Breaking Down Entegris, Inc. (ENTG) Financial Health: Key Insights for Investors

You're looking at Entegris, Inc. (ENTG) and seeing a mixed signal, and honestly, you're defintely right to pause. The company just delivered a solid third quarter for 2025, hitting net sales of $807.1 million and non-GAAP diluted earnings per share (EPS)-which is a cleaner view of core profitability-of $0.72, right in line with their own guidance. But here's the rub: management's outlook for the critical fourth quarter is what's unsettling the market, with sales guidance set cautiously between $790 million and $830 million, and non-GAAP EPS expected to range from $0.62 to $0.69. That softer guidance, plus persistent concerns about gross margin pressure, is why the stock saw a dip despite the Q3 beat. The core story-that their materials science is vital for next-generation semiconductors-is still intact, but the near-term cyclicality in the logic and memory markets is a real headwind. We need to map this short-term risk against the long-term opportunity, especially with analysts predicting full-year 2025 non-GAAP EPS around $3.51.

Revenue Analysis

You need to know where Entegris, Inc. (ENTG)'s money is coming from right now, and the headline is that while the trailing twelve months (TTM) revenue is holding steady, the quarter-to-quarter picture is a fight between advanced materials and capital expenditure (CapEx) slowdowns.

As of September 30, 2025, the company's TTM revenue stood at a solid $3.223 Billion. This represents a marginal year-over-year increase of only 0.59%, which tells you the semiconductor market's recovery is still uneven. The company's net sales for the third quarter of 2025 (Q3 2025) were $807.1 million, a negligible decrease of 0.1% compared to Q3 2024, reflecting the ongoing global trade challenges and reduced semiconductor market demand.

The Two-Pillar Revenue Structure

Entegris, Inc. currently operates with two primary business segments, and understanding their split is crucial. The revenue streams break down into what I call 'consumables' (Materials Solutions) and 'infrastructure' (Advanced Purity Solutions and other products). In Q3 2025, the Materials Solutions (MS) segment was the bright spot for growth, even as the overall market felt pressure.

Here's the quick math on the Q3 2025 revenue split:

• Materials Solutions (MS): This segment, which sells high-purity chemicals, deposition materials, and chemical mechanical planarization (CMP) consumables, brought in $348.6 million. That's a 1% year-over-year increase.
• Advanced Purity Solutions (APS) & Other: This includes products like liquid filtration, purification, and fluid handling solutions. Their implied revenue for Q3 2025 was approximately $458.5 million (calculated as $807.1M total net sales minus $348.6M MS net sales).

This means the MS segment contributed about 43.2% of the total Q3 2025 net sales, while APS and other solutions made up the remaining 56.8%. The MS segment's growth is defintely tied to the most advanced logic and memory nodes, which are still seeing strong investment, particularly from AI-driven applications.

Near-Term Revenue Shifts and Outlook

The biggest change in the revenue profile is the bifurcation between unit-driven and CapEx-driven sales. Unit-driven revenue-meaning sales tied to the actual production volume, such as CMP slurries and liquid filtration-grew year-on-year in Q3 2025, with liquid filtration even hitting record quarterly sales. But, the CapEx-driven revenue, which is tied to new fab construction and equipment spending (like FOUPs and fluid handling in the APS division), declined in the high single digits year-over-year. That's a clear signal of the industry pausing on new factory builds while still using more advanced materials for existing production.

Also, don't forget the structural change from the divestiture of the PIM business, which impacted the nine-month net sales by a loss of $33.9 million. Looking ahead, management's guidance for Q4 2025 net sales is a range of $790 million to $830 million, suggesting a flat-to-slightly-up sequential performance as the market stabilizes. To understand the strategic foundation behind these numbers, you should review the Mission Statement, Vision, & Core Values of Entegris, Inc. (ENTG).

Profitability Metrics

You want to know if Entegris, Inc. (ENTG) is turning its strong market position into bottom-line cash, and the short answer is yes, but with a recent squeeze on the gross margin. For the trailing twelve months (TTM) ending September 30, 2025, Entegris, Inc. reported total revenue of $3.223 billion. The net income for that same period was $0.288 billion, translating to a TTM net profit margin of approximately 8.94%. That's a defintely solid jump from the prior year's reported 5.7%, showing the company's efforts to improve profitability are working.

Gross, Operating, and Net Margins

The real story for investors is in the quarterly trend, which reveals a near-term challenge in operational efficiency. While the overall net margin is up, the most recent quarter shows pressure on the core business. In the third quarter of 2025 (Q3 2025), the GAAP gross margin fell to 43.5%, down from 46.0% in Q3 2024. This decline is a red flag for cost management and plant performance (utilization rates), which is something you need to watch closely. The adjusted operating margin (a non-GAAP measure, but useful for operational view) for Q3 2025 also compressed to 21.1%, down from 23.0% a year earlier.

Here's the quick math on the recent margin picture:

• Gross Margin (Q3 2025): 43.5% (Signaling cost-of-goods-sold pressure).
• Adjusted Operating Margin (Q3 2025): 21.1% (Showing higher operating expenses relative to sales).
• Net Profit Margin (Reported Oct 2025): 9.2% (Strong annual improvement, but quarterly trends are soft).

Industry Profitability Comparison

To put Entegris, Inc.'s figures into context, we look at the wafer fab equipment space. Comparing Entegris, Inc. to a major peer like Applied Materials (AMAT) for their fiscal year 2025 highlights where Entegris, Inc. stands. Applied Materials reported a GAAP gross margin of 48.7% and a GAAP operating margin of 29.2% for FY 2025. Entegris, Inc.'s margins are clearly lower, which is typical for a specialty materials supplier versus a capital equipment giant, but it also shows the ceiling for operational improvement.

The gap suggests that while Entegris, Inc. has a sticky, high-purity product line, its cost structure or pricing power is not yet on par with the industry's top-tier equipment manufacturers. This is a key factor when considering the long-term growth potential. You can learn more about who is betting on this growth in Exploring Entegris, Inc. (ENTG) Investor Profile: Who's Buying and Why?

Operational Efficiency and Cost Management

The recent gross margin decline is directly attributed to lower plant performance, which points to under-utilization or ramp-up delays in new manufacturing clusters. This is a temporary headwind, but it's a critical management focus. Analysts anticipate a rebound, projecting Entegris, Inc.'s profit margins to climb from the current 9.2% to 12.9% over the next three years, based on expected operational improvements and cost-cutting initiatives. The key action for management is to execute on these cost controls and fully utilize its expanded capacity. Until then, gross margin will remain the most sensitive indicator of operational health.

Debt vs. Equity Structure

You're looking at Entegris, Inc. (ENTG) and wondering if their growth is funded by a healthy mix of debt and equity, or if they're leaning too hard on borrowed money. The quick takeaway is that Entegris is a highly leveraged company right now, but that leverage is intentional and is being actively reduced.

The company's capital structure is still heavily influenced by the 2022 acquisition of CMC Materials, a deal valued at $6.5 billion, which was funded primarily with debt. This strategic move significantly expanded their market footprint but also spiked their leverage. As of the third quarter of 2025, Entegris, Inc.'s long-term debt stood at $3,843 million, with total gross debt around $4 billion as of early July 2025.

Here's the quick math on their financing mix:

• Total Gross Debt (approx. July 2025): $4.0 billion
• Shareholders' Equity (Q3 2025): $3,890.8 million
• Debt-to-Equity Ratio (Nov 2025): 1.04

A Debt-to-Equity (D/E) ratio of 1.04 means for every dollar of shareholder equity, the company has $1.04 in debt. This is defintely a high ratio, especially when you compare it to the median D/E ratio for the 'Semiconductors and Related Devices' industry, which was around 0.57 in 2024. Entegris, Inc. is operating with roughly twice the financial leverage of its median peer. That's a risk, but it's a calculated one stemming from their major acquisition.

The good news is that management is executing a clear deleveraging strategy. You see this in the recent debt paydown: shortly after the second quarter of 2025, Entegris, Inc. paid down $50 million of its term loan from cash on hand. This is a concrete sign that cash flow is being prioritized to reduce the debt load incurred from the acquisition. This active management of the balance sheet is crucial for investors who are concerned about the cost of servicing that debt, especially with interest rates still elevated.

The balance between debt and equity here is not a steady-state; it's a transition. The company used debt to finance a major, transformative growth step-the acquisition-and is now using operational cash flow to rebalance toward equity, which is a common post-M&A playbook. Their focus is on debt reduction to improve their credit profile and free up cash flow for future investments, aligning with their long-term strategy which you can read more about here: Mission Statement, Vision, & Core Values of Entegris, Inc. (ENTG).

Liquidity and Solvency

You want to know if Entegris, Inc. (ENTG) has the cash to cover its near-term bills, and the answer is a solid yes. The company's liquidity position is defintely strong, showing a healthy cushion against short-term obligations, though we still need to keep an eye on the long-term debt structure.

The most telling metrics are the current and quick ratios (acid-test ratio). Entegris, Inc.'s Current Ratio-which compares all current assets to current liabilities-stands at a robust 3.30 for a recent period in 2025. A ratio above 2.0 is generally excellent, meaning the company has over three dollars in liquid assets for every dollar of short-term debt. The Quick Ratio, which excludes inventory to measure the most liquid assets, is also strong at 1.95. Here's the quick math: with Total Current Assets at about $1,696 million as of Q3 2025, and estimated Current Liabilities around $513.94 million, that 3.30 ratio signals ample operational flexibility.

The trends in working capital are also very positive. Management has been laser-focused on efficiency, which drove a significant improvement in cash flow. Specifically, they managed to reduce inventory levels by approximately $50 million in the third quarter of 2025. This reduction is key because it translates directly into better cash flow and a higher quality of current assets. When inventory moves faster, your working capital is healthier.

Looking at the cash flow statements, the picture is one of strong generation and strategic debt management. For the nine months ending September 27, 2025, Cash Provided by Operating Activities (CFO) was a substantial $503.4 million. That's the money coming in from the core business, and it's a record operating cash flow for the quarter. Investing activities resulted in an outflow of $234.5 million, primarily for capital expenditures as the company ramps up new facilities in Taiwan and Colorado.

The financing cash flow trends show a clear priority: debt reduction. In Q3 2025 alone, Entegris, Inc. paid down $150 million of its term loan from cash on hand. This is a clear action that maps to their stated goal of reducing their gross debt, which stood at approximately $3.9 billion at the end of the quarter. The strong operating cash flow is directly funding this deleveraging strategy.

So, what are the potential liquidity concerns? Honestly, the near-term liquidity is a major strength with those high ratios. The real financial consideration is the total debt load. While the company is actively paying it down, the gross debt of $3.9 billion is significant. The strategy is to use the strong free cash flow-which hit a six-year high of $191 million in Q3 2025-to keep chipping away at that principal. They expect their free cash flow margin to be in the low double digits for the full year of 2025, which is a great sign for sustained debt reduction. For a deeper dive into the company's long-term structure, you should read Breaking Down Entegris, Inc. (ENTG) Financial Health: Key Insights for Investors.

• Operating Cash Flow: $503.4 million (9-month 2025).
• Investing Outflow: $234.5 million (9-month 2025).
• Debt Repayment: $150 million (Q3 2025).

Valuation Analysis

You're looking at Entegris, Inc. (ENTG) after a tough year, wondering if the recent stock price slump makes it a buy or if the valuation is defintely still too rich. The direct takeaway is that while the stock has taken a significant hit, its core valuation multiples suggest the market is still pricing in substantial future growth, which is a classic semiconductor-sector tension.

Over the last 12 months leading up to November 2025, Entegris, Inc.'s stock price has dropped by 26.91%, closing recently around the $72.76 mark. This decline is substantial, especially when you compare it to the 52-week high of $112.36. This price action reflects broader cyclical concerns in the wafer fabrication equipment (WFE) market, even as the company's long-term position in advanced materials remains strong. The question is whether the current price fully discounts the near-term weakness.

Here's the quick math on the key valuation multiples (ratios), which tell a story of high expectations:

• Price-to-Earnings (P/E): The trailing P/E ratio sits at 36.22. This is well above the broader market average and signals a premium for a company expected to benefit from the next semiconductor upcycle. But, the forward P/E drops to about 23.50, suggesting analysts anticipate a significant earnings rebound in the coming year.
• Price-to-Book (P/B): With the stock price near $72.76 and a Book Value Per Share of $25.66, the P/B ratio is approximately 2.84. This is a reasonable multiple for a high-quality materials supplier, but it's not a deep-value indicator.
• Enterprise Value-to-EBITDA (EV/EBITDA): This metric, which accounts for debt, is currently 15.17. This multiple is on the higher side for an industrial company, reflecting the capital-intensive nature of the business and the debt incurred from strategic growth initiatives.

The market is clearly giving Entegris, Inc. a growth premium based on its critical role in advanced semiconductor manufacturing. You are not buying a cheap stock; you are buying a strategic asset at a discount to its recent high.

When it comes to returning capital, Entegris, Inc. is not a high-yield play. The annual dividend is a modest $0.40 per share, translating to a dividend yield of about 0.58%. The good news is the dividend is very safe, with a low payout ratio of only 21.06%. This low ratio means the company retains most of its earnings to fund capital expenditures (CapEx) and pay down debt, which is exactly what you want to see in a cyclical growth business. They are reinvesting for the future. You can see more on who is betting on this future in Exploring Entegris, Inc. (ENTG) Investor Profile: Who's Buying and Why?

The analyst community views the stock as a 'Buy' consensus, which is encouraging. Out of the 8 analysts covering the stock, 63% recommend a Strong Buy or Buy, and 38% suggest a Hold. The average price target is set at $99.75, which implies a significant upside from the current price. Still, remember that analysts' targets are often slow to adjust to sharp market downturns, so take that upside with a grain of salt. The key is that the Street believes the long-term growth story is intact, despite the near-term headwinds.

Risk Factors

You're looking for a clear map of the risks to Entegris, Inc. (ENTG), and the immediate takeaway is this: the biggest headwinds are geopolitical trade tensions and the heavy debt load from the CMC Materials acquisition, even as the company executes well in advanced technology segments.

As a key supplier of materials for the semiconductor industry, Entegris is defintely exposed to the cyclical nature of chip demand, but the near-term challenges are more specific. The global trade environment, especially the U.S.-China dynamic, is creating a tangible drag on the top line. For the full 2025 fiscal year, management anticipates that restrictions on sales to China will lower annual revenue by a concrete range of $30 million to $40 million.

Here's the quick math on the near-term financial impacts:

The operational risks are also tied to execution. While the company is making major strategic moves, like building a new facility in Colorado Springs, ramp inefficiencies at new sites in Taiwan and Colorado could still impact short-term gross margins. You've got to watch the gross margin, which was 43.5% (GAAP) in Q3 2025, down from 46.0% a year prior, a drop attributed partly to lower plant performance and tariffs.

The other major financial risk is the debt taken on for the CMC Materials acquisition. As of the third quarter of 2025, the company's gross debt stood at approximately $3.9 billion, with net debt at $3.5 billion. That's a significant figure, and while the company is focused on deleveraging-paying down $150 million of the term loan in Q3 2025 alone-this debt load still creates a high leverage ratio (gross leverage of 4.3x) that limits financial flexibility until more is paid off.

The good news is that Entegris, Inc. is not just sitting on these risks; they are actively working to mitigate them. Their strategy is a classic blend of financial discipline and operational regionalization:

• Regionalizing Supply Chain: They are expanding their manufacturing footprint in Asia, aiming to serve 90% of their China business from Asian sites by the end of Q4 2025 to bypass some trade restrictions.
• Onshoring Critical Production: A $77 million investment, partially funded by the CHIPS Act, is building a Colorado Springs facility to onshoring the production of key components like FOUPs (front-opening unified pods) and liquid filtration systems, which were previously sourced entirely abroad.
• Deleveraging: The company is prioritizing debt reduction, having paid down $625 million in 2024 and continuing that focus into 2025, with no major debt maturities until 2028.
• Innovation as Defense: Increased R&D investment, up 14% in 2024, is driving new product wins in advanced logic and 3D NAND, which increases the company's content per wafer. This is their best defense against competition.

The long-term bet is on their technology leadership in advanced nodes, but you have to keep an eye on the near-term execution of these mitigation plans. You can find more details on the company's performance and valuation in Breaking Down Entegris, Inc. (ENTG) Financial Health: Key Insights for Investors.

Next Step: Check the Q4 2025 results when they are released to see if the revenue and EPS guidance hold up, especially the gross margin figure.

Growth Opportunities

You're looking for a clear path forward with Entegris, Inc. (ENTG), and the story is simple: their future growth isn't tied to the number of chips made, but the complexity of each one. The company is strategically positioned to capture value from the semiconductor industry's most demanding shifts-namely, the push into advanced nodes and the explosion of Artificial Intelligence (AI) and High-Performance Computing (HPC).

This focus means Entegris, Inc. expects to significantly grow its content per wafer, which is the value of their materials and solutions used on each silicon wafer, leading to market outperformance and margin expansion in the coming years. They aim to outperform the broader semiconductor equipment industry's revenue growth by 3 to 6 percentage points, which is defintely a strong target.

The core growth drivers are clear and tied directly to product innovation:

• Advanced Node Transitions: The industry's move to 3-nanometer (nm) and below manufacturing, plus the adoption of 3D packaging and Extreme Ultraviolet (EUV) lithography, requires materials with unprecedented purity.
• AI and HPC Demand: AI chips, which are power-hungry and complex, require a much higher volume of Entegris, Inc.'s ultra-pure chemicals, deposition materials, and contamination-control systems.
• Product Innovations: The company is seeing strong momentum in its Advanced Purity Solutions (APS) and Materials Solutions (MS) segments, specifically in liquid filtration & purification, deposition materials, and Chemical Mechanical Planarization (CMP) consumables.

Future Revenue Growth and Earnings Estimates

Based on consensus estimates for the 2025 fiscal year, the financial outlook reflects this strategic positioning, even with broader market volatility. Analysts project solid top-line growth, though the annual revenue growth rate of 4.99% is slightly below the US Semiconductor Equipment & Materials industry's forecast of 6.36%. Still, the earnings picture is robust, with a forecast annual earnings growth rate of 29.03%, which is expected to beat the industry's average forecast of 11.32%.

Here's the quick math on the 2025 projections:

What this estimate hides is the significant ramp-up expected in 2026, driven by major customer transitions like the 2nm technology at TSMC, which historically results in notable revenue growth for Entegris, Inc..

Strategic Investments and Competitive Edge

The company's strategic initiatives are designed to solidify its competitive advantage in materials science and purity, which is their primary moat (a sustainable competitive advantage). Their expertise in materials purity is a non-negotiable requirement for next-generation chips, and it's a difficult position for competitors to replicate.

A major action point is the enormous capital commitment in the U.S. Entegris, Inc. has announced a total of $1.4 billion in planned domestic investment, including a $700 million commitment to a state-of-the-art manufacturing center in Colorado Springs, CO, and an additional $700 million in U&S. R&D spending over the next several years. This investment, partially supported by the CHIPS Act, is aimed at accelerating innovation in their Materials Solutions and Advanced Purity Solutions divisions, enhancing supply chain resilience, and supporting the domestic semiconductor ecosystem.

They are also mitigating geopolitical risks by expanding their manufacturing footprint in Asia, with 90% of their China business expected to be served from Asian sites by the end of Q4 2025. This dual-pronged approach-deepening domestic R&D while ensuring global supply chain stability-is a smart move. For a deeper look into the company's long-term vision, you can check out their Mission Statement, Vision, & Core Values of Entegris, Inc. (ENTG).