ENTEGRIS INC Q4 FY2024 earnings call

Bertrand Loy: Highlighted strong Q4 performance with revenue up 11% year on year excluding divestitures, above guidance. Full-year revenue grew over 5% excluding divestitures and currency, outperforming the market by 4%. Material Solutions had strong growth in CMP consumables, advanced deposition, and selective etching chemistries. APS had flat sales in 2024. Mentioned debt reduction, progress in the Kaohsiung, Taiwan facility and Colorado site. Linda LaGorga: Discussed Q4 sales of $850 million, up 11% year on year excluding divestitures. Gross margin 45.6% in Q4. Operating expenses, adjusted EBITDA, and EPS details. Mentioned CapEx plans at ~10% of sales, free cash flow goals, and Q1 2025 outlook with sales range $775M-$805M.

Material Solutions division: In Q4, sales were $361 million, up 14% year on year excluding divestitures. The largest contributors were CMP consumables, advanced deposition materials, and etching chemistries. For the full year, sales were up 11% excluding divestitures, with CMP slurry revenue growing 14% and CMP pads growing 24%. Advanced Purity Solutions (APS) division: Q4 sales were $491 million, up 9% year on year and 6% sequentially. Driven by fluid handling, wafer handling, and gas purification. For the full year, sales were flat due to difficult comparisons from the 2023 backlog.

For 2025, expect sales to be approximately $3.4 billion at the midpoint of the guidance range, up ~6.5% on a pro forma basis. EBITDA is expected to be slightly above the target model or just over 29% of revenue, and non-GAAP EPS to be at or above $3.25. The market is expected to grow 1-3% with Entegris outperforming by 4-5 points. Includes $30-40M annual revenue loss from China restrictions. Q1 2025 sales range $775M-$805M, gross margin 45.5%-46.5%, EBITDA margin 28%-29%.

Impact of China restrictions leading to $30-40M annual revenue loss in 2025. Supply chain risks, including previous issues with HCL and valves though mostly resolved. Tariff impacts on raw materials, though immaterial.

Q: Market outlook and outperformance, A: Bertrand discussed wafer starts and CapEx assumptions, outperformance drivers.

Q: Working capital optimization, A: Linda talked about EBITDA leverage and working capital optimization.

Q: March quarter guidance, A: Bertrand and Linda discussed segment performance and seasonality.

Q: Advanced packaging momentum, A: Bertrand discussed growth in advanced packaging.

Q: CMP drivers and FX impact, A: Bertrand and Linda discussed CMP growth and FX hedging.

Q: CapEx and market assumptions, A: Bertrand and Linda discussed CapEx and market visibility.

Q: China restrictions impact, A: Bertrand discussed revenue loss and China as growth market.

Q: Wafer starts and MSI, A: Bertrand explained wafer start vs MSI disconnect.

Q: 2026 file performance, A: Bertrand discussed future opportunities in 3D NAND.

Q: China business split, A: Bertrand discussed advanced logic vs mainstream in China.

Q: Margin cadence and SiC, A: Linda and Bertrand discussed margin cadence and SiC growth.