MKS Instruments, Inc.

Q2 results strong; momentum building into H2 - Revenue $1.25B, +16% QoQ and +28% YoY (high end/above guidance). - Segment growth: Semiconductor $554M (+19% QoQ, +28% YoY); Electronics & Packaging $381M (+19% QoQ, +44% YoY); Specialty Industrial $313M (+8% QoQ, +14% YoY). - Profitability: Gross margin 47.6% (about 100 bps of discrete benefits from tariff/duty refunds); Operating margin 25.6%; Adjusted EBITDA margin 28.6%. - Earnings/cash: Net earnings $232M ($3.30/diluted share), +86% YoY per share; Free cash flow $188M (~15% of revenue); Liquidity >$1.6B (cash $611M + $1B undrawn revolver).

Q3 outlook: continued acceleration and strong margins despite mix/investment headwinds - Revenue forecast $1.35B ± $40M. - By segment: Semiconductor $630M ± $15M; Electronics & Packaging $385M ± $15M; Specialty Industrial $335M ± $10M. - Guidance: Gross margin ~47% ± 100 bps; Operating margin 26.3% (operating income $355M); Adjusted EBITDA $395M ± $28M. - EPS: $3.58 ± $0.31; CapEx ~4%–5% of revenue; tax rate ~20% in Q3 and full-year tax lower end of 18%–20%. - Semi growth acceleration: semi revenue implied >50% YoY in Q3 (driving by depth-etch + litho/metrology/inspection + power/vacuum/plasma/reactive gases).

Big opportunity areas: AI-driven semiconductor + advanced packaging, and strong chemistry attach - AI-driven WFE and advanced packaging investment is the core demand driver across semis and PCB/advanced electronics. - Semi: strong momentum in deposition/etch, RF power (NAND upgrades), vacuum subsystems, plasma generators, reactive gases, plus photonics/optics in litho/metrology/inspection. - Electronics & Packaging: chemistry is inflecting sharply—management highlighted “chemistry equipment demand… strongest it has ever been” with visibility through 2027. - Chemistry growth economics: management reiterated chemistry typically represents ~20%–40% of chemistry “output per dollar of equipment,” but noted the *mix is shifting toward higher-end equipment*, implying the math could be toward the lower end of that range; still expects higher gross margin chemistry to grow as equipment ramps.