MKS Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Krish Sankar - Cowen and Company LLC - Analyst : John, I had a couple of them. Number one is when I look past the September quarter, even if I try to flatline semis in December, it looks like you might probably grow 10% year over year, which is better than WFE. I'm just kind of curious how to think about semi revenue trends beyond September? And are there anything that we need to keep in mind kind of like what you mentioned is some Q-over-Q volatility with NAND, et cetera?

Question: Krish Sankar - Cowen and Company LLC - Analyst : Got it. Thanks, John. And then as a quick follow-up. On the E&P side, I think your PCB business, three months ago, you said they might be a little slightly weaker in June because of pull-ins of the tools in March, but then it looks like June came in better. I'm wondering if some of the PCB strength you're seeing has to do with more of downstream smartphone pull-ins or how to think about the PCB business going forward?

Question: Krish Sankar - Cowen and Company LLC - Analyst : All right. Thanks a lot, John. Thank you.

Question: Steve Barger - KeyBanc Capital Markets Inc - Analyst : John, I'm going to stick with the chemistry equipment orders and some of the momentum there. Does it feel like that's the beginning of a sustainable trend? And what are you hearing from substrate manufacturers in terms of capacity utilization and how they're viewing growth, whether it's from traditional products or AI-related products?

Question: Steve Barger - KeyBanc Capital Markets Inc - Analyst : Yeah. Thanks for that. That's good detail. And I suspect you all have been engaged in strategic planning for next year. And certainly, with things feeling maybe a little bit better than last year, any high-level thoughts on where you want to point the company, what your operational priorities are, or anything in the portfolio that we should be thinking about?

Question: Steve Barger - KeyBanc Capital Markets Inc - Analyst : Great. Thank you.

Question: Shane Brett - Morgan Stanley - Analyst : Firstly, on E&P. If I take your Q3 guide, you're tracking about 20% year-over-year growth through Q3, which is well ahead of the GDP plus 300 basis points you spoke about at your 2022 Analyst Day. Just given the AI strength that you're seeing, maybe in some revenue synergies with Atotech, have your growth expectations for this business materially changed since the Analyst Day?

Question: Shane Brett - Morgan Stanley - Analyst : Got it. Thank you. And as for my follow-up, so this might be a bit of a long shot question, but there has been talks that the big GPU customer may move from CoWoS to CoPoS, but just including this inflection, how should sort of this inflection or the any other inflections that may sort of significantly impact your business for the E&P side going forward?

Question: Shane Brett - Morgan Stanley - Analyst : Got it. Thank you very much.

Question: Peter Peng - JPMorgan Chase & Co - Analyst : Within your Semiconductors, can you kind of provide some color on how the lithography and inspection applications are doing? I think the last you updated us, you guys were kind of in this $300 million revenue run rate, any color on that?

Question: Peter Peng - JPMorgan Chase & Co - Analyst : Got it. And then my follow-up on -- in your Electronics and Packaging, if I look at from an absolute dollar year over year, you guys have been almost growing like $40 million to $50 million in terms of absolute year over year. And you mentioned that the smartphone and PC markets are (inaudible). Can I kind of correlate that this is all driven by AI applications this $40 million, $50 million? Or is there any other stuff in there that's driving that

Question: Peter Peng - JPMorgan Chase & Co - Analyst : Perfect. Thank you.

Question: Joe Quatrochi - Wells Fargo Securities LLC - Analyst : Maybe just a follow-up on that. I guess as I think about like the expectations for Chemistry growth in 3Q, it sounds like relatively seasonal. So do we assume that to get to seasonal because you're seeing outperformance at AI and your kind of traditional applications would be otherwise below seasonal growth?

Question: Joe Quatrochi - Wells Fargo Securities LLC - Analyst : Okay. But I guess the rate of growth is -- I mean, is it better than normal seasonality, given that this added AI applications that are seeing incremental demand?

Question: Joe Quatrochi - Wells Fargo Securities LLC - Analyst : Yeah. That's helpful. And maybe as a follow-up in the semi business, just outside of the NAND lumpiness, I mean, are you seeing customers -- we've heard customers kind of focusing more on inventory optimization versus buying incremental new components or keeping inventory flat, just given kind of the tariff dynamics and trying to avoid some of those? Are you seeing that in your business as well?

Question: Joe Quatrochi - Wells Fargo Securities LLC - Analyst : Thank you.

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : I was wondering if you could maybe focus on the topic of tariffs from a different angle for a moment. First of all, can you talk about whether you baked any relative conservatism into the September quarter guidance based on some of the pull-in commentary you had earlier? And secondly, as a result of President Trump's announcement on Semiconductor tariffs last night, I'm wondering if you see any kind of competitive advantage for you relative to your competitors as a result of that or kind of any other angle on that you can foresee at this point? Thank you.

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Thank you very much.

Question: David Liu - Barclays Services Corp - Analyst : I was wondering if you can provide a little bit more color on your HDI, MLB for AI applications, maybe to the extent you have visibility, whether you see them going into merchant GPUs, hyperscaler versus neocloud, custom ASICs, any color you have there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 07, 2025 / 12:30PM, MKSI.OQ - Q2 2025 MKS Inc Earnings Call

Question: David Liu - Barclays Services Corp - Analyst : Okay. Thanks. And then maybe a follow-up on OpEx. Are you guys still seeing the $250 million to $260 million range for fiscal '25? And then maybe 2026, where do you guys see you're investing in your business? Thanks. Ramakumar Mayampurath - MKS Inc - Chief Financial Officer, Principal Financial Officer, Executive Vice President and Treasurer Yeah, David, this is Ram. I would keep the $250 million to $260 million as the range for Q4. We are not guiding beyond Q3, but that's a useful range to model. As you saw in Q2 and our guidance for Q3, we are at the lower end of that rate. So OpEx is something we take very seriously and try and manage while making the investments needed for the company's long-term success. So it's a balance between meeting profitability and investments for long-term success. But it's something which we watch very carefully.

Question: Shane Brett - Morgan Stanley - Analyst : I just have one. So in the June quarter, your Specialty Industrial business grew quarter over quarter for the first time since I think June quarter of '23, if I'm correct. I know you're guiding the September quarter down a touch sequentially, but are there any positive lead indicators in that business that you would call out? Thank you.

Question: Shane Brett - Morgan Stanley - Analyst : Got it. Thank you very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 07, 2025 / 12:30PM, MKSI.OQ - Q2 2025 MKS Inc Earnings Call