Entegris Inc Faces Mixed Sentiment Amid Growth and Tariffs

Entegris Inc ((ENTG)) has held its Q1 earnings call. Read on for the main highlights of the call.

Entegris Inc’s latest earnings call presented a mixed sentiment, with positive notes on revenue growth and strategic expansions being overshadowed by challenges such as new China tariffs and industry uncertainties. The company expressed a cautious outlook moving forward.

Year-on-Year Revenue Growth

Entegris reported a 5% year-on-year revenue growth in the first quarter, excluding divestitures. The Materials Solutions segment saw an 8% increase, while CMP slurries and pads delivered nearly 20% growth, showcasing the company’s robust performance in these areas.

Strategic Manufacturing Expansion

The company is making significant progress in its manufacturing expansions in Colorado and Taiwan. Initial equipment qualifications are on track, with customer qualifications expected in the second half of 2025, indicating a strategic push to enhance production capabilities.

Advanced Packaging Growth

Entegris’s Advanced Packaging business more than doubled in Q1 2025 compared to the same period in 2024. The company expects this segment to grow by over 25% for the full year 2025, highlighting a strong demand in advanced packaging solutions.

Engagement with 3D-NAND Players

The company is making strides in moly deposition materials with major 3D-NAND players, anticipating adoption in the latter half of 2025. This engagement reflects Entegris’s commitment to innovation and collaboration with industry leaders.

Impact of China Tariffs

New tariffs introduced by China on U.S. imports pose a significant challenge, potentially impacting Q2 revenue by up to $50 million. Shipments from the U.S. are currently on hold, adding to the company’s cautious outlook.

Sequential Revenue Decrease

Entegris experienced a 9% sequential decline in sales, primarily due to reduced demand for CapEx products, including fluid handling products and FOUPs. This decrease highlights the volatility in the market and the challenges faced by the company.

Q1 Revenue Below Guidance

The first quarter revenue fell slightly below the guidance range due to softer-than-expected demand for fluid handling and FOUPs products. This shortfall underscores the unpredictability in customer demand and market conditions.

Uncertainty in Semiconductor Industry

The semiconductor industry is facing significant uncertainty due to new tariff regimes and macroeconomic conditions. Entegris has provided a broader Q2 revenue guidance and has not updated its 2025 outlook, reflecting the industry’s volatile environment.

Forward-Looking Guidance

Entegris provided detailed guidance for the upcoming quarters. The company expects second-quarter revenue between $735 million and $775 million, with a gross margin of approximately 45% and an EBITDA margin of around 27.5%. Operating expenses are projected to be between $225 million to $229 million on a GAAP basis. Entegris remains focused on managing costs, improving free cash flow, and reducing debt.

In summary, Entegris Inc’s earnings call revealed a cautious sentiment amid positive growth metrics and strategic initiatives. The company faces challenges from new tariffs and industry uncertainties, impacting its outlook. However, Entegris remains committed to strategic growth and financial management, positioning itself for future opportunities.