NASDAQ:ENTG Entegris Q1 2025 Earnings Report $81.94 -1.80 (-2.15%) Closing price 04:00 PM EasternExtended Trading$81.96 +0.02 (+0.02%) As of 05:39 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Entegris EPS ResultsActual EPS$0.67Consensus EPS $0.69Beat/MissMissed by -$0.02One Year Ago EPS$0.68Entegris Revenue ResultsActual Revenue$773.20 millionExpected Revenue$790.75 millionBeat/MissMissed by -$17.55 millionYoY Revenue Growth+0.30%Entegris Announcement DetailsQuarterQ1 2025Date5/7/2025TimeBefore Market OpensConference Call DateWednesday, May 7, 2025Conference Call Time9:00AM ETUpcoming EarningsEntegris' Q3 2025 earnings is scheduled for Monday, November 3, 2025, with a conference call scheduled at 9:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Entegris Q1 2025 Earnings Call TranscriptProvided by QuartrMay 7, 2025 ShareLink copied to clipboard.Key Takeaways Entegris reported 5% revenue growth year-over-year in Q1 ’25 excluding divestitures, with gross margin, EBITDA margin and non-GAAP EPS all pacing at the midpoint of guidance. New retaliatory tariffs in China could delay up to $50 million of Q2 revenue as U.S.-made shipments are on hold, though management expects to recover this via alternate Asia manufacturing sites by year-end. Materials Solutions sales rose 8% year-over-year driven by CMP slurries and pads (+20%), while Advanced Purity Solutions grew 3% on strong microcontamination control demand despite FOOPS and fluid-handling headwinds. Strategic manufacturing expansions remain on track: the new Colorado site achieved its first CHIPS Act milestone ahead of planned H2 customer qualifications, and Kaohsiung liquid-filter qualifications should wrap by year-end. The company is prioritizing free cash flow improvements and debt reduction, trimming 2025 capex to $300 million, pausing M&A and targeting net leverage below 4×. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallEntegris Q1 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipantsPresentationSkip to Participants Operator00:00:00Good day, everyone. Welcome to the Entegris First Quarter twenty twenty five Earnings Conference Call. At this time, all participants have been placed in a listen only mode and the floor will be open for your questions following the presentation. Operator00:00:38I would now like to turn the call over to Bill Seymour. Bill SeymourVice President, Investor Relations at Entegris00:00:44Good morning, everyone. Earlier today, we announced the financial results for the first quarter of twenty twenty five. 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 we have filed with the SEC. Bill SeymourVice President, Investor Relations at Entegris00:01:15Please 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 and Regulation G. You can find reconciliation tables in today's news release as well as on our IR page at website at entegris.com. On the call today are Bertrand Loy, our CEO and Linda Legorga, our CFO. With that, I'll hand the call over to Bertrand. Bertrand LoyCEO, President & Chairman at Entegris00:01:47Thank you, Bill, and good morning. Our first quarter revenue grew 5% year on year excluding divestitures, slightly below our guidance range. Gross margin, EBITDA margin and non GAAP EPS were at the midpoint of guidance. Taking a closer look at our quarterly performance by division, Materials Solutions sales were up 8% year on year excluding divestitures. As expected, CMP slurries and pads delivered strong year on year growth, up almost 20%. Bertrand LoyCEO, President & Chairman at Entegris00:02:22Advanced Purity Solutions sales were up 3% year on year. This growth was driven by solid demand for our microcontamination control solutions offset by a sharp contraction in FOOPS and Fluid Handling revenue. In the quarter, we also continued to make solid progress on several fronts. At our new Colorado manufacturing site, we are on track with initial equipment qualifications and our first milestone associated with our CHIPS Act grant now complete. We expect to initiate customer qualifications in the second half of this year. Bertrand LoyCEO, President & Chairman at Entegris00:03:06Our facility in Kaohsiung, Taiwan also continued to make progress in the first quarter and we expect to complete most of the liquid filter qualifications by the end of this year. These facilities are good examples of our strategy over the past decade to invest in a broad global manufacturing footprint, offering redundant manufacturing sites for our major strategic product lines. In addition, we have developed well integrated supply chain clusters around our largest manufacturing centers. For example, approximately 90% of the raw materials used by our Yonizawa plant in Japan comes from Japanese suppliers and our KSP site in Taiwan uses approximately 90% regional suppliers. Likewise, once up and running, we expect our Colorado facility to rely predominantly on U. Bertrand LoyCEO, President & Chairman at Entegris00:04:09S. Suppliers with nearly 95% of its needs served from domestic suppliers. You can expect us to continue to build on this strategy and evolve our business model to better serve our global customers, to shorten our lead times and de risk our supply chain. In the current trade environment, having a comprehensive global manufacturing footprint with regionally integrated supply chains represents a significant strategic advantage. And at Entegris, all of the necessary building blocks are in place. Bertrand LoyCEO, President & Chairman at Entegris00:04:45We now need and will capitalize on our global manufacturing network. During this uncertain time for the semiconductor industry, we continue to prioritize engagement with our customers to help enable their technology roadmaps. On that note, we are making good progress ahead of commercial volumes of moly deposition materials. We have excellent engagements with all major three d NAND players and we are very pleased with the POR wins we have achieved to date. Our moly deposition film offers the best film conformality and the best cost of ownership in the industry. Bertrand LoyCEO, President & Chairman at Entegris00:05:26In addition to the film material, we are also making great progress in developing novel wet etch chemistries for moly etch as an alternative to the current dry etch process the industry is using. Both opportunities are very promising. They will be first adopted in three d NAND manufacturing and in a few years in DRAM and advanced logic. Another recent win I would like to highlight is with IPA purifiers. Customers in Korea recently came to us concerned about trace metal contamination in IPA chemistries that impacted yields in HBM production. Bertrand LoyCEO, President & Chairman at Entegris00:06:10Our teams were quick to respond and promptly developed the required solutions. This is the perfect example of how our customers use Entegris' unique capabilities to solve emerging complex yield and process challenges and how we continue to increase our served market over time. As these wins illustrate, we are very well positioned to capture incremental content per wafer and continue to outperform the market in the years to come. Looking forward to the rest of 2025, the environment created by new tariff regimes is the source of significant uncertainty and makes it very difficult to precisely quantify the direct and indirect impact on our customers and on our business. In that context, we are providing a broader than normal revenue guidance for Q2 and will not update our 2025 outlook for now. Bertrand LoyCEO, President & Chairman at Entegris00:07:13That said, in this dynamic environment, you can expect us to remain focused on what we control, proactively adjusting our cost structure and investment levels, focusing on improving free cash flow, putting M and A on pause, staying committed to reducing our debt level. And of course, we will continue to closely collaborate with our customers by supporting their node transitions in second half of the year and by engaging on their long term technology roadmaps. Let me now turn the call over to Linda. Linda? Linda LaGorgaSenior VP & CFO at Entegris00:07:47Good morning and thank you, Bertrand. Our sales in the first quarter of '7 '70 '3 million dollars were up 5% year over year excluding the impact of divestitures. On an as reported basis, our sales were flat year over year and down 9% sequentially. Foreign exchange negatively impacted revenue by $5,000,000 year over year and negatively impacted revenue by $2,000,000 sequentially in Q1. Gross margin on a GAAP and non GAAP basis was 46.1 in the first quarter. Linda LaGorgaSenior VP & CFO at Entegris00:08:29Gross margin was at the midpoint of our guidance range and was up sequentially driven by strong cost management across our supply chain. Operating expenses on a GAAP basis were $234,000,000 in Q1. Operating expenses on a non GAAP basis in Q1 were $186,000,000 better than our guidance range. Adjusted EBITDA in Q1 was 28.5% at the midpoint of our guidance. The GAAP tax rate in Q1 was 11.5% and the non GAAP tax rate was 15%. Linda LaGorgaSenior VP & CFO at Entegris00:09:13GAAP diluted EPS was $0.41 per share in the first quarter. Non GAAP EPS was $0.67 per share at the midpoint of guidance. Sales for Materials Solutions in Q1 were $341,000,000 up 8% year on year excluding the impact of divestitures. Sales were down 5% sequentially, in line with normal seasonality. Adjusted operating margin for MS was 22% for the quarter, up modestly sequentially. Linda LaGorgaSenior VP & CFO at Entegris00:09:53Sales for Advanced Purity Solutions in Q1 were $434,000,000 up 3% year on year and down 11% sequentially. The sequential sales decrease was driven by CapEx products, including fluid handling products and soups. Adjusted operating margin for APS was 25.4% for the quarter. The decline in margin was driven by lower volume. As we navigate this dynamic environment, we are focused on controlling what we can control, including our cost structure. Linda LaGorgaSenior VP & CFO at Entegris00:10:32For example, we've elected to retain approximately 75% of the previously announced $15,000,000 of cost savings from the formation of the APS division instead of fully reinvesting those savings. As always, we remain committed to delivering results in line with the framework of our analyst published day target model. Moving on to cash flow. Free cash flow was $32,000,000 As we mentioned in our last earnings call, we are committed to improving our free cash flow margin and have made free cash flow a compensable goal for the management team and the rest of the organization starting this year. In 2025, we expect our free cash flow margin to be in the low double digits. Linda LaGorgaSenior VP & CFO at Entegris00:11:23Over the next several years, you can expect steady improvement as we aim at returning to levels similar to where we were pre pandemic. One of our major focus areas is working capital optimization, in particular inventory, where we have the greatest opportunity as we look to improve lead times and optimize stock levels across our entire network. In addition to working capital improvements, we now expect our capital expenditures to be approximately $300,000,000 in 2025, down from our previous expectation of $325,000,000 As a reminder, our capital expenditures are weighted more to the first half of the year, driven by strategic investments, including Phase one of our Colorado facility. As an aside, I'm pleased to share that we have achieved our first CHIPS Act milestone and expect to receive $9,000,000 in the second quarter. A quick overview of our capital structure. Linda LaGorgaSenior VP & CFO at Entegris00:12:41At the end of the quarter, our gross debt was approximately $4,000,000,000 and our net debt was $3,700,000,000 Gross leverage was 4.4 times and net leverage was four times. Our debt is well structured and derisked. The blended interest rate on our debt portfolio is approximately 4.9%. Since our term loan is fully hedged, currently 100% of our debt is fixed, and there are no maturities on the debt until 2028 and no maintenance covenants on the debt. From a capital allocation standpoint, our single priority remains paying down our debt. Linda LaGorgaSenior VP & CFO at Entegris00:13:27We will use all levers at our disposal to reduce our gross leverage to below four times. Looking forward, I believe we are well positioned to navigate through the dynamic tariff and economic environment. We expect to see a temporary impact to our top line related to our sales to China. We are actively working with our customers and suppliers to mitigate to the greatest extent possible the direct tariff impact by leveraging our global footprint and regional supply chain. Moving on to our Q2 outlook. Linda LaGorgaSenior VP & CFO at Entegris00:14:07We are widening our revenue guidance range to reflect our current assessment of the direct tariff impacts. We expect our Q2 sales to range from $735,000,000 to $775,000,000 Excluding China, our business remains strong. Let me be clear, the lower sequential sales guidance is driven entirely by the uncertainty of shipments of our U. S. Made products into China. Linda LaGorgaSenior VP & CFO at Entegris00:14:40We expect a gross margin of approximately 45%, both on a GAAP and non GAAP basis. GAAP operating expenses of $225,000,000 to $229,000,000 and non GAAP operating expenses of $179,000,000 to $183,000,000 We expect EBITDA margin of approximately 27.5%. Net interest expense of approximately $50,000,000 and we expect our non GAAP tax rate to be approximately 12% due to the expiration of a tax reserve GAAP EPS between $0.34 and zero four one dollars per share and non GAAP EPS between $0.60 and $0.67 per share. We also expect depreciation of approximately $51,000,000 I'll now hand it back over to Bertrand for some closing remarks. Bertrand LoyCEO, President & Chairman at Entegris00:15:45Thank you, Linda. In closing, the industry environment remains dynamic. In that context, we will remain focused on what we can control, engaging with our customers, managing our cost, delivering strong profitability, improving free cash flow and paying down our debt. In 2025, we are prioritizing critical investments that enable our customers no transitions and technology roadmaps needs. Looking further out, we continue to have high confidence in the strong long term growth outlook for the semiconductor industry and for Entegris. Bertrand LoyCEO, President & Chairman at Entegris00:16:26Our customers' technology roadmaps are calling for new materials and ever greater purity levels to improve device performance and achieve optimal yields. Our expertise in material science and material security is increasingly valuable. The R and D investments we are making are translating into key wins in new nodes and are expected to fuel our growth and market outperformance in the years to come. With that, operator, let's open the line for questions. Operator00:16:59Absolutely. The floor is now open for questions. Our first question is coming from Melissa Weathers with Deutsche Bank. Please go ahead. Your line is open. Melissa WeathersDirector - Equity Research at Deutsche Bank00:17:29You so much for letting me ask a question. Good morning, everybody. I guess on the comments that you guys have made on the direct impacts from tariffs in China and your outlook, could you help us understand so is the main message that excluding those direct impacts, everything else is pretty much going as planned as you talked about last quarter? Or just help us if we can get a little bit more context on how you're guiding and how much of that is tariff impact and how much of that is any cyclical weakness? Thank you. Bertrand LoyCEO, President & Chairman at Entegris00:18:05Yes. Good morning, Melissa, and good question. And let me put actually this Q2 guidance in the right context. And I may provide a little bit more details than I usually do, but I think the circumstances warrants that. So let's start with a few facts. Bertrand LoyCEO, President & Chairman at Entegris00:18:23I mean entering Q2, our business is strong. The fill rate is steady. Quarter to date, our book to bill ratio is strong. It's actually approaching 1.2. So that's good. Bertrand LoyCEO, President & Chairman at Entegris00:18:35That's actually very good. Another important fact, ex China, our second quarter forecast is also solid. Actually, expect the ex China business to be up sequentially, in line with the industry trends that we expect in Q2. Specifically, we expect sequential growth in our consumable product lines consistent with the expected sequential improvement in wafer starts. That's going to be offset slightly by the sequential contraction in in our CapEx product lines, and that's also consistent with the expected sequential contraction in the industry CapEx. Bertrand LoyCEO, President & Chairman at Entegris00:19:23But again, net net, our ex China business is solid and is expected to be up sequentially. So that's good as well. So and then to your question, I mean, we certainly have this China tariff situation to deal with. China introduced new tariffs on imports from The U. S. Bertrand LoyCEO, President & Chairman at Entegris00:19:44Our products unfortunately do not qualify for the temporary exemptions granted by the Chinese government. And as a result, as of right now, Chinese customers have put inbound shipments from U. S. On hold. So the impact for us just for Q2, worst case could be up to $50,000,000 again, just for Q2. Bertrand LoyCEO, President & Chairman at Entegris00:20:07And that's the bad news. Now the good news, as Linda stated multiple times in her prepared comments, is that we have alternate Entegris manufacturing sites across Asia that our China customers could use. Actually, they have started qualifying them and we are ourselves in the process of hiring and training additional staff, ramping up our local supply chain. So realistically, we expect to be able to mitigate some of that impact in Q2 and that gets you somewhere at the midpoint of that guidance range for Q2. And of course, we expect to make more progress in Q3, Q4. Bertrand LoyCEO, President & Chairman at Entegris00:20:50And at high level, we expect these initiatives to have substantially mitigated the China tariff headwinds by the end of the year. So hopefully, Melissa, that provides the context you were looking for when thinking about the overall business trends and going into Q2. Melissa WeathersDirector - Equity Research at Deutsche Bank00:21:11Great. Thank you for all that color. That's really helpful. And I totally understand you guys pulling your 2025 guide given that uncertainty. Uncertainty. Melissa WeathersDirector - Equity Research at Deutsche Bank00:21:20Maybe a bigger picture question then. On the Moly side, it was good to hear that you're engaged with all of the main memory players on Moly. But given the macro uncertainty and the tariff uncertainty, has there been any change in your customer discussions about their willingness to adopt Moly? How has the timing of that Moly ramp changed in your mind at all? Bertrand LoyCEO, President & Chairman at Entegris00:21:44Well, it's a great question. I think that despite the uncertainty that we are all experiencing, the good news is that all major node transitions are still on track. It's true for the money adoption in memory. As a matter of fact, all our discussions with the market leaders in three d NAND suggest that not all of them, but most of them will be transitioning to Moly in the second half of the year. So it's good for Moly. Bertrand LoyCEO, President & Chairman at Entegris00:22:14But that statement also applies to Logic. In Logic, we also expect N2 and 18A to ramp in the second half of twenty twenty five. And for all of those node transitions, both in Logic and Memory, we are very well positioned and we are ready to capitalize on the incremental opportunities in back half of the year. And then of course, as more wafers are produced at those nodes going into 2026, that should have a positive impact on our business in 2026 as well. Linda LaGorgaSenior VP & CFO at Entegris00:22:48Great. Thank you. Operator00:22:51We'll take our next question from Charles Hsieh with Needham. Please go ahead. Your line is open. Charles ShiManaging Director - Senior Analyst at Needham & Company00:22:58Hi. Good morning, Bethune and Linda. Maybe I want to go back to the question that China tariff retaliatory tariff impact on the lost sales for Q2. I recall going back a few quarters, you were expecting maybe China revenue as a percentage of the total to go above 20% from somewhere around the mid teens, given the increased production, semi production in China. But how much of the $50,000,000 loss, let's say, Q2 is recoverable, let's say, Q3 and Q4? Charles ShiManaging Director - Senior Analyst at Needham & Company00:23:38Because do they do your Chinese customers really have alternative? Or do you think that there will be some market share loss going forward? The reason why I'm asking this really is about how much of the loss is irreversible and some how much of that you think is reversible, maybe give it a two or three more quarters? Thank you. Bertrand LoyCEO, President & Chairman at Entegris00:24:00Yes, Charles. Fair question. I we believe that this is a temporary impact, as Linda mentioned. And I absolutely believe it is. As we've said many times before, our China business is strong. Bertrand LoyCEO, President & Chairman at Entegris00:24:16There are competitors in China for sure, but we believe that we've been competing very effectively. Our brand is strong. We continue to be viewed as valued partners by our customers. And remember that our solutions really help our customers improve their device performance, improve their yields. This is really at the heart of our value proposition. Bertrand LoyCEO, President & Chairman at Entegris00:24:42And this value proposition appreciated in China as it is anywhere else in the world. So we are in active discussions with our China customers. And when I say China customers, by the way, we're talking about international companies operating in China as well as domestic Chinese customers, right? And they have practical experience of some of our other Asia manufacturing centers. They just need to fully qualify certain products coming from those centers and start placing their future demand on those manufacturing centers. Bertrand LoyCEO, President & Chairman at Entegris00:25:26So we know it's going to take a little bit of time, but we believe it's entirely recoverable. Charles ShiManaging Director - Senior Analyst at Needham & Company00:25:33Got it. Thanks. Maybe a follow-up question. Really, I want to go back to the Q1 results. And I think we're focused on lot on Q2, what the tariff impact could be on the Q2 guidance, but your Q1 results still coming a little bit below, I believe, the low end of the guidance, which you guided in February. Charles ShiManaging Director - Senior Analyst at Needham & Company00:25:56Wonder what exactly happened, why why it came in a little bit below your expectation? And I think you mentioned the CapEx products, fluid handling, hoops, were one of some of the weakness. But what exactly you are seeing in terms of customer behavior, assuming Q1, that's all pre tariff, right? Thank you. Bertrand LoyCEO, President & Chairman at Entegris00:26:21Yes, Charles. Yes. So the Q1 performance has nothing to do with tariffs indeed. The top line came in slightly below guidance. And as we've said, it really comes from much softer demand than originally expected for our Fluid Handling and Food products. Bertrand LoyCEO, President & Chairman at Entegris00:26:43You know that these products I mean demand for these products is linked to new fab construction. We have seen significant slowdown in new fab construction activity in all markets, frankly, but that's especially true in China, in Japan, in Korea. And as a result, we've seen a much more significant contraction in the revenue for those products in Q1. Having said that, remember that we grew in spite of this CapEx headwind, we grew 5% year on year. As I mentioned, strong performance from Materials Solutions, up 8%, strong performance of APS. Bertrand LoyCEO, President & Chairman at Entegris00:27:27I mean, microcontamination had a very solid quarter. It was offset obviously by the decline in the CapEx products that I mentioned. And then finally, one thing that I just want to be sure you remember, Charles, when you're looking at our Q1 performance, especially the year on year, remember that there was a new there were new U. S. Export restrictions announced in December, and we had quantified that impact to be about $10,000,000 on a quarterly basis. Bertrand LoyCEO, President & Chairman at Entegris00:27:58So we saw that in Q1. And then we had some adverse impact from foreign exchange as well. And I think Linda mentioned that year on year, it was about $5,000,000 So certainly those last two points don't explain the miss, right? I mean we're expecting these impacts when setting guidance. But I think it's useful context when you look at Q1 results on a year on year basis. Bertrand LoyCEO, President & Chairman at Entegris00:28:25And I would argue that the overall performance is pretty solid in that context. Charles ShiManaging Director - Senior Analyst at Needham & Company00:28:32Thanks, Batshuay. Operator00:28:35We'll take our next question from Atif Malik. Please go ahead from Citi. Please go ahead. Your line is open. Atif MalikAnalyst at Citigroup00:28:44Thank you for taking my question. The first one for Linda. Linda, can you walk us through you talked about the revenue impact from China, but on the gross margin, the 100 basis points sequential decline to the June. Can you help us understand the puts and takes on the cost side impact from tariffs? Linda LaGorgaSenior VP & CFO at Entegris00:29:04Yes. Thank you for that question. So let me first, since you framed it and let me frame it overall. We're in a dynamic environment and our guidance is capturing that dynamic environment. To your point on how the tariffs play into gross margin, we do have tariffs on U. Linda LaGorgaSenior VP & CFO at Entegris00:29:24S. Imports. And we do import some raw materials and finished goods. So we are very confident in the plan we have to mitigate those tariff impacts over time on U. S. Linda LaGorgaSenior VP & CFO at Entegris00:29:38Imports through select pricing surcharges, different duty programs, focus on regionalized in sourcing to limit that tariff impact. But in the near term, there's likely to be some modest impact to our Q2 gross margins as we progress our mitigation plans because there is a bit of a timing lag and this is reflected in our guidance. So getting back to a little bit more of a big picture between Q1 and Q2 on the margin, you're correct in saying there's a bit of an impact from tariffs. But as we look across gross margins and look forward, there's going to be puts and takes. So I want to bring you back to looking forward. Linda LaGorgaSenior VP & CFO at Entegris00:30:19There's the volume leverage as we progress throughout the year. We're going to continue to focus on productivity. We'll continue to have inefficiencies this year in Taiwan and Colorado, but we're going to get most of that behind us by 2026. And we're going to continue to manage our cost structure, including gross margin in the context of our Analyst Day. So while there's slightly lower gross margins in Q2, we still expect that in 2025, our overall gross margins will be up modestly compared to 2024. Atif MalikAnalyst at Citigroup00:30:53Very helpful. And one for Bertrand. Bertrand, I fully understand you guys are not commenting on full year given the macro uncertainty. But just kind of broad strokes, if we how do you see that the CapEx environment going on for second half? Some of the CapEx peers have talked about maybe flattish outlook for CapEx in second half. Atif MalikAnalyst at Citigroup00:31:15Some of them are down in second half versus first half. If you can just kind of give your big picture thoughts on the CapEx trend. Bertrand LoyCEO, President & Chairman at Entegris00:31:24Yes. Mean, look, I mean, that when we started the year pre impact from tariffs and the growing uncertainty around that, we probably already had some fairly conservative expectations when it comes to the industry CapEx. I would argue that the current prevailing uncertainty is, in my opinion, going to put some additional pressure on CapEx in the second half of the year. Having said that, we expect that to be somewhat offset by the steady improvement that we expect to see in wafer starts. So again, all of that is our high level considerations that do not really incorporate any considerations and any changes coming from the uncertainty around the tariff and the indirect impact from tariffs. Thanks. Operator00:32:27We'll take our next question from Timothy Arcuri with UBS. Please go ahead. Your line is open. Timothy ArcuriManaging Director at UBS Group00:32:35Thanks a lot. Bertrand, I also wanted to ask about how quickly this revenue can come back. I mean, why does this not sort of is this not the match that lights the fire for them to qualify local alternatives? I know that not all of what you sell, there's not a local alternative for, you know, all the way you sell, obviously. But there are local alternatives for some of what you sell. And so do they actually have enough inventory on hand to just outright be able to continue to operate with China not accepting shipments? Mean this is a pretty big number relative to what your China exposure is. So Bertrand LoyCEO, President & Chairman at Entegris00:33:14yes, thanks. Yes. Look, it's a fair question, Tim. I think the burden is going be on us to be very proactive and very effective in transitioning the China demand to some of those alternate Asia sites. I think that those Asia manufacturing alternatives have a lot to offer. Bertrand LoyCEO, President & Chairman at Entegris00:33:38I mean think about the big investment we made in Taiwan, recent investments in Japan and Korea. So we are really offering state of the art manufacturing capabilities. We believe we are offering, again, products that are very uniquely enabling device performance and very uniquely enabling the yields of our customers, and that has value. And we certainly hope that this is the point of view that our China customers share with us. And again, all indications are based on discussions we've been having with them in the last months, all indications are that they are very eager to qualify those alternatives. Bertrand LoyCEO, President & Chairman at Entegris00:34:29I mean the proof will be in the pudding obviously, but I optimistic. Timothy ArcuriManaging Director at UBS Group00:34:36Okay. Got it. And then just a two part question. So one, what is the clean revenue guide then for June? So is the clean revenue guide something like $800,000,000 minus this issue? Timothy ArcuriManaging Director at UBS Group00:34:46So is that the baseline that we should then kind of I mean, obviously, we have to assume how quickly this 50,000,000 comes back. But is the $800,000,000 like that's the real sort of demand based guidance for June? That's the first part of the question. And then the second part is what is your NAND exposure right now? Do you think any of the weak June quarter is related to NAND? Thanks. Bertrand LoyCEO, President & Chairman at Entegris00:35:07Yes. So in reverse order, the NAND exposure right now for us is about 10% of our revenue roughly. And in terms of breaking down our Q2 guidance between China and non China, I mean, think we've provided a lot of details. I'm not going to go into a lot more details than my answer to the first question. But directionally, the way you think about it is not too far off. Timothy ArcuriManaging Director at UBS Group00:35:39Okay. Thank you. Operator00:35:42We'll take our next question from Chris Parkinson with Wolfe Research. Please go ahead. Your line is open. Christopher ParkinsonManaging Director at Wolfe Research, LLC00:35:50Great. Thank you so much. You hit on a few of these, but just to dig down a little bit deeper. In terms of your second half assumptions of just what you're looking at from the customer level, can you sit on some non tariff related factors, specifically, Mali, no transitions? You know, is there anything that has actually changed in the last, you know, five to six weeks that would, you know, ultimately, you know, further evolve your views on those? Christopher ParkinsonManaging Director at Wolfe Research, LLC00:36:16And then perhaps just a quick update on the Taiwan ramp as well would be very helpful. Thank you. Bertrand LoyCEO, President & Chairman at Entegris00:36:24Yes. So in terms of the benefits that we expect to get from the node transitions, as I said, we are very encouraged by our recent discussions with our customers. All of the major node transitions we're expecting in Memory and Logic seems to be still on time. And that's positive because it provides an opportunity for us to increase our content per wafer, and that should actually help us sustain very attractive revenue levels in second half of the year. Having said that, I mean, you're right that today, there's still a lot of unknown around the indirect impact coming from tariffs. Bertrand LoyCEO, President & Chairman at Entegris00:37:11I mean, there is recession, which usually could correlate with a slower demand environment for semiconductors, but nobody has been able to really quantify that, and I'm certainly not equipped to do that either. So that's something we're going to be obviously keeping an eye on. And then there was a third part to your question, which I forgot. Christopher ParkinsonManaging Director at Wolfe Research, LLC00:37:39Taiwan. Bertrand LoyCEO, President & Chairman at Entegris00:37:40Taiwan, yes. So Taiwan, yes, we're making actually really good progress in our Cao Xiong facility. Remember that in 2024, we completed a number of product qualifications, high purity containers, deposition materials, and we initiated qualifications for liquid filters. In 2025, the focus is to complete the remaining qualifications for all major liquid filters. And when it's all said and done, I would say that I would expect the run rate, the revenue run rate exiting 2025 out of Caoxime to exceed $120,000,000 Remember, the last year, the revenue on a full year basis was something closer to $15,000,000 So a lot of progress is expected in 2025. Christopher ParkinsonManaging Director at Wolfe Research, LLC00:38:43That's very helpful. And just in terms of the intermediate term, obviously, once again, I understand the world is changing. But to the best as we sit here today, how are you thinking about The U. S. Market just given the rhetoric of the current administration, trade, the potential for increases in foreign investment? Christopher ParkinsonManaging Director at Wolfe Research, LLC00:39:00Just any updated thoughts just holistically on those topics would be helpful and just how that relates to your thoughts on the Colorado Springs opportunity? Thank you. Bertrand LoyCEO, President & Chairman at Entegris00:39:12Yes, that's a fair question. I think this something that we are keeping a very, very close eye on. External market research and our own views is that the new fab construction activity will be significantly down this year in 2025. It's true, as I mentioned, in China, Japan, but also will be likely true here in North America. So right now, when it comes to our Colorado investment, we are going full speed ahead with our Phase one investment. Bertrand LoyCEO, President & Chairman at Entegris00:39:49We have actually hit a number of milestones. So feeling really good about the progress and we're going be starting customer qualifications in the second half of this year. We expect production late this year, early next year. Now when it comes to the timing of Phase two, so the next phase of investment, we're going to be looking at the level of new fab activity in The U. S. Bertrand LoyCEO, President & Chairman at Entegris00:40:20We're going to take that into consideration and we will finalize our decisions later this year. So no decision at this point. Christopher ParkinsonManaging Director at Wolfe Research, LLC00:40:30Very helpful. Thank you so much. Operator00:40:33We'll take our next question from John Roberts with Mizuho. Please go ahead. Your line is open. John RobertsManaging Director at Mizuho Financial Group00:40:41Thank you. Sometimes you characterize the business at a high level in terms of mainstream versus advanced applications. I assume advanced is not that affected by China or much less affected, but maybe you could just give us kind of the tone of business in those kind of two big buckets. Bertrand LoyCEO, President & Chairman at Entegris00:40:59Yes. I mean, look, our Advanced Logic business remained very, very strong. I mean, you look at our Q1 performance, our revenue in Taiwan was very strong year on year as we would expect and as we capitalized on increased demand linked to AI and advanced logic application. But it's true that we continue to face some headwind from still fairly reduced levels of operations in mainstream fabs. And it was true pretty much around the world, including China John RobertsManaging Director at Mizuho Financial Group00:41:45Yes. And then I think the comment period ends today for the new semiconductor tariffs. Have the consultants summarized that for you? Or is there anything that kind of maybe sticks out as unexpected in what may have been submitted in terms of public comments? Bertrand LoyCEO, President & Chairman at Entegris00:42:05No. As I said, I think right now, there's just a lot of unknown, a lot of uncertainty. I think most of our customers are taking a very prudent approach, frankly, when they think about the balance of the year. And that's the reason why we didn't feel equipped to update our annual guidance. I think hopefully, things will settle down. Bertrand LoyCEO, President & Chairman at Entegris00:42:31And hopefully, in a few months, we will be in a better position to update our full year guidance. John RobertsManaging Director at Mizuho Financial Group00:42:40Thank you. Operator00:42:43We'll take our next question from Mike Harrison with Seaport Research Partners. Please go ahead. Your line is open. Mike HarrisonManaging Director and Senior Chemicals Analyst at Seaport Research Partners00:42:51Hi, good morning. I was hoping we could dig in a little bit on the growth that you're seeing within the microcontamination control portion of the ATS segment. I feel like sometimes you have pretty good visibility on your ability to grow in that business. How is visibility today compared to what you think of as normal? Are you seeing any delays or changes in customer order patterns? Mike HarrisonManaging Director and Senior Chemicals Analyst at Seaport Research Partners00:43:20Any change in filter usage or anything that suggests that maybe your customers are trying to thrift or extend the life of some of those filters? Any color there would be appreciated. Bertrand LoyCEO, President & Chairman at Entegris00:43:34Yes. It's a good question, Mike. I think I think you know the answer to the question. I think in advanced Logic, there's still this intense focus on defect management, which is really driving the right behaviors when it comes to using the most advanced filters, proactively changing them and doing the right level of preventing preventative maintenance. We are seeing that same behavior now in HBM. Bertrand LoyCEO, President & Chairman at Entegris00:44:09And I mentioned that in my prepared remarks, highlighting a new IPA purifier opportunities. So it's great to see that as device complexity increases, we are starting to see a greater focus, greater interest in the microcontamination control solutions. In the case of this HBM opportunity, we were asked to help reduce the level of trace metal contaminations from three parts per trillion to something less than one part per trillion. I think our solutions actually help the customer get to 0.5 parts per trillion, which put that in context, there's about half a drop of water in 20 Olympic sized swimming pools. So they're the types of solutions that we are developing. Bertrand LoyCEO, President & Chairman at Entegris00:45:11We are very proud of the value proposition that our products offer. And we're pleased to see this greater level of focus on purity. But you're right that when utilization levels are low as they are right now in mainstream, customers will try to stretch the lifetime of the filters. And that's one of the many reasons why our mainstream business has sluggish frankly in the last couple of years now. Mike HarrisonManaging Director and Senior Chemicals Analyst at Seaport Research Partners00:45:49All right. And then for Linda, I know you don't typically talk about the FX impact. You mentioned, I believe, some top line impacts in the first quarter. But with the big swings that we've seen in the dollar, can you talk a little bit about the impact you might expect to see in the second quarter in other parts of the P and L and at the EBITDA level? Is that something that's leading to some margin weakness in the second quarter as well? Linda LaGorgaSenior VP & CFO at Entegris00:46:21Yes. Thanks, Mike. First, historically, we have not had a meaningful impact on our business from FX. And again, you're asking about other parts of the P and L. But as I mentioned, on the sales side, than 75% of our sales are USD. Linda LaGorgaSenior VP & CFO at Entegris00:46:39When you get below sales into the gross margin, which could flow down into EBITDA, when we do have significant and fast moves, we do see some impact, but it has been manageable. So there could be a little bit of impact in Q2, but that is not the primary reason why I'm projecting what we're projecting for Q2 in our gross margin. As I said, primarily, I'd focus on some of the volume deleveraging and then the impact of the direct tariffs from U. S. Imports and a bit of a timing lag. Mike HarrisonManaging Director and Senior Chemicals Analyst at Seaport Research Partners00:47:15Thanks very much. Operator00:47:19We'll take our next question from Aleksey Yefremov with KeyBanc Capital Markets. Please go ahead. Your line is open. Ryan PirnatManaging Director at KeyBanc Capital Markets00:47:28Thanks and good morning, Bertrand. This is Ryan on for Aleksey. Just wanted to ask one on China First. Did you guys see any evidence of pre buying kind of ahead of all the restrictions that have gone in? I understand you mentioned that they're eager to qualify some of your product from alternative sourcing. Ryan PirnatManaging Director at KeyBanc Capital Markets00:47:46But just wondering if there was any pre buying that you kind of saw ahead of all this? Bertrand LoyCEO, President & Chairman at Entegris00:47:52No, we didn't really see much of that. And when it comes to Q2, obviously, as I said, I think right now, all of our shipments ex U. S. Are on hold. So there's absolutely no pre buying going on right now. And there was none of that in Q1 either. Ryan PirnatManaging Director at KeyBanc Capital Markets00:48:13Understood. Okay. And then I just wanted to ask on Advanced Packaging. I mean, it seems like growth is kind of accelerating across the space. Was hoping you might be able to remind us what the size of that business is for you today, maybe what growth kind of looked like in 1Q and kind of what your outlook is like? Thank you. Bertrand LoyCEO, President & Chairman at Entegris00:48:32Yes. Good question, Ryan. So advanced packaging for us is still a fairly small market, right? But as we have mentioned multiple times, it's growing very fast. It actually did more than double in 2024. Bertrand LoyCEO, President & Chairman at Entegris00:48:50We saw actually a doubling in Q1 versus actually more than a doubling in Q1 of this year versus Q1 of last year. When we think about the full year 2025, we expect this business year on year to grow more than 25%. And the two big drivers for us in 2025 are expected to be of high viscosity dispense solutions. That's an APS product. And then the other one would be HBM slurries for TSV applications. Bertrand LoyCEO, President & Chairman at Entegris00:49:30So again, feeling good about the momentum, feeling good about our ability to uncover new areas where we can contribute value, still small, but growing very fast. Operator00:49:52And there are no further questions on the line at this time. I'll turn the program back to Bill Seymour for any closing remarks. Bill SeymourVice President, Investor Relations at Entegris00:50:00Thank you for joining our call today. Please reach out to me personally if you need to follow-up. With that, have a great day and you can disconnect. Operator00:50:10Thank you. This concludes today's Entegris first quarter twenty twenty five earnings conference call. Please disconnect your line at this time. Have a wonderful day.Read moreParticipantsExecutivesBill SeymourVice President, Investor RelationsBertrand LoyCEO, President & ChairmanLinda LaGorgaSenior VP & CFOAnalystsMelissa WeathersDirector - Equity Research at Deutsche BankCharles ShiManaging Director - Senior Analyst at Needham & CompanyAtif MalikAnalyst at CitigroupTimothy ArcuriManaging Director at UBS GroupChristopher ParkinsonManaging Director at Wolfe Research, LLCJohn RobertsManaging Director at Mizuho Financial GroupMike HarrisonManaging Director and Senior Chemicals Analyst at Seaport Research PartnersRyan PirnatManaging Director at KeyBanc Capital MarketsPowered by Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Entegris Earnings HeadlinesEntegris Announces $700 Million In Domestic Semiconductor Market For R&D SpendingSeptember 2 at 4:07 AM | finance.yahoo.comEntegris, Inc. (NASDAQ:ENTG) Given Consensus Recommendation of "Moderate Buy" by AnalystsSeptember 1 at 2:11 AM | americanbankingnews.comREVEALED FREE: Our top 3 stocks to own in 2025 and beyondEvery time Weiss Ratings flashed green like this, the average gain on each and every stock has been 303% (including the losers!).September 2 at 2:00 AM | Weiss Ratings (Ad)1 Cash-Producing Stock to Keep an Eye On and 2 We Find RiskyAugust 28, 2025 | finance.yahoo.comBillionaire Stanley Druckenmiller Went on a Shopping Spree. Here Are 3 of His Biggest BuysAugust 25, 2025 | 247wallst.comEntegris, Inc. (NASDAQ:ENTG) Sees Large Growth in Short InterestAugust 23, 2025 | americanbankingnews.comSee More Entegris Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Entegris? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Entegris and other key companies, straight to your email. Email Address About EntegrisEntegris (NASDAQ:ENTG) is a leading provider of advanced materials and process control solutions for the semiconductor and other high-technology industries. The company develops and supplies a broad portfolio of products designed to ensure purity and reliability throughout the manufacturing process, helping customers address critical contamination and yield challenges. Entegris’s product offerings include high-purity chemicals and specialty materials, liquid and gas filtration and purification systems, and sophisticated wafer and chip handling solutions. Its consumable products—such as filters, membranes, liquid delivery systems, and specialty packaging—are engineered to meet stringent cleanliness standards required for semiconductor device fabrication, flat panel display production, and related precision manufacturing applications. Headquartered in Billerica, Massachusetts, Entegris operates a global network of manufacturing, research and development, and customer support facilities across North America, Europe, and the Asia-Pacific region. The company’s solutions are used by major semiconductor manufacturers, foundries, and research institutions worldwide, positioning Entegris as a key partner in the evolution of advanced electronics and next-generation technology platforms.Written by Jeffrey Neal JohnsonView Entegris ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles What to Watch for From D-Wave Now That Earnings Are DoneDICKS’s Sporting Goods Stock Dropped After Earnings—Is It a Buy?NVIDIA's Earnings Show a Green Light for Taiwan Semiconductor After Earnings Miss, Walmart Is Still a Top Consumer Staples PlayRoyal Caribbean Earnings Beat Fuels Strong 2025 OutlookDLocal Stock Soars 43% After Earnings Beat and Raised GuidanceGreen Dot's 30% Rally: Turnaround Takes Off on Explosive Earnings Upcoming Earnings Salesforce (9/3/2025)Broadcom (9/4/2025)Oracle (9/8/2025)Synopsys (9/9/2025)Adobe (9/11/2025)FedEx (9/18/2025)Micron Technology (9/23/2025)AutoZone (9/23/2025)Cintas (9/24/2025)Costco Wholesale (9/25/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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PresentationSkip to Participants Operator00:00:00Good day, everyone. Welcome to the Entegris First Quarter twenty twenty five Earnings Conference Call. At this time, all participants have been placed in a listen only mode and the floor will be open for your questions following the presentation. Operator00:00:38I would now like to turn the call over to Bill Seymour. Bill SeymourVice President, Investor Relations at Entegris00:00:44Good morning, everyone. Earlier today, we announced the financial results for the first quarter of twenty twenty five. 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 we have filed with the SEC. Bill SeymourVice President, Investor Relations at Entegris00:01:15Please 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 and Regulation G. You can find reconciliation tables in today's news release as well as on our IR page at website at entegris.com. On the call today are Bertrand Loy, our CEO and Linda Legorga, our CFO. With that, I'll hand the call over to Bertrand. Bertrand LoyCEO, President & Chairman at Entegris00:01:47Thank you, Bill, and good morning. Our first quarter revenue grew 5% year on year excluding divestitures, slightly below our guidance range. Gross margin, EBITDA margin and non GAAP EPS were at the midpoint of guidance. Taking a closer look at our quarterly performance by division, Materials Solutions sales were up 8% year on year excluding divestitures. As expected, CMP slurries and pads delivered strong year on year growth, up almost 20%. Bertrand LoyCEO, President & Chairman at Entegris00:02:22Advanced Purity Solutions sales were up 3% year on year. This growth was driven by solid demand for our microcontamination control solutions offset by a sharp contraction in FOOPS and Fluid Handling revenue. In the quarter, we also continued to make solid progress on several fronts. At our new Colorado manufacturing site, we are on track with initial equipment qualifications and our first milestone associated with our CHIPS Act grant now complete. We expect to initiate customer qualifications in the second half of this year. Bertrand LoyCEO, President & Chairman at Entegris00:03:06Our facility in Kaohsiung, Taiwan also continued to make progress in the first quarter and we expect to complete most of the liquid filter qualifications by the end of this year. These facilities are good examples of our strategy over the past decade to invest in a broad global manufacturing footprint, offering redundant manufacturing sites for our major strategic product lines. In addition, we have developed well integrated supply chain clusters around our largest manufacturing centers. For example, approximately 90% of the raw materials used by our Yonizawa plant in Japan comes from Japanese suppliers and our KSP site in Taiwan uses approximately 90% regional suppliers. Likewise, once up and running, we expect our Colorado facility to rely predominantly on U. Bertrand LoyCEO, President & Chairman at Entegris00:04:09S. Suppliers with nearly 95% of its needs served from domestic suppliers. You can expect us to continue to build on this strategy and evolve our business model to better serve our global customers, to shorten our lead times and de risk our supply chain. In the current trade environment, having a comprehensive global manufacturing footprint with regionally integrated supply chains represents a significant strategic advantage. And at Entegris, all of the necessary building blocks are in place. Bertrand LoyCEO, President & Chairman at Entegris00:04:45We now need and will capitalize on our global manufacturing network. During this uncertain time for the semiconductor industry, we continue to prioritize engagement with our customers to help enable their technology roadmaps. On that note, we are making good progress ahead of commercial volumes of moly deposition materials. We have excellent engagements with all major three d NAND players and we are very pleased with the POR wins we have achieved to date. Our moly deposition film offers the best film conformality and the best cost of ownership in the industry. Bertrand LoyCEO, President & Chairman at Entegris00:05:26In addition to the film material, we are also making great progress in developing novel wet etch chemistries for moly etch as an alternative to the current dry etch process the industry is using. Both opportunities are very promising. They will be first adopted in three d NAND manufacturing and in a few years in DRAM and advanced logic. Another recent win I would like to highlight is with IPA purifiers. Customers in Korea recently came to us concerned about trace metal contamination in IPA chemistries that impacted yields in HBM production. Bertrand LoyCEO, President & Chairman at Entegris00:06:10Our teams were quick to respond and promptly developed the required solutions. This is the perfect example of how our customers use Entegris' unique capabilities to solve emerging complex yield and process challenges and how we continue to increase our served market over time. As these wins illustrate, we are very well positioned to capture incremental content per wafer and continue to outperform the market in the years to come. Looking forward to the rest of 2025, the environment created by new tariff regimes is the source of significant uncertainty and makes it very difficult to precisely quantify the direct and indirect impact on our customers and on our business. In that context, we are providing a broader than normal revenue guidance for Q2 and will not update our 2025 outlook for now. Bertrand LoyCEO, President & Chairman at Entegris00:07:13That said, in this dynamic environment, you can expect us to remain focused on what we control, proactively adjusting our cost structure and investment levels, focusing on improving free cash flow, putting M and A on pause, staying committed to reducing our debt level. And of course, we will continue to closely collaborate with our customers by supporting their node transitions in second half of the year and by engaging on their long term technology roadmaps. Let me now turn the call over to Linda. Linda? Linda LaGorgaSenior VP & CFO at Entegris00:07:47Good morning and thank you, Bertrand. Our sales in the first quarter of '7 '70 '3 million dollars were up 5% year over year excluding the impact of divestitures. On an as reported basis, our sales were flat year over year and down 9% sequentially. Foreign exchange negatively impacted revenue by $5,000,000 year over year and negatively impacted revenue by $2,000,000 sequentially in Q1. Gross margin on a GAAP and non GAAP basis was 46.1 in the first quarter. Linda LaGorgaSenior VP & CFO at Entegris00:08:29Gross margin was at the midpoint of our guidance range and was up sequentially driven by strong cost management across our supply chain. Operating expenses on a GAAP basis were $234,000,000 in Q1. Operating expenses on a non GAAP basis in Q1 were $186,000,000 better than our guidance range. Adjusted EBITDA in Q1 was 28.5% at the midpoint of our guidance. The GAAP tax rate in Q1 was 11.5% and the non GAAP tax rate was 15%. Linda LaGorgaSenior VP & CFO at Entegris00:09:13GAAP diluted EPS was $0.41 per share in the first quarter. Non GAAP EPS was $0.67 per share at the midpoint of guidance. Sales for Materials Solutions in Q1 were $341,000,000 up 8% year on year excluding the impact of divestitures. Sales were down 5% sequentially, in line with normal seasonality. Adjusted operating margin for MS was 22% for the quarter, up modestly sequentially. Linda LaGorgaSenior VP & CFO at Entegris00:09:53Sales for Advanced Purity Solutions in Q1 were $434,000,000 up 3% year on year and down 11% sequentially. The sequential sales decrease was driven by CapEx products, including fluid handling products and soups. Adjusted operating margin for APS was 25.4% for the quarter. The decline in margin was driven by lower volume. As we navigate this dynamic environment, we are focused on controlling what we can control, including our cost structure. Linda LaGorgaSenior VP & CFO at Entegris00:10:32For example, we've elected to retain approximately 75% of the previously announced $15,000,000 of cost savings from the formation of the APS division instead of fully reinvesting those savings. As always, we remain committed to delivering results in line with the framework of our analyst published day target model. Moving on to cash flow. Free cash flow was $32,000,000 As we mentioned in our last earnings call, we are committed to improving our free cash flow margin and have made free cash flow a compensable goal for the management team and the rest of the organization starting this year. In 2025, we expect our free cash flow margin to be in the low double digits. Linda LaGorgaSenior VP & CFO at Entegris00:11:23Over the next several years, you can expect steady improvement as we aim at returning to levels similar to where we were pre pandemic. One of our major focus areas is working capital optimization, in particular inventory, where we have the greatest opportunity as we look to improve lead times and optimize stock levels across our entire network. In addition to working capital improvements, we now expect our capital expenditures to be approximately $300,000,000 in 2025, down from our previous expectation of $325,000,000 As a reminder, our capital expenditures are weighted more to the first half of the year, driven by strategic investments, including Phase one of our Colorado facility. As an aside, I'm pleased to share that we have achieved our first CHIPS Act milestone and expect to receive $9,000,000 in the second quarter. A quick overview of our capital structure. Linda LaGorgaSenior VP & CFO at Entegris00:12:41At the end of the quarter, our gross debt was approximately $4,000,000,000 and our net debt was $3,700,000,000 Gross leverage was 4.4 times and net leverage was four times. Our debt is well structured and derisked. The blended interest rate on our debt portfolio is approximately 4.9%. Since our term loan is fully hedged, currently 100% of our debt is fixed, and there are no maturities on the debt until 2028 and no maintenance covenants on the debt. From a capital allocation standpoint, our single priority remains paying down our debt. Linda LaGorgaSenior VP & CFO at Entegris00:13:27We will use all levers at our disposal to reduce our gross leverage to below four times. Looking forward, I believe we are well positioned to navigate through the dynamic tariff and economic environment. We expect to see a temporary impact to our top line related to our sales to China. We are actively working with our customers and suppliers to mitigate to the greatest extent possible the direct tariff impact by leveraging our global footprint and regional supply chain. Moving on to our Q2 outlook. Linda LaGorgaSenior VP & CFO at Entegris00:14:07We are widening our revenue guidance range to reflect our current assessment of the direct tariff impacts. We expect our Q2 sales to range from $735,000,000 to $775,000,000 Excluding China, our business remains strong. Let me be clear, the lower sequential sales guidance is driven entirely by the uncertainty of shipments of our U. S. Made products into China. Linda LaGorgaSenior VP & CFO at Entegris00:14:40We expect a gross margin of approximately 45%, both on a GAAP and non GAAP basis. GAAP operating expenses of $225,000,000 to $229,000,000 and non GAAP operating expenses of $179,000,000 to $183,000,000 We expect EBITDA margin of approximately 27.5%. Net interest expense of approximately $50,000,000 and we expect our non GAAP tax rate to be approximately 12% due to the expiration of a tax reserve GAAP EPS between $0.34 and zero four one dollars per share and non GAAP EPS between $0.60 and $0.67 per share. We also expect depreciation of approximately $51,000,000 I'll now hand it back over to Bertrand for some closing remarks. Bertrand LoyCEO, President & Chairman at Entegris00:15:45Thank you, Linda. In closing, the industry environment remains dynamic. In that context, we will remain focused on what we can control, engaging with our customers, managing our cost, delivering strong profitability, improving free cash flow and paying down our debt. In 2025, we are prioritizing critical investments that enable our customers no transitions and technology roadmaps needs. Looking further out, we continue to have high confidence in the strong long term growth outlook for the semiconductor industry and for Entegris. Bertrand LoyCEO, President & Chairman at Entegris00:16:26Our customers' technology roadmaps are calling for new materials and ever greater purity levels to improve device performance and achieve optimal yields. Our expertise in material science and material security is increasingly valuable. The R and D investments we are making are translating into key wins in new nodes and are expected to fuel our growth and market outperformance in the years to come. With that, operator, let's open the line for questions. Operator00:16:59Absolutely. The floor is now open for questions. Our first question is coming from Melissa Weathers with Deutsche Bank. Please go ahead. Your line is open. Melissa WeathersDirector - Equity Research at Deutsche Bank00:17:29You so much for letting me ask a question. Good morning, everybody. I guess on the comments that you guys have made on the direct impacts from tariffs in China and your outlook, could you help us understand so is the main message that excluding those direct impacts, everything else is pretty much going as planned as you talked about last quarter? Or just help us if we can get a little bit more context on how you're guiding and how much of that is tariff impact and how much of that is any cyclical weakness? Thank you. Bertrand LoyCEO, President & Chairman at Entegris00:18:05Yes. Good morning, Melissa, and good question. And let me put actually this Q2 guidance in the right context. And I may provide a little bit more details than I usually do, but I think the circumstances warrants that. So let's start with a few facts. Bertrand LoyCEO, President & Chairman at Entegris00:18:23I mean entering Q2, our business is strong. The fill rate is steady. Quarter to date, our book to bill ratio is strong. It's actually approaching 1.2. So that's good. Bertrand LoyCEO, President & Chairman at Entegris00:18:35That's actually very good. Another important fact, ex China, our second quarter forecast is also solid. Actually, expect the ex China business to be up sequentially, in line with the industry trends that we expect in Q2. Specifically, we expect sequential growth in our consumable product lines consistent with the expected sequential improvement in wafer starts. That's going to be offset slightly by the sequential contraction in in our CapEx product lines, and that's also consistent with the expected sequential contraction in the industry CapEx. Bertrand LoyCEO, President & Chairman at Entegris00:19:23But again, net net, our ex China business is solid and is expected to be up sequentially. So that's good as well. So and then to your question, I mean, we certainly have this China tariff situation to deal with. China introduced new tariffs on imports from The U. S. Bertrand LoyCEO, President & Chairman at Entegris00:19:44Our products unfortunately do not qualify for the temporary exemptions granted by the Chinese government. And as a result, as of right now, Chinese customers have put inbound shipments from U. S. On hold. So the impact for us just for Q2, worst case could be up to $50,000,000 again, just for Q2. Bertrand LoyCEO, President & Chairman at Entegris00:20:07And that's the bad news. Now the good news, as Linda stated multiple times in her prepared comments, is that we have alternate Entegris manufacturing sites across Asia that our China customers could use. Actually, they have started qualifying them and we are ourselves in the process of hiring and training additional staff, ramping up our local supply chain. So realistically, we expect to be able to mitigate some of that impact in Q2 and that gets you somewhere at the midpoint of that guidance range for Q2. And of course, we expect to make more progress in Q3, Q4. Bertrand LoyCEO, President & Chairman at Entegris00:20:50And at high level, we expect these initiatives to have substantially mitigated the China tariff headwinds by the end of the year. So hopefully, Melissa, that provides the context you were looking for when thinking about the overall business trends and going into Q2. Melissa WeathersDirector - Equity Research at Deutsche Bank00:21:11Great. Thank you for all that color. That's really helpful. And I totally understand you guys pulling your 2025 guide given that uncertainty. Uncertainty. Melissa WeathersDirector - Equity Research at Deutsche Bank00:21:20Maybe a bigger picture question then. On the Moly side, it was good to hear that you're engaged with all of the main memory players on Moly. But given the macro uncertainty and the tariff uncertainty, has there been any change in your customer discussions about their willingness to adopt Moly? How has the timing of that Moly ramp changed in your mind at all? Bertrand LoyCEO, President & Chairman at Entegris00:21:44Well, it's a great question. I think that despite the uncertainty that we are all experiencing, the good news is that all major node transitions are still on track. It's true for the money adoption in memory. As a matter of fact, all our discussions with the market leaders in three d NAND suggest that not all of them, but most of them will be transitioning to Moly in the second half of the year. So it's good for Moly. Bertrand LoyCEO, President & Chairman at Entegris00:22:14But that statement also applies to Logic. In Logic, we also expect N2 and 18A to ramp in the second half of twenty twenty five. And for all of those node transitions, both in Logic and Memory, we are very well positioned and we are ready to capitalize on the incremental opportunities in back half of the year. And then of course, as more wafers are produced at those nodes going into 2026, that should have a positive impact on our business in 2026 as well. Linda LaGorgaSenior VP & CFO at Entegris00:22:48Great. Thank you. Operator00:22:51We'll take our next question from Charles Hsieh with Needham. Please go ahead. Your line is open. Charles ShiManaging Director - Senior Analyst at Needham & Company00:22:58Hi. Good morning, Bethune and Linda. Maybe I want to go back to the question that China tariff retaliatory tariff impact on the lost sales for Q2. I recall going back a few quarters, you were expecting maybe China revenue as a percentage of the total to go above 20% from somewhere around the mid teens, given the increased production, semi production in China. But how much of the $50,000,000 loss, let's say, Q2 is recoverable, let's say, Q3 and Q4? Charles ShiManaging Director - Senior Analyst at Needham & Company00:23:38Because do they do your Chinese customers really have alternative? Or do you think that there will be some market share loss going forward? The reason why I'm asking this really is about how much of the loss is irreversible and some how much of that you think is reversible, maybe give it a two or three more quarters? Thank you. Bertrand LoyCEO, President & Chairman at Entegris00:24:00Yes, Charles. Fair question. I we believe that this is a temporary impact, as Linda mentioned. And I absolutely believe it is. As we've said many times before, our China business is strong. Bertrand LoyCEO, President & Chairman at Entegris00:24:16There are competitors in China for sure, but we believe that we've been competing very effectively. Our brand is strong. We continue to be viewed as valued partners by our customers. And remember that our solutions really help our customers improve their device performance, improve their yields. This is really at the heart of our value proposition. Bertrand LoyCEO, President & Chairman at Entegris00:24:42And this value proposition appreciated in China as it is anywhere else in the world. So we are in active discussions with our China customers. And when I say China customers, by the way, we're talking about international companies operating in China as well as domestic Chinese customers, right? And they have practical experience of some of our other Asia manufacturing centers. They just need to fully qualify certain products coming from those centers and start placing their future demand on those manufacturing centers. Bertrand LoyCEO, President & Chairman at Entegris00:25:26So we know it's going to take a little bit of time, but we believe it's entirely recoverable. Charles ShiManaging Director - Senior Analyst at Needham & Company00:25:33Got it. Thanks. Maybe a follow-up question. Really, I want to go back to the Q1 results. And I think we're focused on lot on Q2, what the tariff impact could be on the Q2 guidance, but your Q1 results still coming a little bit below, I believe, the low end of the guidance, which you guided in February. Charles ShiManaging Director - Senior Analyst at Needham & Company00:25:56Wonder what exactly happened, why why it came in a little bit below your expectation? And I think you mentioned the CapEx products, fluid handling, hoops, were one of some of the weakness. But what exactly you are seeing in terms of customer behavior, assuming Q1, that's all pre tariff, right? Thank you. Bertrand LoyCEO, President & Chairman at Entegris00:26:21Yes, Charles. Yes. So the Q1 performance has nothing to do with tariffs indeed. The top line came in slightly below guidance. And as we've said, it really comes from much softer demand than originally expected for our Fluid Handling and Food products. Bertrand LoyCEO, President & Chairman at Entegris00:26:43You know that these products I mean demand for these products is linked to new fab construction. We have seen significant slowdown in new fab construction activity in all markets, frankly, but that's especially true in China, in Japan, in Korea. And as a result, we've seen a much more significant contraction in the revenue for those products in Q1. Having said that, remember that we grew in spite of this CapEx headwind, we grew 5% year on year. As I mentioned, strong performance from Materials Solutions, up 8%, strong performance of APS. Bertrand LoyCEO, President & Chairman at Entegris00:27:27I mean, microcontamination had a very solid quarter. It was offset obviously by the decline in the CapEx products that I mentioned. And then finally, one thing that I just want to be sure you remember, Charles, when you're looking at our Q1 performance, especially the year on year, remember that there was a new there were new U. S. Export restrictions announced in December, and we had quantified that impact to be about $10,000,000 on a quarterly basis. Bertrand LoyCEO, President & Chairman at Entegris00:27:58So we saw that in Q1. And then we had some adverse impact from foreign exchange as well. And I think Linda mentioned that year on year, it was about $5,000,000 So certainly those last two points don't explain the miss, right? I mean we're expecting these impacts when setting guidance. But I think it's useful context when you look at Q1 results on a year on year basis. Bertrand LoyCEO, President & Chairman at Entegris00:28:25And I would argue that the overall performance is pretty solid in that context. Charles ShiManaging Director - Senior Analyst at Needham & Company00:28:32Thanks, Batshuay. Operator00:28:35We'll take our next question from Atif Malik. Please go ahead from Citi. Please go ahead. Your line is open. Atif MalikAnalyst at Citigroup00:28:44Thank you for taking my question. The first one for Linda. Linda, can you walk us through you talked about the revenue impact from China, but on the gross margin, the 100 basis points sequential decline to the June. Can you help us understand the puts and takes on the cost side impact from tariffs? Linda LaGorgaSenior VP & CFO at Entegris00:29:04Yes. Thank you for that question. So let me first, since you framed it and let me frame it overall. We're in a dynamic environment and our guidance is capturing that dynamic environment. To your point on how the tariffs play into gross margin, we do have tariffs on U. Linda LaGorgaSenior VP & CFO at Entegris00:29:24S. Imports. And we do import some raw materials and finished goods. So we are very confident in the plan we have to mitigate those tariff impacts over time on U. S. Linda LaGorgaSenior VP & CFO at Entegris00:29:38Imports through select pricing surcharges, different duty programs, focus on regionalized in sourcing to limit that tariff impact. But in the near term, there's likely to be some modest impact to our Q2 gross margins as we progress our mitigation plans because there is a bit of a timing lag and this is reflected in our guidance. So getting back to a little bit more of a big picture between Q1 and Q2 on the margin, you're correct in saying there's a bit of an impact from tariffs. But as we look across gross margins and look forward, there's going to be puts and takes. So I want to bring you back to looking forward. Linda LaGorgaSenior VP & CFO at Entegris00:30:19There's the volume leverage as we progress throughout the year. We're going to continue to focus on productivity. We'll continue to have inefficiencies this year in Taiwan and Colorado, but we're going to get most of that behind us by 2026. And we're going to continue to manage our cost structure, including gross margin in the context of our Analyst Day. So while there's slightly lower gross margins in Q2, we still expect that in 2025, our overall gross margins will be up modestly compared to 2024. Atif MalikAnalyst at Citigroup00:30:53Very helpful. And one for Bertrand. Bertrand, I fully understand you guys are not commenting on full year given the macro uncertainty. But just kind of broad strokes, if we how do you see that the CapEx environment going on for second half? Some of the CapEx peers have talked about maybe flattish outlook for CapEx in second half. Atif MalikAnalyst at Citigroup00:31:15Some of them are down in second half versus first half. If you can just kind of give your big picture thoughts on the CapEx trend. Bertrand LoyCEO, President & Chairman at Entegris00:31:24Yes. Mean, look, I mean, that when we started the year pre impact from tariffs and the growing uncertainty around that, we probably already had some fairly conservative expectations when it comes to the industry CapEx. I would argue that the current prevailing uncertainty is, in my opinion, going to put some additional pressure on CapEx in the second half of the year. Having said that, we expect that to be somewhat offset by the steady improvement that we expect to see in wafer starts. So again, all of that is our high level considerations that do not really incorporate any considerations and any changes coming from the uncertainty around the tariff and the indirect impact from tariffs. Thanks. Operator00:32:27We'll take our next question from Timothy Arcuri with UBS. Please go ahead. Your line is open. Timothy ArcuriManaging Director at UBS Group00:32:35Thanks a lot. Bertrand, I also wanted to ask about how quickly this revenue can come back. I mean, why does this not sort of is this not the match that lights the fire for them to qualify local alternatives? I know that not all of what you sell, there's not a local alternative for, you know, all the way you sell, obviously. But there are local alternatives for some of what you sell. And so do they actually have enough inventory on hand to just outright be able to continue to operate with China not accepting shipments? Mean this is a pretty big number relative to what your China exposure is. So Bertrand LoyCEO, President & Chairman at Entegris00:33:14yes, thanks. Yes. Look, it's a fair question, Tim. I think the burden is going be on us to be very proactive and very effective in transitioning the China demand to some of those alternate Asia sites. I think that those Asia manufacturing alternatives have a lot to offer. Bertrand LoyCEO, President & Chairman at Entegris00:33:38I mean think about the big investment we made in Taiwan, recent investments in Japan and Korea. So we are really offering state of the art manufacturing capabilities. We believe we are offering, again, products that are very uniquely enabling device performance and very uniquely enabling the yields of our customers, and that has value. And we certainly hope that this is the point of view that our China customers share with us. And again, all indications are based on discussions we've been having with them in the last months, all indications are that they are very eager to qualify those alternatives. Bertrand LoyCEO, President & Chairman at Entegris00:34:29I mean the proof will be in the pudding obviously, but I optimistic. Timothy ArcuriManaging Director at UBS Group00:34:36Okay. Got it. And then just a two part question. So one, what is the clean revenue guide then for June? So is the clean revenue guide something like $800,000,000 minus this issue? Timothy ArcuriManaging Director at UBS Group00:34:46So is that the baseline that we should then kind of I mean, obviously, we have to assume how quickly this 50,000,000 comes back. But is the $800,000,000 like that's the real sort of demand based guidance for June? That's the first part of the question. And then the second part is what is your NAND exposure right now? Do you think any of the weak June quarter is related to NAND? Thanks. Bertrand LoyCEO, President & Chairman at Entegris00:35:07Yes. So in reverse order, the NAND exposure right now for us is about 10% of our revenue roughly. And in terms of breaking down our Q2 guidance between China and non China, I mean, think we've provided a lot of details. I'm not going to go into a lot more details than my answer to the first question. But directionally, the way you think about it is not too far off. Timothy ArcuriManaging Director at UBS Group00:35:39Okay. Thank you. Operator00:35:42We'll take our next question from Chris Parkinson with Wolfe Research. Please go ahead. Your line is open. Christopher ParkinsonManaging Director at Wolfe Research, LLC00:35:50Great. Thank you so much. You hit on a few of these, but just to dig down a little bit deeper. In terms of your second half assumptions of just what you're looking at from the customer level, can you sit on some non tariff related factors, specifically, Mali, no transitions? You know, is there anything that has actually changed in the last, you know, five to six weeks that would, you know, ultimately, you know, further evolve your views on those? Christopher ParkinsonManaging Director at Wolfe Research, LLC00:36:16And then perhaps just a quick update on the Taiwan ramp as well would be very helpful. Thank you. Bertrand LoyCEO, President & Chairman at Entegris00:36:24Yes. So in terms of the benefits that we expect to get from the node transitions, as I said, we are very encouraged by our recent discussions with our customers. All of the major node transitions we're expecting in Memory and Logic seems to be still on time. And that's positive because it provides an opportunity for us to increase our content per wafer, and that should actually help us sustain very attractive revenue levels in second half of the year. Having said that, I mean, you're right that today, there's still a lot of unknown around the indirect impact coming from tariffs. Bertrand LoyCEO, President & Chairman at Entegris00:37:11I mean, there is recession, which usually could correlate with a slower demand environment for semiconductors, but nobody has been able to really quantify that, and I'm certainly not equipped to do that either. So that's something we're going to be obviously keeping an eye on. And then there was a third part to your question, which I forgot. Christopher ParkinsonManaging Director at Wolfe Research, LLC00:37:39Taiwan. Bertrand LoyCEO, President & Chairman at Entegris00:37:40Taiwan, yes. So Taiwan, yes, we're making actually really good progress in our Cao Xiong facility. Remember that in 2024, we completed a number of product qualifications, high purity containers, deposition materials, and we initiated qualifications for liquid filters. In 2025, the focus is to complete the remaining qualifications for all major liquid filters. And when it's all said and done, I would say that I would expect the run rate, the revenue run rate exiting 2025 out of Caoxime to exceed $120,000,000 Remember, the last year, the revenue on a full year basis was something closer to $15,000,000 So a lot of progress is expected in 2025. Christopher ParkinsonManaging Director at Wolfe Research, LLC00:38:43That's very helpful. And just in terms of the intermediate term, obviously, once again, I understand the world is changing. But to the best as we sit here today, how are you thinking about The U. S. Market just given the rhetoric of the current administration, trade, the potential for increases in foreign investment? Christopher ParkinsonManaging Director at Wolfe Research, LLC00:39:00Just any updated thoughts just holistically on those topics would be helpful and just how that relates to your thoughts on the Colorado Springs opportunity? Thank you. Bertrand LoyCEO, President & Chairman at Entegris00:39:12Yes, that's a fair question. I think this something that we are keeping a very, very close eye on. External market research and our own views is that the new fab construction activity will be significantly down this year in 2025. It's true, as I mentioned, in China, Japan, but also will be likely true here in North America. So right now, when it comes to our Colorado investment, we are going full speed ahead with our Phase one investment. Bertrand LoyCEO, President & Chairman at Entegris00:39:49We have actually hit a number of milestones. So feeling really good about the progress and we're going be starting customer qualifications in the second half of this year. We expect production late this year, early next year. Now when it comes to the timing of Phase two, so the next phase of investment, we're going to be looking at the level of new fab activity in The U. S. Bertrand LoyCEO, President & Chairman at Entegris00:40:20We're going to take that into consideration and we will finalize our decisions later this year. So no decision at this point. Christopher ParkinsonManaging Director at Wolfe Research, LLC00:40:30Very helpful. Thank you so much. Operator00:40:33We'll take our next question from John Roberts with Mizuho. Please go ahead. Your line is open. John RobertsManaging Director at Mizuho Financial Group00:40:41Thank you. Sometimes you characterize the business at a high level in terms of mainstream versus advanced applications. I assume advanced is not that affected by China or much less affected, but maybe you could just give us kind of the tone of business in those kind of two big buckets. Bertrand LoyCEO, President & Chairman at Entegris00:40:59Yes. I mean, look, our Advanced Logic business remained very, very strong. I mean, you look at our Q1 performance, our revenue in Taiwan was very strong year on year as we would expect and as we capitalized on increased demand linked to AI and advanced logic application. But it's true that we continue to face some headwind from still fairly reduced levels of operations in mainstream fabs. And it was true pretty much around the world, including China John RobertsManaging Director at Mizuho Financial Group00:41:45Yes. And then I think the comment period ends today for the new semiconductor tariffs. Have the consultants summarized that for you? Or is there anything that kind of maybe sticks out as unexpected in what may have been submitted in terms of public comments? Bertrand LoyCEO, President & Chairman at Entegris00:42:05No. As I said, I think right now, there's just a lot of unknown, a lot of uncertainty. I think most of our customers are taking a very prudent approach, frankly, when they think about the balance of the year. And that's the reason why we didn't feel equipped to update our annual guidance. I think hopefully, things will settle down. Bertrand LoyCEO, President & Chairman at Entegris00:42:31And hopefully, in a few months, we will be in a better position to update our full year guidance. John RobertsManaging Director at Mizuho Financial Group00:42:40Thank you. Operator00:42:43We'll take our next question from Mike Harrison with Seaport Research Partners. Please go ahead. Your line is open. Mike HarrisonManaging Director and Senior Chemicals Analyst at Seaport Research Partners00:42:51Hi, good morning. I was hoping we could dig in a little bit on the growth that you're seeing within the microcontamination control portion of the ATS segment. I feel like sometimes you have pretty good visibility on your ability to grow in that business. How is visibility today compared to what you think of as normal? Are you seeing any delays or changes in customer order patterns? Mike HarrisonManaging Director and Senior Chemicals Analyst at Seaport Research Partners00:43:20Any change in filter usage or anything that suggests that maybe your customers are trying to thrift or extend the life of some of those filters? Any color there would be appreciated. Bertrand LoyCEO, President & Chairman at Entegris00:43:34Yes. It's a good question, Mike. I think I think you know the answer to the question. I think in advanced Logic, there's still this intense focus on defect management, which is really driving the right behaviors when it comes to using the most advanced filters, proactively changing them and doing the right level of preventing preventative maintenance. We are seeing that same behavior now in HBM. Bertrand LoyCEO, President & Chairman at Entegris00:44:09And I mentioned that in my prepared remarks, highlighting a new IPA purifier opportunities. So it's great to see that as device complexity increases, we are starting to see a greater focus, greater interest in the microcontamination control solutions. In the case of this HBM opportunity, we were asked to help reduce the level of trace metal contaminations from three parts per trillion to something less than one part per trillion. I think our solutions actually help the customer get to 0.5 parts per trillion, which put that in context, there's about half a drop of water in 20 Olympic sized swimming pools. So they're the types of solutions that we are developing. Bertrand LoyCEO, President & Chairman at Entegris00:45:11We are very proud of the value proposition that our products offer. And we're pleased to see this greater level of focus on purity. But you're right that when utilization levels are low as they are right now in mainstream, customers will try to stretch the lifetime of the filters. And that's one of the many reasons why our mainstream business has sluggish frankly in the last couple of years now. Mike HarrisonManaging Director and Senior Chemicals Analyst at Seaport Research Partners00:45:49All right. And then for Linda, I know you don't typically talk about the FX impact. You mentioned, I believe, some top line impacts in the first quarter. But with the big swings that we've seen in the dollar, can you talk a little bit about the impact you might expect to see in the second quarter in other parts of the P and L and at the EBITDA level? Is that something that's leading to some margin weakness in the second quarter as well? Linda LaGorgaSenior VP & CFO at Entegris00:46:21Yes. Thanks, Mike. First, historically, we have not had a meaningful impact on our business from FX. And again, you're asking about other parts of the P and L. But as I mentioned, on the sales side, than 75% of our sales are USD. Linda LaGorgaSenior VP & CFO at Entegris00:46:39When you get below sales into the gross margin, which could flow down into EBITDA, when we do have significant and fast moves, we do see some impact, but it has been manageable. So there could be a little bit of impact in Q2, but that is not the primary reason why I'm projecting what we're projecting for Q2 in our gross margin. As I said, primarily, I'd focus on some of the volume deleveraging and then the impact of the direct tariffs from U. S. Imports and a bit of a timing lag. Mike HarrisonManaging Director and Senior Chemicals Analyst at Seaport Research Partners00:47:15Thanks very much. Operator00:47:19We'll take our next question from Aleksey Yefremov with KeyBanc Capital Markets. Please go ahead. Your line is open. Ryan PirnatManaging Director at KeyBanc Capital Markets00:47:28Thanks and good morning, Bertrand. This is Ryan on for Aleksey. Just wanted to ask one on China First. Did you guys see any evidence of pre buying kind of ahead of all the restrictions that have gone in? I understand you mentioned that they're eager to qualify some of your product from alternative sourcing. Ryan PirnatManaging Director at KeyBanc Capital Markets00:47:46But just wondering if there was any pre buying that you kind of saw ahead of all this? Bertrand LoyCEO, President & Chairman at Entegris00:47:52No, we didn't really see much of that. And when it comes to Q2, obviously, as I said, I think right now, all of our shipments ex U. S. Are on hold. So there's absolutely no pre buying going on right now. And there was none of that in Q1 either. Ryan PirnatManaging Director at KeyBanc Capital Markets00:48:13Understood. Okay. And then I just wanted to ask on Advanced Packaging. I mean, it seems like growth is kind of accelerating across the space. Was hoping you might be able to remind us what the size of that business is for you today, maybe what growth kind of looked like in 1Q and kind of what your outlook is like? Thank you. Bertrand LoyCEO, President & Chairman at Entegris00:48:32Yes. Good question, Ryan. So advanced packaging for us is still a fairly small market, right? But as we have mentioned multiple times, it's growing very fast. It actually did more than double in 2024. Bertrand LoyCEO, President & Chairman at Entegris00:48:50We saw actually a doubling in Q1 versus actually more than a doubling in Q1 of this year versus Q1 of last year. When we think about the full year 2025, we expect this business year on year to grow more than 25%. And the two big drivers for us in 2025 are expected to be of high viscosity dispense solutions. That's an APS product. And then the other one would be HBM slurries for TSV applications. Bertrand LoyCEO, President & Chairman at Entegris00:49:30So again, feeling good about the momentum, feeling good about our ability to uncover new areas where we can contribute value, still small, but growing very fast. Operator00:49:52And there are no further questions on the line at this time. I'll turn the program back to Bill Seymour for any closing remarks. Bill SeymourVice President, Investor Relations at Entegris00:50:00Thank you for joining our call today. Please reach out to me personally if you need to follow-up. With that, have a great day and you can disconnect. Operator00:50:10Thank you. This concludes today's Entegris first quarter twenty twenty five earnings conference call. Please disconnect your line at this time. Have a wonderful day.Read moreParticipantsExecutivesBill SeymourVice President, Investor RelationsBertrand LoyCEO, President & ChairmanLinda LaGorgaSenior VP & CFOAnalystsMelissa WeathersDirector - Equity Research at Deutsche BankCharles ShiManaging Director - Senior Analyst at Needham & CompanyAtif MalikAnalyst at CitigroupTimothy ArcuriManaging Director at UBS GroupChristopher ParkinsonManaging Director at Wolfe Research, LLCJohn RobertsManaging Director at Mizuho Financial GroupMike HarrisonManaging Director and Senior Chemicals Analyst at Seaport Research PartnersRyan PirnatManaging Director at KeyBanc Capital MarketsPowered by