Entegris Inc

Strong Q2 performance (beats guidance) + margin/cash momentum - Revenue: $883M, +11% YoY, above guidance; free cash flow: $120M (14% of sales). - Profitability: GAAP/non-GAAP gross margin 47.6%, improved sequentially and highest since early 2022; adjusted EBITDA margin 28.4%. - Balance sheet / leverage: repaid $200M debt in the quarter; net leverage down to 3.4x; company now expects to end 2026 in the high 2x range.

Forward outlook: MSI growth up + accelerating revenue trajectory - 2026 MSI growth expectation raised to 7–8% vs the mid-single-digit assumption at start of year. - Q3 guidance: $905M–$935M sales (≈ +14% YoY at midpoint), with gross margin 47.5%–48.5% (still improving). - EPS: GAAP $0.75–$0.83, non-GAAP $0.96–$1.04; Q4 revenue expected +~4% sequentially from Q3 midpoint (implying mid-teens YoY growth). - Surprising/positive: management emphasized second-half acceleration tied to strengthening bookings/backlog and capex projects.

CapEx-linked demand looks stronger, but timing is the key risk/driver - Entegris framing: 75% revenue driven by wafer starts; 25% by CapEx (10% WFE-driven, 15% fab construction-driven). - WFE order rates up ~20–30% (similar pace to WFE market). - Timing note (important for investors modeling): - 2H’26 CapEx revenue: mainly WFE uplift, low double-digit to very low double-digit fab growth, with bulk of construction benefit expected in 2027, not immediately in 2H’26. - They track ~20 major leading-edge capacity expansions: 8–10 advanced logic, 7–8 advanced memory, 6–8 advanced packaging—supports visibility but also implies industry cycle sensitivity.