ENTG

It has been about a month since the last earnings report for Entegris (ENTG). Shares have lost about 9.8% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Entegris due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Entegris, Inc. reported second-quarter 2026 non-GAAP earnings of 93 cents per share, up 40.9% year over year. The figure beat the Zacks Consensus Estimate of 83 cents by 12.1%, reflecting stronger semiconductor demand, operational execution and accelerating customer capital investment. Net sales increased 11.5% to $883.2 million and topped the consensus estimate of $840 million by 5.2%. Unit-driven revenues rose 10%, while capital expenditure-related revenues advanced 15%, supported by AI-linked investments across advanced logic, memory and packaging. Advanced Purity Solutions revenues climbed 17% year over year to $514.6 million. Growth reflected strength across both unit-driven and capital expenditure-related demand, with liquid filtration delivering a fourth consecutive record quarter. The microenvironments business, led by front-opening unified pods, posted its strongest performance in more than three years. Taiwan benefited from leading-edge logic and advanced packaging expansions, while North America returned to year-over-year growth. Adjusted segment margin expanded to 30.3% from 24.1%. Materials Solutions revenues rose 4.6% year over year to $371.3 million. Advanced deposition materials, selective etch chemistries and chemical mechanical planarization products drove the increase. Adjusted segment profit was $77.7 million, up 2.9%, while adjusted segment margin eased to 20.9% from 21.3%. Higher raw-material and logistics costs, along with planned direct-labor investments, were largely offset by manufacturing improvements and productivity initiatives. Adjusted gross margin expanded to 47.6% from 44.6% a year earlier and improved from 46.9% in the first quarter. Management attributed the sequential gain to operational progress despite investments to support future demand. Non-GAAP operating expenses increased 8.3% year over year to $203.9 million, mainly due to higher variable compensation tied to stronger business performance. Even so, adjusted operating margin widened to 24.5% from 20.9%, and adjusted EBITDA margin rose to 28.4% from 27.3%. The company generated operating cash flow of $156.2 million in the second quarter, while capital expenditures were $39.3 million. Free cash flow totaled $120.3 million in the second quarter, representing roughly 14% of sales and more than doubling from $47 million in the year-ago quarter. In the first half of 2026, Entegris generated operating cash flow of $339.2 million and free cash flow of $263.8 million. ENTG repaid $200 million of debt during the quarter, reducing long-term debt to $3.46 billion. It ended the second quarter with cash and cash equivalents of $353.6 million. The company’s net leverage improved to 3.4 times, and management now expects leverage to finish 2026 below three times. Management raised its 2026 market expectation to 7%-8% growth in million square inches of wafers, up from the mid-single-digit assumption at the start of the year. The outlook reflects stable advanced logic and memory expectations, along with a modestly improving mainstream logic environment. The company is tracking more than 20 major leading-edge capacity expansions globally, including advanced logic, advanced memory and advanced packaging projects. Bookings strengthened during the quarter, lifting backlog and increasing visibility into customer spending plans through the second half of 2026 and into 2027. For the third quarter of 2026, Entegris expects sales between $905 million and $935 million. GAAP earnings are projected in the range of 75-83 cents per share, while non-GAAP earnings are forecast between 96 cents and $1.04. The company expects an adjusted EBITDA margin of 28%-29% and an adjusted operating margin of 24.2%-25.1%. Management also sees fourth-quarter revenues rising about 4% from the midpoint of third-quarter guidance, which would represent mid-teens year-over-year growth. For 2026, ENTG expects net interest expense of approximately $180 million, a non-GAAP tax rate of about 14% and capital expenditures of $250 million. The share count is projected at roughly 154 million. Since the earnings release, investors have witnessed a upward trend in fresh estimates. The consensus estimate has shifted 11.47% due to these changes. At this time, Entegris has a nice Growth Score of B, a score with the same score on the momentum front. However, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Entegris has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months. Entegris belongs to the Zacks Electronics - Semiconductors industry. Another stock from the same industry, Qualcomm (QCOM), has gained 7.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Qualcomm reported revenues of $9.95 billion in the last reported quarter, representing a year-over-year change of -4%. EPS of $2.21 for the same period compares with $2.77 a year ago. For the current quarter, Qualcomm is expected to post earnings of $2.18 per share, indicating a change of -27.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -2.4% over the last 30 days. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Qualcomm. Also, the stock has a VGM Score of F. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Entegris, Inc. (ENTG) : Free Stock Analysis Report QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). 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Brown Brothers Harriman, an investment management company, released its Q2 2026 investor letter for the “BBH Select Mid Cap ETF”. A copy of the letter can be downloaded here. In the quarter, the fund increased 9.7% on a total return basis compared to the Russell Midcap Index’s 13.8% return. Artificial intelligence is a key factor influencing market performance, with high-valuation and high-beta companies consistently outperforming others. The portfolio saw gains from being overweight in technology and industrials but missed opportunities due to underweighting more cyclical stocks. At the end of Q2 2026, the Fund held positions in 27 companies, with 48% of assets concentrated in the top 10 holdings. The Fund’s strategy focuses on companies priced below intrinsic value to ensure a margin of safety, rather than on whether valuations are high or low. Additionally, reviewing the Fund’s top five holdings could help identify its best picks for 2026. In its Q2 2026 investor letter, BBH Select Series – Mid Cap ETF highlighted Entegris, Inc. (NASDAQ:ENTG). Headquartered in Billerica, Massachusetts, Entegris, Inc. (NASDAQ:ENTG) provides materials and process solutions for the semiconductor and other high-technology industries. On August 19, 2026, Entegris, Inc. (NASDAQ:ENTG) closed at $144.28 per share, reflecting a market capitalization of $22.05 billion. Entegris, Inc. (NASDAQ:ENTG) posted a one‑month return of 6.64%, while its shares gained 75.76% over the past 52 weeks. BBH Select Series – Mid Cap ETF stated the following regarding Entegris, Inc. (NASDAQ:ENTG) in its Q2 2026 investor letter: Entegris, Inc. (NASDAQ:ENTG) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 47 hedge fund portfolios held Entegris, Inc. (NASDAQ:ENTG) at the end of the first quarter, up from 43 in the previous quarter. In the first quarter of 2026, Entegris, Inc. (NASDAQ:ENTG) reported sales of $812 million, a 5% year-over-year increase, which was above the midpoint of its guidance range. While we acknowledge the potential of Entegris, Inc. (NASDAQ:ENTG) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered Entegris, Inc. (NASDAQ:ENTG) and shared a list of best AI stocks to buy and hold for the next 5 years. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors. READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years. Disclosure: None. This article is originally published at Insider Monkey.

Entegris delivered an upbeat second quarter, with notable outperformance compared to Wall Street’s expectations and a sharply positive market reaction. Management attributed these results to surging AI-driven demand across the semiconductor supply chain and improved operational execution. CEO David Reeder highlighted double-digit growth in both unit and capital expenditure-driven businesses, emphasizing the company’s strategic positioning in advanced logic, high-bandwidth memory (HBM), and advanced packaging, and called out record liquid filtration results as a key driver of growth. Is now the time to buy ENTG? Find out in our full research report (it’s free). Revenue: $883.2 million vs analyst estimates of $837.4 million (11.5% year-on-year growth, 5.5% beat) Adjusted EPS: $0.93 vs analyst estimates of $0.82 (13% beat) Adjusted EBITDA: $250.7 million vs analyst estimates of $231.5 million (28.4% margin, 8.3% beat) Revenue Guidance for Q3 CY2026 is $920 million at the midpoint, above analyst estimates of $880.8 million Adjusted EPS guidance for Q3 CY2026 is $1 at the midpoint, above analyst estimates of $0.94 Operating Margin: 18.6%, up from 13.4% in the same quarter last year Inventory Days Outstanding: 138, up from 136 in the previous quarter Market Capitalization: $22.04 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Melissa Weathers (Deutsche Bank): Asked for clarity on timing and magnitude of CapEx-driven business growth. CEO David Reeder explained that most CapEx benefit in 2026 will come from wafer fab equipment, with larger contributions from fab construction expected in 2027. Yiling Sun (Citi): Inquired about the drivers of margin improvement and baseline for future gross margins. CFO Sukhi Nagesh identified operational efficiencies and increased direct labor, noting intentional investment ahead of demand to unlock additional capacity. Timothy Arcuri (UBS): Questioned whether strong gross margin flow-through rates were sustainable or impacted by one-time items. Nagesh explained that, aside from a useful life adjustment, margin gains were driven by operational improvements and should see continued incremental flow-through. Bhavesh Lodaya (BMO Capital Markets): Requested more detail on regional sources of liquid filtration growth and the status of the KSP facility. Reeder noted that advanced node capacity in Taiwan was a significant driver and that KSP is on track for breakeven performance. James Schneider (Goldman Sachs): Asked about the company’s evolving sales strategy and plans for advanced packaging market penetration. Reeder highlighted a new enterprise sales approach targeting deeper product line coverage and increased focus on advanced packaging opportunities. In the next few quarters, the StockStory team will be watching (1) the pace and execution of new fab construction and advanced node ramp-ups, (2) evidence that operational improvements continue to drive margin expansion, and (3) further progress in portfolio optimization and customer engagement—especially in advanced packaging and HBM memory. The company’s ability to convert backlog into revenue and sustain free cash flow will also be key metrics. Entegris currently trades at $143.48, up from $125.20 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 9:00 a.m. ET Vice President, Investor Relations - Jeffrey Schnell President and Chief Executive Officer - Dave Reeder Chief Financial Officer - Sukhi Nagesh Operator: Welcome to the Entegris Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Jeffrey Schnell, Vice President, Investor Relations. Please go ahead, sir. Jeffrey Schnell: Good morning, everyone. Earlier today, we announced the financial results for the second quarter of 2026. Before we begin, I would like to remind listeners that our comments today will include some forward-looking statements. These statements involve a number of risks and uncertainties, and actual results could differ materially from those projected in the forward-looking statements. Additional information regarding these risks and uncertainties is contained in our most recent annual report and subsequent quarterly reports that we have filed with the SEC. Please refer to the information on the disclaimer slide in the presentation. On this call, we will also refer to non-GAAP financial measures as defined by the SEC in Regulation G. You can find reconciliation tables in today's news release as well as on the IR page of our website at entegris.com. Joining me on the call today are Dave Reeder, our CEO; and Sukhi Nagesh, our CFO. With that, I'll hand the call over to Dave. David Reeder: Thanks, Jeff, and good morning. The second quarter was another strong quarter for Entegris as we continued to capitalize on accelerating AI-driven demand and the significant and growing investment across the semiconductor ecosystem. We exceeded our guidance ranges on all metrics. Revenue growth of 11% year-over-year was above our guidance range, driven by double-digit growth in both our unit and CapEx-driven businesses. Gross margin improved sequentially as our operational initiatives gained momentum and strong free cash flow generation further enhanced our balance sheet and financial flexibility. Our performance reflects both improving market conditions and our focused efforts to strengthen and invest in our core semiconductor businesses. With these investments and our continued execution, Entegris is well positioned to accelerate growth, expand profitability and drive long-term shareholder value. Unit-driven revenues grew 10% in the second quarter. Technology transitions continue to increase the material content required to manufacture at the leading edge. This increased intensity is visible in the strong growth in liquid filtration, CMP in particular pads, advanced deposition materials and selective etch chemistries. Notably, liquid filtration delivered its fourth consecutive record quarter. CapEx-related revenue increased 15% year-over-year in the second quarter, driven by significant growth in FOUPs and broad-based strength in gas filtration and purification solutions. We continue to see customers accelerate investments to support AI infrastructure with increasing activity across advanced logic, HBM memory and advanced packaging ecosystems. Bookings across our CapEx-oriented businesses strengthened throughout the quarter, driving backlog levels higher and providing greater visibility into customer spending plans. We believe these trends reflect the early stages of a broader semiconductor investment cycle, one that should benefit Entegris through both the construction phase and the subsequent ramp to high-volume manufacturing. With increasing visibility into accelerating customer demand, we are proactively scaling ahead of the market, unlocking capacity, expanding capabilities and strengthening supply chain readiness. As demand continues to build across areas such as filtration, specialty coatings, FOUPs and CMP, the visibility we have enables us to identify emerging constraints early and take targeted actions to increase throughput and unlock additional capacity before they become limiting. Leveraging our existing global footprint and prior capacity investments, we are well positioned to meet customer needs, support technology road maps and capitalize on the opportunities ahead. Turning to profitability. Adjusted gross margin was another highlight of the quarter, exceeding our guidance range and reaching its highest level since early 2022. The improvement reflects stronger operational execution and the benefits of actions we have taken over the past several quarters to simplify and optimize the business. We also continue to sharpen our strategic focus and footprint during the quarter. Given the significant and increasing semiconductor demand, we decided to exit our Life Sciences Fluid Management business in the U.S., concentrating resources on our core semiconductor businesses. Additionally, we announced plans to close our Logan, Utah facility, our third dilutive facility rationalization since late 2025, further streamlining our manufacturing footprint without impacting availability for our core semiconductor market. These combined actions underscore our disciplined approach to portfolio management and our commitment to concentrating resources in area where we have the greatest opportunities for long-term growth, differentiation and value creation. Free cash flow was another highlight of the quarter, reaching $120 million or 14% of sales. This performance was driven by higher earnings and disciplined working capital management, resulting in a greater than 10% year-over-year improvement in our cash conversion cycle. The strength of our cash generation enabled us to repay an additional $200 million of debt and reduce net leverage to 3.4x. Given our improved earnings trajectory and cash flow outlook, we now expect to end the year with net leverage in the high 2x range while continuing to invest for growth. Turning to the outlook for our end markets. Based on current demand trends, we now expect 7% to 8% MSI growth in 2026 versus the mid-single-digit assumption we started out with at the beginning of the year. While our expectations for advanced logic and memory remain largely unchanged, we expect a mixed but modestly improving environment for mainstream logic contributing to a more constructive outlook for the industry. The most notable change since last quarter has been the continued acceleration in semiconductor capital spending. Momentum in both wafer fab equipment and fab construction is strengthening, as evidenced by increasing project awards and backlog growth. To put this in perspective, we are currently tracking over 20 major leading-edge capacity expansions globally, including approximately 8 to 10 advanced logic facilities, 7 to 8 advanced memory facilities and 6 to 8 advanced packaging projects. We expect these investments to become a more meaningful contributor to our growth in the second half of 2026 and into 2027. The breadth of these investments is also a leading indicator of future MSI growth and reinforces our confidence in the durability of the industry's growth and the expanding opportunities for Entegris. Breaking down the specific components of our end market mix. Advanced logic, which represents approximately 40% of our revenue remains a significant growth opportunity as demand for leading-edge compute accelerates technology migrations and increases semiconductor complexity, playing directly into Entegris's strengths. We are already seeing this translate into strong results, including double-digit growth in Taiwan, driven by both advanced node capacity expansions and higher production volumes. We also increased [indiscernible] wins tied to EUV lithography and continued to see strong demand for FOUPs, reflecting our expanding content opportunity at the industry's most advanced nodes. With positions of record at the industry's most advanced nodes and a strong innovation pipeline, we are well positioned to accelerate growth as customers continue to scale next-generation AI infrastructure. Memory, which represents approximately 30% of our revenue, remains a compelling growth opportunity driven by AI-related demand and favorable technology road maps. Similar to advanced logic, increasing memory complexity, tighter process tolerances and growing performance requirements are driving greater need for the high-purity materials and solutions where Entegris is differentiated. In DRAM, increasing investment activity is providing greater visibility into future capacity expansions and production road maps. In NAND, technology transitions and layer scaling continue to support higher output and improving demand trends, which we expect to lead to additional capacity investments. These dynamics reinforce our confidence in the long-term growth outlook for memory and the expanding role Entegris plays as a critical enabler of advanced semiconductor manufacturing. Recent HBM4 and TSV and CMP wins, along with approximately 2x year-over-year growth in molybdenum precursor demand, are further evidence that increasing memory complexity is translating into greater content opportunities for Entegris across next-generation AI memory architectures. And lastly, mainstream logic remains mixed, and while modestly improved compared to last quarter, it continues to lag leading-edge markets. To summarize, the next phase of semiconductor investment cycle is underway, supported by healthy unit demand and accelerating capital investment activity, creating multiple growth vectors for Entegris through the second half of 2026 and into 2027. Second, our technology leadership positions across key product lines, including CMP and selective etch processes, filtration and purity solutions and FOUPs, combined with our growing presence at the industry's most advanced technology nodes, continue to strengthen our competitive advantage, increase our strategic importance to customers and provide additional content opportunity. Finally, execution remains a key differentiator. We are expanding capacity and margins, strengthening cash generation, simplifying the portfolio and enhancing [indiscernible] financial flexibility, while proactively investing in next-generation products to meet increasingly stringent customer demands and capture future growth opportunities. These trends reinforce our confidence in Entegris' long-term growth algorithm of above-market growth and margin expansion. Our technology leadership expanding advanced node exposure and disciplined execution are positioning Entegris to become the foundational materials platform underpinning the build-out of global AI compute infrastructure. Our strong results this quarter are a direct reflection of the dedication and execution of our employees around the world. Their commitment to serving customers, advancing innovation and operating with discipline continues to differentiate Entegris. With that, let me turn the call over to Sukhi to discuss the financials. Sukhi Nagesh: Thanks, Dave, and good morning, everyone. I'm thrilled to be joining Entegris at such an exciting time for the company and the industry. The combination of market leadership in technology, strong customer partnerships and significant growth opportunities ahead reinforces my confidence in the long-term potential of the business, and I look forward to working with the team to help unlock that potential. Q2 sales were $883 million, an increase of 11% year-over-year and above our guidance range. Our GAAP net income was $94 million, and our adjusted net income was $143 million, an increase of 42% from a year ago. Both top and bottom line metrics were above the high end of guidance. Gross margin on a GAAP and non-GAAP basis was 47.6%. The sequential improvement reflected continued progress in operations even as we continue to invest for growth. We have increased our factory direct labor a double-digit percentage from Q4 that will help unlock additional capacity. We expect to build on this momentum as the year progresses. Operating expenses on a GAAP basis were $255 million in Q2 and $204 million on a non-GAAP basis or approximately 23% of sales. The majority of the year-over-year increase is driven by higher variable compensation associated with the stronger business performance. Adjusted EBITDA in Q2 was $251 million or 28.4%, also above our guidance range as the benefit of higher gross profits flowed through. The GAAP tax rate in Q2 was 15% and the non-GAAP tax rate was 16%. GAAP diluted EPS was $0.61 per share in the second quarter and non-GAAP EPS was $0.93 per share. Now switching to our segments. Material Solutions delivered second quarter sales of $371 million, up 5% year-over-year, driven by advanced deposition materials, selective etch chemistries and CMP. Growth in Material Solutions accelerated from the first quarter, and we expect the MS segment to deliver double-digit year-over-year growth in the second half of 2026, benefiting from increased demand across deposition, CMP, etch and implant materials product lines. MS adjusted operating margin was 20.9%, in line with the prior year. Higher raw material and logistics costs, together with planned investments in direct labor associated with customer demand were largely offset by improved manufacturing performance and productivity initiatives across the segment. APS delivered Q2 sales of $515 million, up 17% year-over-year, driven by strength across both unit-driven and CapEx-related demand. Liquid filtration had its fourth consecutive record quarter. Our microenvironments business, led by FOUPs delivered its strongest performance in more than 3 years. Demand was strong in Taiwan due to expansions in leading-edge logic and advanced packaging capacity. We also saw a return to year-over-year growth in North America. APS is benefiting from multiple growth drivers. We are seeing increasing demand tied to higher wafer starts, advanced node transitions and accelerating semiconductor capital spending. These trends are creating opportunities across the portfolio that should persist throughout this year and beyond. Adjusted operating margin for our APS segment was 30.3% for the quarter, expanding both year-over-year and sequentially. This performance reflects volume growth, favorable mix, continued improvements in operational execution, more than offsetting costs and investments we are making for the customer demand. Now switching to cash flow and the balance sheet. We delivered free cash flow of $120 million in the second quarter or 14% of sales, reflecting higher earnings, lower capital spending and continued working capital improvements. We reduced our cash conversion cycle by approximately 20 days year-over-year and repaid an additional $200 million of debt in the quarter. As a result, net leverage improved to 3.4x, and we now expect to end the year below 3x. Moving on to the details of our third quarter outlook. We expect Q3 sales to range between $905 million and $935 million, a year-over-year increase of approximately 14% at the midpoint, reflecting continued momentum in the industry. Gross margin is expected to be between 47.5% and 48.5%, both on a GAAP and a non-GAAP basis, marking another improvement from Q2 and more than 400 basis points of expansion year-over-year. At the midpoint, we expect GAAP operating expenses of approximately $260 million and non-GAAP operating expenses of approximately $215 million, reflecting higher variable compensation and investments to support the growth we are seeing across our portfolio. At the midpoint, we expect Q3 EBITDA margin to be 28.5%, net interest expense of approximately $43 million and a non-GAAP tax rate of approximately 15%. We expect GAAP EPS between $0.75 and $0.83 per share and non-GAAP EPS between $0.96 and $1.04 per share. And we expect depreciation to remain largely stable for the balance of this year at approximately $34 million per quarter. Looking ahead to our fourth quarter revenue expectations. With our current visibility, we expect revenue to grow approximately 4% from the midpoint of third quarter's guidance range, which represents mid-teens percentage growth year-over-year. Finally, I'd like to update a few modeling items for the full year 2026. We expect net interest expense to be approximately $180 million, the non-GAAP tax rate to be approximately 14% and diluted share count of approximately 154 million for the full year and CapEx of $250 million. We entered the second half with strong momentum. Since joining Entegris, I have spent considerable time with our global teams and have seen the strength of our technology, market position and people. My near and midterm priorities are to deliver profitable growth, help drive operational excellence and allocate capital with discipline. Before turning the call over to questions, I'd like to mention that we will be hosting our Investor Day on November 9 in New York City. We look forward to sharing a more detailed view of our AI materials platform strategy, technology road map and long-term financial framework. Seating will be limited and by invitation only. Registration information will follow in the coming days. The event will also be webcast live for those unable to attend in person. With that, operator, let's open the line for questions. Operator: [Operator Instructions] And our first question will come from Melissa Weathers with Deutsche Bank. Melissa Weathers: A lot to talk about. I guess for my first question on the fab CapEx outlook. I was just hoping you could talk a little bit more about what you're expecting in terms of your CapEx-oriented business. We're seeing a lot of fabs get built out. So just trying to think about how you guys are -- how we should be modeling that business second half of this year and into the first half of next year. That would be helpful. David Reeder: Melissa, thanks for the question. As a reminder, 75% of our revenue is driven by wafer starts and 25% by CapEx. Within CapEx, 10% is driven by WFE and 15% by fab construction. So tactically, for 2026, as you'd expect, we're seeing the greatest uplift in our CapEx business from WFE. With our WFE order rates up at a growth rate that's very similar to the growth rate that's being reported by the WFE market, so call it 20% to 30%. We are seeing some benefit from increased fab construction in 2026, but the majority of that benefit will actually accrue to 2027, not into the second half of '26. So thematically, second half of '26 CapEx revenue driven by strong WFE growth, call it, low double-digit, very low double-digit fab growth and 7% to 8% unit growth. 2027 will benefit from much stronger fab construction growth, followed again by WFE as those fabs are populated with tools, which will then be followed again by increased wafer unit growth that those tools process wafers. Also, I'd point out that I mentioned in my prepared commentary, we're currently tracking 20 leading-edge capacity expansions in the markets. That's about 8 to 10 in advanced logic, 7 to 8 in advanced memory and 6 to 8 in advanced packaging. So our teams are encouraged by the industry backdrop, and we're working very diligently to ensure that we've got supply positioned to deliver to our customers. Did you have a follow-up, Melissa? Melissa Weathers: Yes, I did. Maybe I'll first, welcome, Sukhi, to the call. I guess, Sukhi, from the couple of months that you've now been in the seat, anything that stood out to you? Any strategic priorities that you've been working on? And it was really helpful to hear about some of the rationalizations in the business exit that you talked about. So any strategic priorities that we should be looking forward to ahead of the Analyst Day? Sukhi Nagesh: Yes. Thanks, Melissa. Look, I mean, it's less than a quarter that I've been here and my first impressions really is like the technology that we have here is critical. First and foremost, I'm incredibly impressed with the technology of the company. Very few companies can deliver the innovation and the materials science that Entegris can provide, be it on the Purity Solutions side or on the Advanced Materials solutions side. Second, what comes to mind here is that we have pretty strong positions in the fastest-growing areas of the technology space in semis, especially. And third, we have ample room to optimize and get the full entitlement out of the portfolio of assets that we have here. So those are my first impressions here being in the seat for less than a quarter. So with that backdrop, at least what comes to me in mind is like my near-term priorities are pretty clear. We need to help drive profitable growth, further enhance the operational excellence and efficiencies of our assets and deploy capital in a manner where we get the best return for every dollar spent. Operator: Our next question will come from Elizabeth Sun with Citi. Yiling Sun: I guess my first question is for the full year, it's good to see your guiding Q3 and Q4 both up like 4% sequentially. I guess for the full year, are you still on track -- on track to your target model of outperforming the market by 3 to 6 points? And what would be the driver to the upside to the full year outlook? David Reeder: Sure. Let me take that one, Elizabeth. And Sukhi, if you have any follow-up, please build on the commentary. For third quarter, at the midpoint of our guidance, we're essentially guiding up mid-teens. That implies more than 10% growth, both in MS and in APS. And so what you're seeing is you're seeing the business accelerate, 5% year-over-year growth in first quarter going to 11% year-over-year growth for the second quarter, moving up to mid-teens year-over-year growth for the third quarter. So that's the guidance through the third quarter. Given our increased order visibility in our backlog, we did want to give you at least some improved visibility for fourth quarter, very similar to what we did in last quarter. We guided fourth quarter up sequentially about 4%. We'll tighten up that guidance when we get to our third quarter call. But based upon what we currently see, even that would be up mid-teens on a year-over-year basis, again, with MS and APS both growing more than 10%. So what we're seeing is we're seeing the business accelerate. We're seeing both businesses accelerate from the first half of the year into the second half of the year. And given all the activity, both in fab construction as well as more than 50 engineering engagements in new projects, we think that bodes well for 2027 as well. Did you have a follow-up, Elizabeth? Yiling Sun: Yes. Thanks for the color. And on gross margin side, it's good to see your Q2 is above the guidance. So my first question is, what's the upside in the Q2 gross margin? And then in Q3, it's nice to see you are touching 48%. Just I'm not asking for like a new target model, but like from this point, you are talking about your operational efficiency improvements, factory rationalization. So I'm just curious what is the kind of baseline gross margin we should think of at this point? David Reeder: Yes. Let me maybe take the big picture and Sukhi, maybe you can color in some of the details. Look, we're very excited about the potential of our product portfolio. I saw here in third quarter last year, and I spoke about how we had a tremendous amount of untapped capacity in the network. I talked about how we were driving kind of 4 things operationally, the network optimization, the centralization of procurement, improved focus on yield and then a maniacal focus on productivity. And so when you think about all of those activities that you've seen us kind of consistently drive now for 3 quarters, we're actually making very good progress across all of those initiatives, including closing another dilutive facility -- or announcing the closure, I should say, of another dilutive facility. So we're very, very pleased with the progression, and we think we have significant room to continue to grow from here. Sukhi, do you want to talk about some of the specific dynamics Q1 to Q2 and then Q2 to Q3? Sukhi Nagesh: Yes. Look, I mean, our gross margin improved 70 basis points sequentially. And I think it's also important to note that we delivered pretty strong incrementals despite intentionally investing ahead for demand. So the -- that should show some proof points that we're on the right track here. The underlying business continues to benefit from productivity and operational improvements and our ability to drive structurally higher margins and flow-through as we continue to scale. Look, I think underlying business continues to benefit from all of this, and I think we'll be in a position to drive structurally higher margins through the cycle. David Reeder: So, those are good points, Sukhi. And if I could just maybe build on one comment that you had. We are investing ahead so that we can unlock that capacity that I mentioned across the network. For example, we've increased direct labor by more than 20% since the end of 2025, again, investing ahead of the capacity and the products that will be delivered in the future quarters. So we're making good progress to unlock really the capacity that exists in our manufacturing network. Operator: Our next question will come from Timothy Arcuri with UBS. Timothy Arcuri: I don't know, Dave, if you or Sukhi want to take this. But I guess my question is on the gross margin [indiscernible]. So you dropped through between 70% and 75% year-over-year in June. The guidance for September is 75%, 80% drop through. Are there any one-timers in there? Like I guess the question is, is that a reasonable drop-through to use? Because I don't see any reason why you should be growing -- like a year from now, you should be growing any less than what you're growing now. So if I use the same kind of mid-teens, you should be -- and I use that kind of drop through, your gross margin should be in the 52% range a year from now. So I guess the question is like, are there any one-timers helping your drop-through right now? And is that a fair sort of [indiscernible] to use. Sukhi Nagesh: Yes. Thank you for that question. Look, I think on a year-over-year basis, there was about 150 basis points of uplift because of the useful life adjustment that we had. And so if you take that off, we did also increase margins by more than 300 basis points, excluding that. So as you look forward into next year, I think what you would -- we'll give you an update on more of our target model at Capital Markets Day. But typically, I think what you should be seeing is like -- incremental flow-through should be in the 60% range. Dave, do you want to add anything there? David Reeder: Tim, look, we think the right comps would be from Q1 to Q2, we had nice flow-through gross profit over revenue of around 60%. It's a similar number at midpoint from second quarter to third quarter sequentially. That takes out any kind of year-over-year dynamics related to useful life. So we think that's probably the best comp as you model out into the future. Timothy Arcuri: Okay. I do, I do. So Sukhi, just on the Q4 guidance, it's -- I mean, up 4% is only really in line with kind of normal seasonal for Q4. So it still seems a little conservative. I mean you guys are doing great, don't get me wrong, but up 4% still seems a little light. Are there anything -- any like dynamics that you call out in Q4? Sukhi Nagesh: No, that's a good question. Look, I mean, it's important to put the guidance in context, Tim. Look, a 4% sequential increase in Q4 would still translate to a mid-teens year-over-year growth, represents a pretty healthy growth rate and reflects our continued momentum across our businesses. When you consider our composition of revenue, right, 75% of our revenue tied to semi unit growth, we expect to grow, but -- that's expected to grow by 7% to 8%. The remainder is tied to capital spending. So our outlook implies a meaningful outperformance relative to the underlying semi market. This is again supported by content gains we're seeing, technology transitions and our exposure to some of the leading-edge pure-play AI enablers. Dave, do you wanted to add something to that? David Reeder: Well said. Operator: Our next question will come from Bhavesh Lodaya with BMO Capital Markets. Bhavesh Lodaya: Maybe on the strong -- maybe on of the strong growth that you are seeing in liquid filtration, could you add some more color as to maybe the regions that this is coming from? Is it new fab capacity or just higher operating rates? And if you could comment, is KSP playing a role in this as well? David Reeder: Sure. When you look at liquid filtration, as -- when you think about how important micro-contamination is to the most advanced nodes, and once you get down to sub-5-nanometer and down to 2-nanometer, I mean, 2-nanometer is 20 angstroms. And depending on the size of the molecule, you can have molecules that are 5 angstroms. And so purity is becoming increasingly critical at the most advanced nodes of manufacturing. And so you've seen liquid filtration kind of grow disproportionately as more production capacity is added to the most advanced nodes. And that's true. The most in advanced logic, but it's also becoming increasingly true across memory and in limited examples across advanced packaging as well. So as the market expands capacity at the most advanced nodes, it drives tighter requirements that drives a greater need for filtration. With respect to operating -- in the operating sites like KSP, we produce the majority of our filters kind of across 3 sites, one in North America, one in Japan and obviously, KSP in Taiwan. KSP, I would categorize as on track. We are on track perhaps to break even this quarter, probably a little bit ahead of schedule. But KSP, I would color green, and I would count that as on track for 2026. We're through a lot of the qualifications. There's still more to come, but we're basically now into the ramping stage of KSP. And when you think about ramping KSP, you're going from essentially a facility that was losing money on a stand-alone unit of one basis to essentially what would be kind of breakeven touchwood here in the third quarter, certainly in the second half of this year. And then as we move and migrate into 2027, it will move into the dilutive category and then ultimately into the enterprise average gross margin category. So making good progress, and I would color KSP as being on track, and it is participating in some of the liquid filtration ramp that we've spoken about. Did you have a follow-up, Bhavesh? Bhavesh Lodaya: Yes, please. And great to hear on KSP. For a follow-up, Dave, you have mentioned before that the business is around $1 billion of incremental sales capacity without adding like more plants or more capacity there. Is it possible to break that $1 billion between the consumable side and the CapEx exposed part of the business? My guess is given how the CapEx business has performed over the last few years, you probably have more capacity than the 25% mix that you have for your business. David Reeder: I actually don't have the breakdown off the cuff between units and CapEx. What I did mention last year was that we had significantly greater than $1 billion. So I wouldn't just limit it to $1 billion of incremental capacity in the network. It's more than that. It is broad-based. It is across units and CapEx. I don't know that split off the cuff. But I can tell you, as I sit here today, we have increasing confidence that we can satisfy the vast majority of the demand that we see in front of us with the current manufacturing network with limited capital investments from here. So we have to do some things. We have to spend some money ahead to unlock that capacity. But by and large, we believe that we can satisfy the current demand that we have visibility to through the current manufacturing network. Operator: Our next question will come from Jim Schneider with Goldman Sachs. James Schneider: Clearly, the outlook for WFE growth continues to get more constructive for 2027. I think, Dave, you referenced the fact that your CapEx-related business, given the fab construction profile could start to outpace -- the construction piece could actually outpace growth next year. So I'm wondering what are some of the reasons why your CapEx-related business, that portion of the business would or would not exceed WFE growth for 2027? David Reeder: It's really just the timing, Jim. If you think about the 25% of our business that is CapEx, 10% of it is WFE driven, 15% of it is fab construction driven. We don't get revenue on time 0 of a fab construction. So we don't get revenue when you kind of move dirt, pour concrete, place steel. We get revenue kind of 12 months post that once you start facilitizing the fab, then we get another slug of revenue as you're taking that process piping to tools, then we get another slug of revenue with the tools, with the placement of those tools. And then finally, we get the unit volume at the end. So kind of a slug of revenue, let's call it round and call it, 12 months, another slug of revenue around 18 months, WFE around 24 months and units thereafter. And so really, the fab construction piece, given all the fabs that we're currently tracking, assuming that they move into the construction build-out and tooling stage, we think timing-wise that you kind of migrate from second half of '26 being more WFE driven to perhaps '27 being a bit more fab construction driven towards the end, maybe a bit more WFE. WFE continues to be strong, obviously, but then you start to get units out probably in '28. So we think we kind of have these 3 waves of demand, if you will. James Schneider: That's very helpful color. And then maybe as a follow-up, Dave, when you took over as CEO, I think you sort of referenced the fact that you would be looking at different elements of strategy, including your sales strategy and maybe thinking about entering parts of the market or being more aggressive in parts of the market where you hadn't been previously. Can you maybe give us sort of an update on the overall sales strategy now? David Reeder: Sure. We have an enterprise sales team now that sits at the corporate level which tracks all of our opportunities across kind of our top 35 customers, which represent the largest portion of our business. We've looked at all of those customers. We've tracked our product line placements within each one of those customers and have developed very detailed plans specific customer by customer to then go forth and kind of penetrate those accounts in greater volume with also more product line coverage. So that's the high-level kind of sales strategy that's somewhat different than what we had done historically. In terms of portions of the markets that we're interested in, we're going to color in the lines a little bit more at Capital Markets Day. So we hope to see you in November at Capital Markets Day. But we've talked about, for example, advanced packaging, that's an area where historically, the company has not played in a significant way. We've always been more front end of line focused in the fab. As you know, advanced packaging is growing incredibly quickly. There are some portions of that market that are not as attractive to us, but there are also some portions of that market that are attractive to us. We have about $100 million runway, plus or minus in that portion of the market today. That's an area that we would like to see our business grow more quickly as well as have more product placement across categories in that portion of the market. So we'll color in more of the lines at Capital Markets Day, but an enterprise sales strategy, customer by customer plan across all product lines, not just a few product lines, deep customer engagements from an R&D perspective, more than 50 projects in flight. And then, of course, some attractive SAMs that are growing quickly, example being advanced packaging that we're looking to penetrate a little bit more deeply in the future. And with that, maybe I'll end it there, and we can color in more of those lines at Capital Markets Day. Operator: Our next question will come from Charles Shi with Needham. Yu Shi: Maybe the first question, by now -- I mean, a lot of your customers' customers or maybe customers, fab customers are signing LTAs, et cetera, securing pricing with the customers, bigger customers. But wondering from a materials perspective, from your perspective, any opportunity for your industry to really think about maybe you should sign LTA as well and maybe you should discuss pricing with those customers and maybe capture what's the fair value for companies like Entegris? David Reeder: Thanks, Charles. We do have some supply agreements with our customers. I would say we've been approached more recently to engage in more supply agreements given the current demand environment, and that's an area that we're certainly looking at very closely, not only from a pricing perspective, but just from a supply perspective. Our #1 business priority at this stage is to make sure that we can support our customers through this period of accelerating demand. We will ensure that we are appropriately compensated for the value capacity and technology that we provide. But our #1 priority right now is making sure that we can unlock the manufacturing network that I've spoken so much about and then be able to get that fixed cost absorption, get that volume and provide the products that our customers desperately need as they engage in their ramps. As I mentioned, we're currently tracking more than 50 engineering projects with customers. These are long-term engagements. There's more than 20 advanced fabs that are being built. And so while our guidance today doesn't contemplate material pricing, we are confident that we will be compensated for the value that we bring. Did you have a follow-up, Charles? Yu Shi: Yes. Thanks, Dave, for the color on pricing on LTA and all those stuff. I want to ask you a product question. I know -- I mean, from time to time asking a question about the single product is kind of tough. But for what it's worth, moly has been a focal point in a lot of the investor discussion for whatever it's worth again. But we are -- we've been hearing from some of the equipment companies that at least there's a third equipment company entering the moly deposition, at least in the memory space. I want to get your thoughts on overall moly growth, what you are seeing today going into next year? And more importantly, it looks like now it 3 OEM equipment companies in the race, are you agnostic relative to the puts and takes of the market share among those 3? David Reeder: Yes. Thanks, Charles. Look, moly, we haven't -- we have not seen in the wild, the third entrant in a meaningful way as of yet. It's largely a 2-horse race. As we see it right now, obviously, we're staying close to this market. Moly is up significantly on a year-over-year basis. I don't have the exact number in front of me for second quarter, but I think the number was more than 20% on a year-over-year basis, up in the second quarter. Memory volumes are starting -- and I'm referring to NAND, are starting to grow to kind of the high 200s or the 300-plus layer count, which is what's driving that need for moly. We believe we are very well positioned there. We have -- moly is a -- it's a unique and a novel chemistry, and it's a new chemistry for the memory market. It's a chemistry where you not only have to deliver a delivery cabinet that has very stable pressure with a molecule that is incredibly aggressive from a process piping perspective, but you have to sublimate a solid into a gas and deliver it at pressure and at temperature to get the right performance out of the memory process. So we're very -- with our position, we think overall, it probably doubles for us on a year-over-year basis, '26 versus '25 and we're happy with the performance and the hard work the team is doing. Operator: Our next question comes from John Roberts with Mizuho. John Ezekiel Roberts: Maybe you could back up a little bit and tell us where you are overall in your footprint optimization program. You took a couple of actions in the quarter, but put that in perspective for us in terms of what's to come. David Reeder: Sure. Let me maybe broaden it out and talk a little bit about what are we trying to drive overall for manufacturing and operations. We have network optimization, which is the rationalization that you referenced. We have centralizing procurement, which is driving more leverage throughout our total procurement supply chain. We have maniacal focus on driving yield, reducing scrap, improving throughput through those activities. And then, of course, productivity and productivity is measured across both people as well as machines and tooling. And so those are kind of the 4 very high-level work streams that we have been working on now for almost a year coming up on a year. We're making good progress across all of those. All of those have meaningful potential to expand gross margin or expand profitability while driving like reduced future capital investments. So increasing units driving increased profitability by using the same kind of fixed footprint. So those are the big efforts. In terms of additional rationalization, demand remains strong. We mentioned that demand increased materially in the middle of the first quarter and that we were taking a little bit of a pause on rationalization until we determined exactly where that demand signal settled. Demand increased again in the second quarter. And so I'll kind of play back the commentary from the first quarter that we're going to kind of carefully evaluate right now where this demand signal settles because right now, the demand profile is continuing to increase from a level that we thought was already elevated in Q1. So no additional plans at this time for incremental network optimization. We still have roughly 35 manufacturing facilities. We will utilize them all to the fullest extent. And then to the extent that we see opportunities in the future, we'll come back and update you at that time. Did you have a follow-up? John Ezekiel Roberts: Yes. And then as the balance sheet continues to improve, how are you thinking about bolt-on M&A? There's still a fair amount of white space across your customers' needs. David Reeder: Yes. Sukhi, feel free to chime in on this, if you'd like. Sukhi Nagesh: Sure. I mean, our immediate near-term focus really is on reducing our leverage. We have a clear path, right? I mean, so as we mentioned in our prepared remarks, we will get to under 3x net leverage by the end of this year. In fact, we are actually -- in the month of July, we repaid another $25 million of debt. So that still remains our top priority. But overall, look -- I mean, the way we look at investments here is relative to our cost of capital. We'll look at internal investments and the return we get from that -- those type of investments. And then we look at CapEx-related investments. And then finally, external M&A. Each one of them has different risk profiles to it. But we'll be looking at each one of these areas with the view of actually getting the right type of return for each of the investments. David Reeder: And if I could just build on something that I'm incredibly excited about. The rate and pace of deleveraging is happening significantly faster than I expected. I never anticipated that I could sit here on this call today here in August and be able to tell you that we expect to end the year with a net leverage ratio that starts with a 2. That was an expectation that I did not have starting this year. And so the team has done a great job driving expansion in gross margin. They've taken that gross margin all the way down to net income and even better, they've taken it all the way down through free cash flow through a lot of the work that's been done on the working capital side. And so I expect that great work to continue. The reward for good work is even more work. And we're going to work very, very hard in the second half of this year to continue to drive free cash flow to reduce -- continue to reduce our leverage. And then as we do that, it opens up a lot of opportunities, as Sukhi mentioned. Operator: Our next question comes from Mike Harrison with Seaport Global. Michael Harrison: One of your competitors today suggested that they think they're seeing some share gains in CMP slurries and cleans. I was hoping that you could talk a little bit about how you're seeing the competitive environment within CMP and whether you think you're encountering any share shift one way or the other? David Reeder: We feel good about our CMP business. We've got nice growth rates in CMP. We actually think that we have some very market-leading growth rates in pads. We think we're successfully growing, expanding and defending plans of records in slurries. And so when you look at our CMP business overall, we're quite pleased with that trajectory, including some of the inroads into advanced packaging that weren't in place a year ago. So overall, we feel good about our CMP business. And as we mentioned, MS is a business that's accelerating as we go through the course of this year, expecting more than 10% growth in the third quarter, implying more than 10% of growth again in the fourth quarter. And so very happy with the MS business overall and then specifically with the CMP business. Did you have a follow-up? Michael Harrison: Yes. My follow-up is specific to the molybdenum business. You talked a little bit about that -- the growth that you're seeing there. But I'm curious, you've talked in the past about the need to optimize the CMP solution as well as selective etch and maybe some of the filtration components around that. Are you seeing that customers are adopting that full optimized suite from Entegris? Or are they picking and choosing different suppliers for the different aspects of molybdenum deposition, etch and CMP? David Reeder: Look, specifically for molybdenum and -- the majority of the envelope tends to sit around the distribution cabinet that I mentioned and the actual molecule itself. The other portions of that process, as you mentioned, both the etch as well as some of the follow-on processes, those are, by and large, separate buying centers today. Operator: Our next question comes from Chris Parkinson with Wolfe Research. Christopher Parkinson: Just in terms of what you're expecting in the second half on a sequential basis, both 3Q and 4Q, can you just hit on your expectation for mainstream operates in the second half of the year and then as well as HBM as it pertains to memory? Just any color there would be greatly appreciated. David Reeder: Yes. Mainstream demand remains mixed. There's memory-related pressure on some of the consumer markets, but that's offset by strength in some of the AI-related applications like power management and silicon photonics. So we see mainstream as improving, but still somewhat mixed because obviously, there's a lot of consumer-related markets, mobile being a great example that sit within mainstream and the memory pressure on those markets not to be discounted. We think foundry utilization in the mainstream has improved to probably 80% to 85%, depending exactly on which mainstream provider you're looking at. But I do agree, I think the direction of travel seems to be modestly higher. So I think our view on it is just that it's slightly improved compared to last quarter, but we still expect it to be tempered and below the trend growth for 2026 and potentially longer pending the outcome of memory pricing and availability. Did you have a follow-up, Chris? Christopher Parkinson: Yes. Just a quick one actually. Just can you just give a little extra framework on the businesses in Life Sciences that you are now out of in terms of just the optics on a segment level if you have them available? David Reeder: Yes. So Life Sciences, the business we exited, think of it as less than $20 million of annual revenue. Think of it as being more like fluid management type products. So we still have some filtration products for life sciences. That business is still ongoing. Think of this as more fluid management in Life Sciences. It did have a dilutive margin, both gross margin as well as a significantly dilutive EBITDA margin. And so given the tremendous growth in semiconductors and management time, effort and focus, it made sense for us at this time to announce the closing of that business and the wind down of that stand-alone facility. Operator: Our final question for today comes from Edward Yang with Oppenheimer. Edward Yang: Welcome Sukhi. Nice quarter. On the MS side, it's great to see you guiding for double-digit growth in the second half, but it was a bit below industry MSI in the second quarter. And I just wanted to close the loop on that. Was that just timing? And the segment margin there was also down year-over-year. Do you expect margins in MS to expand in the second half as well? David Reeder: Yes. I'll talk about the growth, and Sukhi, maybe you can comment on the margins. But for MS, yes, it grew 5% year-over-year in the second quarter. MSI probably grew around 7% to 8% in the second quarter, depending on what numbers you're looking at in the market and making sure that you account for the wafer shippers versus actual wafer starts. We think we were in line given some of the year-over-year comps related to Liberation Day last year and some of the pull forward that we saw in that business. So I would say that we grew in line with market for the MS business for second quarter. And we think based on current visibility that we will most likely grow above market in the third quarter and the fourth quarter as well. Sukhi, do you want to comment on the margins? Sukhi Nagesh: Yes. Look, on the margin side, as manufacturing here becomes really complex and customers continue to migrate to advanced nodes. The number of opportunities that the company has is continuing to expand. And we're seeing that in the -- reflected in the growing set of SAM opportunities across the portfolio. So as you would expect, we are investing accordingly in areas where we see significant long-term growth in the MS division, and that includes capabilities such as moly precursors and other high-value opportunities. So operating leverage we're generating right now is being intentionally -- we are seeing intentional reinvestment to support future growth and that you should see that earnings power start to increase over time. David Reeder: Edward, did you have a follow-up? Edward Yang: Yes, I do. So Dave, coming back to your comments around advanced packaging and I understand you'll provide more detail on the Analyst Day. But it didn't sound like you're interested in acquiring a bigger footprint there. So I was just wondering how quickly you could scale that business organically from that $100 million revenue run rate? David Reeder: Well, we never said that we won't comment on acquisitions either way, but we never said we weren't interested in looking at some businesses in that space. I think when we look at the advanced packaging market, though, it's still being defined. So even today, you still have changes in materials, you have changes in packaging sizes, you have changes in like real substantive technical changes with respect to thermal expansions, conductivity, attach. So there's a lot that's still -- to be defined in the space. And it's a very rapidly growing space. 5 years ago, it was very low single digits as a percentage of CapEx in the industry. And this year, it may be approaching double digits or approaching 10% in terms of percentage of total industry CapEx. So we think there are a lot of growing SAMs. We think there are a lot of SAMs that can support the type of differentiated products that we can provide. And those are the spaces that we want to target. And we think there's more than enough opportunity to target those spaces and still have the right to win without necessarily facing the incumbent advantage. So stay tuned for more during Capital Markets Day, and appreciate the question, Edward. Operator: Thank you. This concludes today's Entegris Second Quarter 2026 Earnings Conference Call. Please disconnect your line at this time, and have a wonderful day. Before you buy stock in Entegris, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Entegris wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Entegris (ENTG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Entegris (ENTG) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving. The upward trend in estimate revisions for this maker of equipment used in chip manufacturing reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. Consensus earnings estimates for the next quarter and full year have moved considerably higher for Entegris, as there has been strong agreement among the covering analysts in raising estimates. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: The earnings estimate of $1.04 per share for the current quarter represents a change of +44.4% from the number reported a year ago. Over the last 30 days, three estimates have moved higher for Entegris compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 12.13%. For the full year, the company is expected to earn $3.91 per share, representing a year-over-year change of +42.2%. The revisions trend for the current year also appears quite promising for Entegris, with five estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 7.62%. Thanks to promising estimate revisions, Entegris currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. Entegris shares have added 5.8% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Entegris, Inc. (ENTG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Entegris (ENTG) stock is in focus after the company reported second quarter 2026 results, with sales of US$883.2 million and net income of US$93.6 million, alongside fresh guidance for the second half. See our latest analysis for Entegris. The strong Q2 update and higher guidance have come alongside sharp price swings, with Entegris’s 7 day share price return of 36.02% standing out against a 62.52% share price return year to date and a 1 year total shareholder return of 102.21%. This suggests that momentum has recently accelerated after a period of more mixed shorter term moves. If you are looking for other semiconductor related opportunities around AI driven demand, it could be worth scanning a curated list of 56 AI infrastructure stocks After a 36% jump in just a week, Entegris now forces a timing decision. Is it better to accept today’s post results price or wait and hope valuation terms become more forgiving again? Entegris closed at $145.55, while the most followed narrative anchors fair value at $165.00. That gap rests on specific growth and margin assumptions rather than sentiment alone. Read the complete narrative. Read the complete narrative. Want to see what is built into that $165.00 fair value? The narrative leans on faster earnings growth, firmer margins, and a richer future profit multiple. The detailed assumptions show how those pieces fit together without relying on today's P/E alone. Result: Fair Value of $165.00 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Entegris still faces meaningful risks, including elevated gross debt near US$4b and its heavy exposure to cyclical semiconductor demand across Asia-based customers. Find out about the key risks to this Entegris narrative. The narrative pins Entegris at $165.00, yet the current P/E of 72.8x is far above both the US Semiconductor industry at 54.8x and an estimated fair ratio of 36.5x. That kind of gap lifts valuation risk. If sentiment cools, does the share price move first, or does the ratio adjust? See what the numbers say about this price — find out in our valuation breakdown. With Entegris attracting both optimism and concern, it makes sense to look through the underlying data yourself and move quickly to form an independent view. To balance the upside potential with the issues investors are watching, start by weighing its 1 key reward and 3 important warning signs. Do not stop with Entegris. The same tools that surfaced this stock can help you quickly shortlist other candidates that fit the kind of portfolio you want to build. Target potential mispricings by scanning 51 high quality undervalued stocks that combine stronger fundamentals with more modest expectations baked into the current share price. Strengthen your downside protection by reviewing 79 resilient stocks with low risk scores that screen well on resilience and risk scores before you commit fresh capital. Get ahead of the crowd by researching a screener containing 17 high quality undiscovered gems that may not yet be widely followed but already show solid underlying metrics. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ENTG. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Entegris, Inc. ENTG reported second-quarter 2026 non-GAAP earnings of 93 cents per share, up 40.9% year over year. The figure beat the Zacks Consensus Estimate of 83 cents by 12.05%, reflecting stronger semiconductor demand, operational execution and accelerating customer capital investment. Net sales increased 11.5% to $883.2 million and topped the consensus estimate of $840 million by 5.16%. Unit-driven revenues rose 10%, while capital expenditure-related revenues advanced 15%, supported by AI-linked investments across advanced logic, memory and packaging. Entegris surpassed the Zacks Consensus Estimate for earnings thrice in the trailing four quarters while matching the same on one occasion, the average surprise being 5.17%. Entegris, Inc. price-consensus-eps-surprise-chart | Entegris, Inc. Quote Advanced Purity Solutions revenues climbed 17% year over year to $514.6 million. Growth reflected strength across both unit-driven and capital expenditure-related demand, with liquid filtration delivering a fourth consecutive record quarter. The microenvironments business, led by front-opening unified pods, posted its strongest performance in more than three years. Taiwan benefited from leading-edge logic and advanced packaging expansions, while North America returned to year-over-year growth. Adjusted segment margin expanded to 30.3% from 24.1%. Materials Solutions revenues rose 4.6% year over year to $371.3 million. Advanced deposition materials, selective etch chemistries and chemical mechanical planarization products drove the increase. Adjusted segment profit was $77.7 million, up 2.9%, while adjusted segment margin eased to 20.9% from 21.3%. Higher raw-material and logistics costs, along with planned direct-labor investments, were largely offset by manufacturing improvements and productivity initiatives. Adjusted gross margin expanded to 47.6% from 44.6% a year earlier and improved from 46.9% in the first quarter. Management attributed the sequential gain to operational progress despite investments to support future demand. Non-GAAP operating expenses increased 8.3% year over year to $203.9 million, mainly due to higher variable compensation tied to stronger business performance. Even so, adjusted operating margin widened to 24.5% from 20.9%, and adjusted EBITDA margin rose to 28.4% from 27.3%. The company generated operating cash flow of $156.2 million in the second quarter, while capital expenditures were $39.3 million. Free cash flow totaled $120.3 million in the second quarter, representing roughly 14% of sales and more than doubling from $47 million in the year-ago quarter. In the first half of 2026, Entegris generated operating cash flow of $339.2 million and free cash flow of $263.8 million. ENTG repaid $200 million of debt during the quarter, reducing long-term debt to $3.46 billion. It ended the second quarter with cash and cash equivalents of $353.6 million. The company’s net leverage improved to 3.4 times, and management now expects leverage to finish 2026 below three times. Management raised its 2026 market expectation to 7%-8% growth in million square inches of wafers, up from the mid-single-digit assumption at the start of the year. The outlook reflects stable advanced logic and memory expectations, along with a modestly improving mainstream logic environment. The company is tracking more than 20 major leading-edge capacity expansions globally, including advanced logic, advanced memory and advanced packaging projects. Bookings strengthened during the quarter, lifting backlog and increasing visibility into customer spending plans through the second half of 2026 and into 2027. Entegris is also investing ahead of demand by expanding factory direct labor and unlocking capacity within its existing manufacturing network. Management believes most visible demand can be served with the current footprint and limited additional capital investment. For the third quarter of 2026, Entegris expects sales between $905 million and $935 million. GAAP earnings are projected in the range of 75-83 cents per share, while non-GAAP earnings are forecast between 96 cents and $1.04. The company expects an adjusted EBITDA margin of 28%-29% and an adjusted operating margin of 24.2%-25.1%. Management also sees fourth-quarter revenues rising about 4% from the midpoint of third-quarter guidance, which would represent mid-teens year-over-year growth. For 2026, ENTG expects net interest expense of approximately $180 million, a non-GAAP tax rate of about 14% and capital expenditures of $250 million. The share count is projected at roughly 154 million. Entegris currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader Zacks Computer and Technology sector are AppFolio APPF, Amkor Technology AMKR and Amphenol APH, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Shares of AppFolio have plunged 14.2% year to date. The Zacks Consensus Estimate for AppFolio’s 2026 earnings is pegged at $6.90 per share, up by 2.2% over the past 30 days, indicating an increase of 30.4% year over year. Shares of Amkor Technology have jumped 41.5% year to date. The Zacks Consensus Estimate for Amkor Technology’s 2026 earnings is pegged at $2.62 per share, up by 17.5% over the past seven days, calling for a rise of 74.7% year over year. Amphenol shares have rallied 26.8% year to date. The Zacks Consensus Estimate for Amphenol’s 2026 earnings is pegged at $5.25 per share, up by 7.8% over the past seven days, implying an increase of 57.2% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Entegris, Inc. (ENTG) : Free Stock Analysis Report Amphenol Corporation (APH) : Free Stock Analysis Report Amkor Technology, Inc. (AMKR) : Free Stock Analysis Report AppFolio, Inc. (APPF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Entegris, Inc. ENTG entered the second half of 2026 with management emphasizing that accelerating AI-driven semiconductor investment is broadening growth opportunities across both wafer production and capital equipment markets. The company's leadership highlighted improving visibility into customer spending, expanding margins and stronger cash generation as key themes from the quarter. The company reported non-GAAP earnings per share (EPS) of $0.93, which beat the Zacks Consensus Estimate of $0.83. Revenues of $883.2 million surpassed the consensus mark of $839.9 million. Entegris, Inc. price-consensus-eps-surprise-chart | Entegris, Inc. Quote Chief executive officer David Reeder said that the quarter reflected both improving semiconductor demand and accelerating AI-related investments across advanced logic, high-bandwidth memory (HBM) and advanced packaging. Reeder noted that unit-driven revenues increased 10% year over year while CapEx-related revenues climbed 15%, supported by strength in liquid filtration, CMP products, FOUPs and gas filtration solutions. Liquid filtration posted its fourth consecutive record quarter, while bookings strengthened throughout the quarter, increasing backlog visibility. Management also raised its outlook for 2026 semiconductor market growth, now expecting 7% to 8% MSI growth compared with the mid-single-digit assumption held at the beginning of the year. Reeder said that Entegris is proactively expanding manufacturing capacity ahead of demand while simplifying its operating footprint. During the quarter, the company exited its U.S. Life Sciences Fluid Management business and announced plans to close its Logan, UT, facility, marking the third facility rationalization since late 2025. Management said that these actions allow greater focus on semiconductor markets while improving long-term profitability. The company also reported adjusted gross margin of 47.6%, its highest level since early 2022, supported by operational improvements and productivity initiatives. Free cash flow reached $120 million, allowing repayment of $200 million in debt and reducing net leverage to 3.4 times. Chief financial officer Sukhi Nagesh guided third-quarter revenues to $905 million-$935 million and projected non-GAAP EPS of $0.96-$1.04. Management also expects gross margin of 47.5% to 48.5% and adjusted EBITDA margin of 28%-29%. Looking beyond the third quarter, executives said that fourth-quarter revenues should increase roughly 4% sequentially from the midpoint of third-quarter guidance, implying mid-teens year-over-year growth. Nagesh added that the company now expects to finish 2026 with net leverage below three times while continuing to invest in manufacturing capacity and operational improvements. A Deutsche Bank analyst asked about the outlook for CapEx-driven revenues. Reeder explained that wafer fab equipment should drive most of the second-half growth, while benefits from fab construction are expected to become more meaningful during 2027 as projects advance through installation phases. A Citi analyst questioned the sustainability of margin expansion. Reeder and Nagesh pointed to ongoing network optimization, procurement improvements, yield enhancements and productivity gains while noting that the company continues investing ahead of customer demand by increasing factory labor capacity. Management also reiterated confidence that manufacturing capacity can support anticipated demand with relatively modest incremental capital spending. Questions from Goldman Sachs and Oppenheimer centered on long-term strategy and advanced packaging opportunities. Reeder described a companywide enterprise sales initiative focused on expanding product penetration across major semiconductor customers while identifying additional opportunities in advanced packaging. He estimated the company's current advanced packaging business at roughly a $100 million annual run rate and said that additional details will be presented during the November Investor Day. Management also discussed continued strength in molybdenum precursor demand, HBM-related applications and advanced-node filtration, all of which are benefiting from increasing semiconductor complexity driven by AI workloads. Throughout the earnings call, executives consistently emphasized execution rather than aggressive expansion. Management highlighted improving cash conversion, continued debt reduction, disciplined capital allocation and operational efficiency as priorities while maintaining confidence in above-market long-term growth supported by advanced-node semiconductor demand. The company also indicated that balance sheet improvement is occurring faster than previously anticipated, creating additional financial flexibility over time. ENTG currently carries a Zacks Rank #2 (Buy), reflecting favorable earnings estimate revisions relative to the broader market. However, the Zacks Rank can change as analysts revise estimates following the latest quarterly results. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Among the Style Scores, ENTG has a Growth Score of B, indicating relatively attractive growth characteristics, while its Value Score of D suggests weaker value attributes. The Momentum Score of C and VGM Score of C indicate more balanced characteristics across value, growth and momentum rather than a clear strength in all three categories. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Entegris, Inc. (ENTG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Entegris Inc (NASDAQ:ENTG) exceeded its guidance ranges on all metrics in Q2 2026, with revenue growth of 11% year-over-year, driven by double-digit growth in both unit-driven and CapEx-driven businesses. The company achieved its highest adjusted gross margin since early 2022, reflecting stronger operational execution and the benefits of portfolio simplification and optimization actions. Free cash flow generation was strong at $120 million (14% of sales), enabling the repayment of an additional $200 million of debt and reducing net leverage to 3.4 times, with expectations to end the year below 3 times. Demand is accelerating across the semiconductor ecosystem, with the company tracking over 20 major leading-edge capacity expansions globally, providing strong visibility into future growth through 2027. The company is seeing strong technology-driven content gains, including record liquid filtration quarters, approximately two times year-over-year growth in molybdenum precursor demand, and strong FOOPS performance, positioning it well for above-market growth. Entegris Inc (NASDAQ:ENTG) decided to exit its life sciences fluid management business in the US, which was a dilutive margin business, indicating a strategic shift away from non-core operations. The company announced plans to close its Logan, Utah facility, its third diluted facility rationalization since late 2025, which involves restructuring costs and operational disruptions. Mainstream logic demand remains mixed and continues to lag leading-edge markets, with pressure from consumer-related segments like mobile, tempering overall growth expectations. Material Solutions segment growth was below the industry MSI growth in Q2, and its adjusted operating margin was flat year-over-year due to higher raw material costs and planned investments in direct labor. The company's Q4 2026 revenue guidance of approximately 4% sequential growth is seen as conservative by some analysts, potentially reflecting caution despite strong momentum. Warning! GuruFocus has detected 4 Warning Signs with ENTG. Is ENTG fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more detail on the fab CapEx outlook and how we should model your CapEx-oriented business for the second half of this year and into the first half of next year? A: Dave Reeder, CEO: 75% of our revenue is driven by wafer starts and 25% by CapEx, split between 10% WFE and 15% fab construction. For 2026, we are seeing the greatest uplift from WFE, with order rates growing 20% to 30%, in line with the WFE market. The majority of fab construction benefits will accrue to 2027. In the second half of 2026, we expect low double-digit WFE growth, very low double-digit fab growth, and 7% to 8% unit growth. We are currently tracking over 20 leading-edge capacity expansions, including 8-10 advanced logic, 7-8 advanced memory, and 6-8 advanced packaging projects. Q: For the full year, are you still on track to outperform the market by 3 to 6 points, and what could drive upside to the full-year outlook? A: Dave Reeder, CEO: Our Q3 guidance implies mid-teens year-over-year growth, with both Material Solutions and APS growing more than 10%. We are seeing the business accelerate from 5% growth in Q1 to 11% in Q2, moving to mid-teens in Q3. For Q4, we guided up about 4% sequentially, which would still be mid-teens year-over-year growth. Both businesses are accelerating from the first half into the second half, supported by strong fab construction activity and more than 50 engineering engagements in new projects. Q: What drove the upside in Q2 gross margin, and what is the baseline gross margin we should think of going forward? A: Dave Reeder, CEO & Suki Nagesh, CFO: Gross margin improved 70 basis points sequentially, reaching its highest level since early 2022. This was driven by operational initiatives including network optimization, centralized procurement, improved yield, and productivity focus. We are intentionally investing ahead for demand, increasing direct labor by more than 20% since the end of 2025. Suki Nagesh noted that excluding a one-time useful life adjustment, margins increased by more than 300 basis points year-over-year. The company expects incremental flow-through to be in the 60% range going forward. Q: Is the Q4 guidance of up 4% sequentially too conservative given the strong momentum? A: Suki Nagesh, CFO: A 4% sequential increase in Q4 would still translate to mid-teens year-over-year growth, reflecting continued momentum. With 75% of revenue tied to semi-unit growth expected to grow 7% to 8%, our outlook implies meaningful outperformance relative to the underlying semi-market, supported by content gains, technology transitions, and exposure to leading-edge AI enablers. Q: Can you provide more color on the strong growth in liquid filtration, including regional drivers and the role of KSP? A: Dave Reeder, CEO: Liquid filtration delivered its fourth consecutive record quarter, driven by increasing microcontamination requirements at advanced nodes below 5nm and down to 2nm. Growth is strongest in advanced logic but is also increasing in memory and advanced packaging. KSP in Taiwan is on track, potentially breaking even in Q3, ahead of schedule. We are through many qualifications and entering the ramping stage, with expectations to move into the diluted category in 2027 and ultimately reach enterprise average gross margins. Q: Can you break down the $1 billion of incremental sales capacity between consumables and CapEx-exposed parts of the business? A: Dave Reeder, CEO: I don't have the exact split off the cuff, but the incremental capacity is significantly greater than $1 billion and is broad-based across both units and CapEx. We have increasing confidence that we can satisfy the vast majority of demand with our current manufacturing network with limited capital investments, though we need to spend some money ahead to unlock that capacity. Q: What are the reasons your CapEx-related business would or would not exceed WFE growth for 2027? A: Dave Reeder, CEO: It's really about timing. We don't get revenue at time zero of fab construction. We get revenue about 12 months post-construction start, another slug at 18 months when process piping is connected to tools, WFE revenue around 24 months, and unit volume thereafter. So we see three waves of demand: second half of 2026 being more WFE-driven, 2027 being more fab construction-driven, and units likely coming in 2028. Q: Can you provide an update on the overall sales strategy and any new market opportunities? A: Dave Reeder, CEO: We have an enterprise sales team tracking opportunities across our top 35 customers with detailed customer-by-customer plans for product line penetration. We are focusing on advanced packaging, an area where we historically haven't played significantly. We have about $100 million revenue run rate in that market today and want to grow it more quickly with more product placements. We have more than 50 engineering projects in flight and will provide more detail at Capital Markets Day in November. Q: Are you seeing opportunities to sign long-term agreements (LTAs) and capture fair value for materials companies like Entegris? A: Dave Reeder, CEO: We have been approached more recently to engage in more supply agreements given the demand environment. Our number one priority is supporting customers through accelerating demand. We will ensure we are appropriately compensated for the value, capacity, and technology we provide. While current guidance doesn't contemplate material pricing, we are confident we will be compensated for the value we bring. Q: Can you provide an update on the molybdenum (MOLY) business, including competitive dynamics and growth expectations? A: Dave Reeder, CEO: We have not seen a third entrant in MOLY deposition in a meaningful way yet; it remains largely a two-horse race. MOLY is up more than 20% year-over-year in Q2, driven by NAND memory volumes growing to 300+ layers. We are well positioned with our unique delivery cabinet and sublimation technology. We expect MOLY to roughly double on a year-over-year basis in 2026 versus 2025. Q: Where For the complete transcript of the earnings call, please refer to the full earnings call transcript.

(Bloomberg) -- SpaceX’s first earnings report following its blockbuster initial public offering is one of the most anticipated events of the summer on Wall Street. Whether it’ll give investors a reason to buy the sinking stock is another matter. Most Read from Bloomberg Beer Dynasty Families Sell €731 Million Stake in AB InBev Apple’s New CEO Taps Retired Hardware Executive for Management Team Taco Bell Met With Michigan on Parasite Weeks Before Recall Mamdani Dismisses Business Leaders Advising NYC’s Mayor’s Fund S&P 500 Closes Near Record High on US-Iran Hopes: Markets Wrap Elon Musk’s satellite, space and artificial intelligence company went public at $135 in June, and the shares have been on a roller coaster ride ever since, shooting up to $225 in the first days of trading and then plunging below the offering price. They closed Monday at $114.53, down 15% from the IPO and 49% from their high on June 16, erasing more than $1 trillion in market value from that peak. Earnings will give investors a chance to reassess the stock. The problem is SpaceX isn’t profitable and has a very speculative business at this point, so the results may end up raising more questions than they answer. With the shares still trading at a sky-high valuation despite the selloff, it will be difficult to entice new buyers. “There is so much that’s in the future of the SpaceX story, so much that hasn’t been done yet, or ever, so there’s nothing to make you comfortable,” said Drew Cupps, portfolio manager and head of the 5Perspectives Growth Team investment group at Polen Capital, which owns a small position in the company. “There’s not a lot of here and now. There’s no, look at last year to justify what you should pay now.” To make matters even more challenging for the stock, a flood of fresh SpaceX shares also is about to hit the market, as the first of many lockups that ban early investors from selling expires two days after the earnings report. As many as 911.5 million SpaceX shares worth more than $100 billion will be released on Aug. 6. And that’s just the start as billions of additional shares will be eligible for trading before the end of the year. All of which will weigh on the stock price simply based on the market’s supply and demand function. “It’s a total mess,” said Ken Mahoney, chief executive officer of Mahoney Asset Management. Wall Street expects SpaceX to report a loss of 24 cents per share in the second quarter on $6.8 billion of revenue. The results have been somewhat of a moving target, however, because so little information about the business is available. Analysts have widened their estimates for the company’s loss by 18% in the past month. “I have very little confidence in those estimates,” said Jim Lebenthal, chief market strategist at Cerity Partners. “I don’t mean this obnoxiously, but I think they’re mostly licking their fingers and sticking it in the wind.” What investors and analysts will primarily be looking for is management’s comments on the company’s progress with AI, Starlink and its rocket launch business. “We don’t have concrete earnings power that would be analogous to other parts of the market, but we do have a visionary set of massively capable assets that are in some cases unrivaled over all others,” said Polen Capital’s Cupps. SpaceX’s results come on the heels of a strong run of earnings reports from big AI spenders, including Alphabet Inc., Microsoft Corp. and Amazon.com Inc. Investors are particularly rewarding companies that are showing clear payoffs from their capital expenditures. For example, shares of Amazon and Microsoft surged following the companies’ results. With a market capitalization of roughly $1.5 trillion, SpaceX rivals the size of many megacap tech firms and is bigger than Musk’s other company, Tesla Inc. But its financials aren’t close, at least not yet, meaning investors may apply additional scrutiny to its spending plans. Analysts expect the company to report capital expenditures of $18.5 billion in the quarter and $45.5 billion for 2026. The primary issue facing SpaceX shares is their extreme market valuation. The stock trades at about 448 times earnings estimated over the next 12 months, the highest multiple of any member of the Nasdaq 100 Index, and 26 times estimated sales, which is among the 10 highest ratios in the technology-heavy benchmark. That helps explain why the short interest in SpaceX, which measures bearish bets against the stock, jumped to 34% of the company’s float, or the number shares available to trade in the market, from about 18% a month ago, according to data from S3 Partners. There are already more short bets against SpaceX than there are against Tesla. Still, Wall Street remains overwhelmingly bullish on the stock. Of the 39 analysts tracked by Bloomberg who cover the company, 30 have buy ratings. And few have backtracked on their extravagant predictions from when SpaceX went public. Raymond James analyst Brian Gesuale is sticking with his call for the shares to reach $800 within the next 12 months on exponential revenue growth. Adam Jonas at Morgan Stanley recently reiterated his $300 price target and said that shares trading at $100 values the company’s AI business at zero, making this an attractive entry point for investors. And Bernstein’s Douglas Harned is urging investors to ignore the specifics of the earnings report and focus instead on the company’s confidence in the future. “We believe the quarterly results should not matter,” Bernstein analysts led by Harned wrote in a note to clients on Friday. “What will be important is the level of confidence projected by management regarding the company’s growth path. Investors should look beyond short term stock movements as we view the case for a multi-trillion dollar valuation is about ‘if’ not ‘when’, for orbital data center plans.” Tech Chart of the Day Amazon.com Inc. surpassed $3 trillion in market value for the first time, becoming only the fifth company to ever reach the milestone. Top Tech Stories Palantir Technologies Inc. raised revenue and income forecasts for the full year after posting second-quarter sales that far exceeded Wall Street’s estimates, describing commercial demand for its data analytics tools as “otherworldly.” Snap Inc. posted higher-than-projected quarterly sales and gave an upbeat forecast for the current period, signaling optimism ahead of the September commercial debut of its first pair of augmented reality glasses. Grab Holdings Ltd. raised its annual earnings and sales forecasts, a sign that robust demand from Southeast Asian commuters is helping to absorb impact of higher fuel prices stemming from the Middle East conflict. Apple Inc. briefly removed the Telegram messaging app from its App Store after finding content on the platform that violated a ban on child sexual abuse material. China is growing anxious that Anthropic PBC’s Mythos could be wielded against the world’s second-biggest economy, adding a volatile new issue to already heightened tensions before a planned summit between Xi Jinping and Donald Trump. Earnings Due Earnings Premarket: Earnings Postmarket: --With assistance from Subrat Patnaik and David Watkins. Most Read from Bloomberg Businessweek Americans Are Rethinking Their Love Affair With Plant Milks A Wall Street Troll Reinvented Himself as the Groypers’ Pick for Governor. The GOP Can’t Get Rid of Him Trump’s Arctic Mining Deal Signals a New Era of State Capitalism Tokenmaxxing Is Dead. Now Comes the Belt Tightening Why Wall Street Is Getting Angry ©2026 Bloomberg L.P.