Entegris Inc. (NASDAQ: ENTG) reported fourth-quarter 2025 financial results on February 10, 2026, characterized by a slight sequential increase in net sales but a significant year-over-year decline in profitability. The performance reflects a transitional period for the semiconductor materials supplier as it balances strategic global manufacturing investments with a cautious industry recovery. While the company achieved a modest uptick in sales relative to the third quarter, profitability was pressured by a combination of strategic facility expansions and restructuring activities.
Quarterly Financial Performance and Key Metrics
Entegris reported fourth-quarter net sales of $823.9 million, reflecting a 2.1% sequential increase but a 3.0% decline compared to the $849.8 million recorded in the same period of 2024. For the full fiscal year 2025, total revenue reached $3,196.6 million, a slight contraction from the $3,241.2 million reported in the previous year.
The company’s GAAP net income for the quarter fell to $49.4 million, or $0.32 per diluted share, down significantly from $102.3 million, or $0.67 per share, in the prior-year period. This decline was largely attributed to elevated operating expenses, which rose 7.8% year-over-year to $255.7 million. These costs included a $10.9 million loss linked to the divestiture of a specialty chemicals business and $10.6 million in restructuring charges.
Segment-Level Performance
The company’s performance was shaped by varying dynamics within its primary reportable segments:
Materials Solutions (MS): This segment recorded net sales of $361.8 million, up 3.8% sequentially. Growth was driven by robust demand for advanced deposition materials. Adjusted segment profit margin improved to 20.9%, up from 18.9% in the third quarter, aided by a more favorable product mix.
Advanced Purity Solutions (APS): Net sales stood at $464.5 million, down 5.4% year-over-year. While liquid filtration saw strong demand, it was offset by lower volumes in fluid handling and Front Opening Unified Pods (FOUPs). The adjusted segment profit margin contracted to 24.8% from 27.9% a year ago, primarily due to the costs associated with ramping up new manufacturing sites.
Executive Commentary and Strategic Outlook
Bertrand Loy, President and Chief Executive Officer of Entegris, characterized the 2025 performance as resilient despite a challenging industry backdrop. Loy noted that the company outperformed the broader market for the year and successfully executed on strategic goals, including the streamlining of its product portfolio and the reduction of corporate debt.
Regarding the lower margins, management indicated that the operational ramp-up of new facilities in Colorado and Taiwan is a temporary headwind. These investments are viewed as critical infrastructure to support the next generation of semiconductor technology and long-term volume growth.
Balance Sheet and 2026 Guidance
Entegris maintained a focused capital allocation strategy, ending the year with $360.4 million in cash and equivalents. The company reported fourth-quarter free cash flow of $134.0 million and made net debt payments of $150.0 million during the period, bringing its total long-term debt down to $3.70 billion from $3.98 billion at the end of 2024.
For the first quarter of 2026, the company issued the following projections:
Net Sales: $785 million to $825 million.
Non-GAAP Diluted EPS: $0.70 to $0.78.
Adjusted EBITDA Margin: Approximately 26.5% to 27.5% of net sales.
Industry Context
The semiconductor materials sector continues to navigate a landscape defined by “geopolitical uncertainty” and “volatile financial markets,” as noted in the company’s safe harbor disclosures. While inventory levels across the industry show signs of stabilizing, the pace of recovery remains uneven. Entegris’s move to diversify its manufacturing footprint globally is a direct response to these macro-level risks and the increasing complexity of advanced chipmaking processes.
Reasons to Pass on ENTG
- Year-over-year profitability decline: GAAP net income fell sharply to $49.4 million from $102.3 million a year earlier, reflecting a material contraction in earnings despite relatively stable revenue.
- Elevated operating expenses: Operating costs increased 7.8% year-over-year, driven by restructuring charges and losses related to business divestitures, pressuring margins.
- Revenue contraction on an annual basis: Fourth-quarter net sales declined 3.0% year-over-year, and full-year 2025 revenue edged lower compared with 2024, indicating limited top-line growth momentum.
- Margin pressure in core segments: The Advanced Purity Solutions segment reported a year-over-year decline in adjusted profit margin due to costs associated with ramping new manufacturing sites.
- Transitional phase with near-term headwinds: Ongoing facility expansions in Colorado and Taiwan are expected to weigh on margins and operating efficiency in the near term.
- High leverage despite debt reduction: Long-term debt remains elevated at $3.70 billion, potentially constraining financial flexibility amid an uneven industry recovery.
- Cautious near-term outlook: First-quarter 2026 guidance implies sequentially lower revenue compared with the fourth quarter midpoint, suggesting demand recovery remains uncertain.
- Exposure to industry volatility: The company operates within a semiconductor materials market characterized by geopolitical risks and uneven recovery trends, which could continue to impact results.