Revenue Growth Above Guidance
Q1 sales of $812 million, up 5% year-over-year and slightly above the midpoint of guidance.
Segment & Unit Momentum
APS sales +7% YoY and Material Solutions +3% YoY; unit-driven revenue (correlated to MSI) increased ~7% YoY driven by liquid filtration, advanced deposition and selective etch; liquid filtration recorded its third consecutive record quarter.
Margin Expansion and Profitability Beats
Reported GAAP and non-GAAP gross margin of 46.9% (includes ~50 bps one-time benefit; normalized ~46.4%); adjusted EBITDA $226 million (27.8% of revenue) and non-GAAP EPS $0.86, both above guidance.
Strong Free Cash Flow and Deleveraging Progress
Delivered $144 million of free cash flow (≈18% of sales) in Q1; repaid ~$50 million of term loan in quarter; net debt $3.3 billion and net leverage 3.6x with expectation to reduce to ~3.0x by end of 2026.
Geographic Strength in Asia
Taiwan grew ~18% YoY in Q1 and broader Asia grew double-digits (>10% YoY), supported by strong positions in advanced logic and memory.
Constructive Industry Outlook
Management now expects mid- to high-single-digit MSI growth for remainder of 2026 (≈75% of revenue) and an improved fab construction outlook (the remaining ~25% of revenue); company notes improving WFE and fab build cadence and a 2 nm production ramp this year.
Operational Actions Driving Structural Improvement
Productivity, manufacturing-network efficiency and footprint optimization (including closure of a Chandler subscale site) cited as key drivers of margin improvement and future operating leverage.
Forward Guidance and Financial Modeling Clarity
Q2 guidance: sales $815M–$845M (≈+5% YoY at midpoint), gross margin 46.25%–47.25%; FY modeling items provided (CapEx ~$250M, diluted share count ~154M, net interest slightly below $190M).