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- **Record Liquid Filtration Sales**: Q3 highlight with strong demand for high-purity solutions in advanced manufacturing.
- **Free Cash Flow Improvement**: $191M in Q3, highest in 6 years, driven by inventory reductions and operational efficiency.
- **AI-Driven Growth**: 30% of revenue tied to AI, with HBM CMP business up 100% YoY and strategic wins in advanced packaging.
- **Manufacturing Expansion**: New Taiwan and Colorado facilities to ramp in 2026, supporting local-for-local production and reducing leverage.

**【CEO Summary Section】**
- **New CEO Priorities**: David Reeder emphasized customer intimacy, accelerating new facility ramps in Taiwan and Colorado, and improving free cash flow. He highlighted record liquid filtration sales and progress in moly and CMP consumables for advanced nodes.
- **Manufacturing Expansion**: New facilities in Taiwan and Colorado are critical for local-for-local production, with Taiwan expected to ramp in 2026 and Colorado now operational. CapEx is set to decline YoY post-2025.
- **Financial Targets**: Q3 revenue of $807M (flat YoY), non-GAAP EPS of $0.72, and free cash flow of $191M (highest in 6 years). Gross margin underperformed due to underutilized assets.
- **Market Outlook**: Advanced logic and HBM growth driven by AI, while mainstream logic and NAND show cautious optimism. 3D NAND demand may accelerate with AI inference workloads.

**【CFO Financial Commentary】**
- **Q3 Results**: GAAP net income $420M, non-GAAP EPS $0.72 (in-line with guidance). Operating cash flow $191M, down $50M in inventory. Free cash flow margin 11% YTD.
- **Gross Margin Challenges**: Underutilized manufacturing assets (including new facilities) caused 100bps margin miss. Sequential margin decline due to production volume reductions.
- **Debt Reduction**: $150M debt paid in Q3, targeting gross leverage below 4x. Q4 guidance: revenue $790-830M, gross margin 43-44%, non-GAAP EPS $0.62-0.69.

**【Q&A Highlights】**
- **Capacity Utilization**: Facilities underutilized due to cautious industry wafer starts. Q3 focus on inventory reduction for cash flow, with utilization expected to improve in 2026.
- **AI Impact**: 5% of wafers driven by AI, but 30% of Entegris' revenue. HBM CMP business up 100% YoY, with strategic wins in advanced packaging.
- **China Strategy**: >80% local-for-local manufacturing in China by end-2025, with minimal sales impact from product rationalization.
- **2026 Outlook**: Prudent wait-and-see approach on mainstream logic, but optimism around AI-driven advanced logic and memory growth.

Entegris, Inc. (ENTG) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

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Operating Income

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Other Non-Operating Income (Loss)

Net Interest Expense

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Net Income

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Preferred Stock Dividends

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Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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ENTG

ENTG fundamentals

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