from the new China restriction Maybe if you could just give a little bit more color on where exactly that's affecting you, that'd be helpful.

49m 47s

50m 30s

And as I mentioned earlier, again, our outperformance target of four to five points is inclusive of the impact of the China restrictions.

50m 41s

Got it. That's helpful.

50m 43s

51m 2s

51m 17s

51m 39s

52m 44s

53m 32s

53m 47s

54m 33s

Thank you. We'll take our next question from Charles Shee with Needham. Your line is open.

54m 41s

56m 29s

57m 48s

58m 7s

58m 38s

1h 26s

1h 1m 50s

1h 2m 10s

Thanks a lot.

1h 2m 14s

Thank you. We'll take our next question from John Roberts with Mizuho. Your line is open. Thank you and best wishes as well, Bill.

1h 2m 25s

If you split your business for Tron into advanced logic and AI versus mainstream, how would you characterize mainstream? Was it stable? Is it declining still, declining single digit, double digit?

1h 2m 41s

1h 3m 45s

Thank you.

1h 3m 48s

Thank you. We'll take our next question from Mike Harrison with Seaport Research Partners. Your line is open.

1h 3m 57s

1h 5m 6s

1h 5m 54s

Yes. So you're right. I mean, second carbide was a very significant growth The vector in 2023 compared to 2022.

1h 6m 4s

1h 7m 43s

1h 8m 2s

All right. Thanks very much.

1h 8m 6s

Thank you. The question and answer session has concluded. I will now turn the program back over to Bill Seymour for closing remarks.

1h 8m 17s

Thank you for joining our call today.

1h 8m 19s

Please reach out to me directly if you have any follow-up. Have a good day and you can now disconnect.

1h 8m 27s

Thank you. This concludes today's Integra's Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. Please disconnect your line at this time and have a wonderful day.

Key Insights

Entegris reported strong Q4 2024 results, with revenue excluding divestitures growing 11% year-over-year, driven by record sales in Materials Solutions and Advanced Purity Solutions divisions. Full-year revenue grew over 5%, outperforming the market by 3-4 points.
For 2025, Entegris expects sales of approximately $3.4 billion, representing 6.5% growth, with EBITDA slightly above 29% of revenue and non-GAAP EPS of $3.25 or higher. The company anticipates outperforming the market by 4-5 points despite a $30-40 million revenue impact from new China restrictions.
Q1 2025 guidance includes sales of $775-805 million, gross margin of 45.5%-46.5%, and non-GAAP EPS of $0.64-$0.71. The company expects sequential growth throughout the year, with stronger performance in the second half due to node transitions in advanced logic and memory.
Entegris highlighted significant progress in its Materials Solutions division, particularly in CMP consumables, with slurry revenue up 14% and CMP pads up 24% in 2024. The company also sees promising growth opportunities in advanced packaging and silicon carbide CMP consumables.
The company paid down $625 million of debt in 2024 and plans to continue debt reduction in 2025, targeting gross leverage below 4x by year-end. Free cash flow margin improved to 10% in 2024, with a goal to return to mid-to-high teens in the coming years through EBITDA leverage and working capital optimization.