Entegris Misses Wall Street’s Revenue Expectations in Q1 CY2025

Entegris (NASDAQ:ENTG), a leading semiconductor materials supplier, has reported disappointing quarterly results for the first quarter of calendar year 2025. The company’s revenue growth has slowed down significantly compared to its five-year trend, raising concerns among investors.

Revenue Misses Expectations

Entegris’ revenue of $773.2 million in Q1 CY2025 was flat year on year, falling short of Wall Street’s estimates by 2.1%. This is a stark contrast to the company’s impressive sales growth over the last five years, which has averaged an annualized rate of 15%. However, Entegris’ revenue has shown annualized declines of 4.5% over the last two years, indicating a slowdown in growth.

The lackluster performance was further exacerbated by the company’s guidance for next quarter’s revenue, which came in at $755 million at the midpoint, below analyst estimates of $824.6 million. This represents an 8.4% miss compared to Wall Street’s expectations. The adjusted earnings per share (EPS) guidance for Q2 CY2025 is also below analyst estimates, standing at $0.64 at the midpoint.

Financial Performance

Entegris’ non-GAAP profit of $0.67 per share was 2.1% below analysts’ consensus estimates. The company’s adjusted EBITDA margin came in at 28.5%, which is a slight miss compared to analyst expectations of 30.6%. However, the operating margin remained unchanged from the same quarter last year at 15.8%.

Market Capitalization and Inventory

Entegris’ market capitalization stands at $12.56 billion, making it one of the larger semiconductor suppliers in the industry. The company’s inventory days outstanding (DIO) has increased to 147, which is 18 days above its five-year average. This suggests that Entegris’ inventory levels have grown significantly over the past quarter.

CEO’s Statement

Bertrand Loy, Entegris’ President and Chief Executive Officer, stated: "Our first quarter revenue grew 5 percent year-on-year, excluding divestitures, with strong demand for our CMP consumables and micro contamination control solutions. Gross margin, EBITDA margin, and non-GAAP EPS were within guidance."

Long-term Growth

While Entegris’ short-term results may be disappointing, its long-term growth prospects remain promising. The company’s sales have averaged an annualized rate of 15% over the last five years, beating the average semiconductor company. This indicates that Entegris’ offerings continue to resonate with customers in the rapidly evolving semiconductor industry.

Semiconductor Industry Trends

The semiconductor industry is known for its cyclical nature, with periods of high growth followed by periods of revenue contractions. Long-term investors should be prepared for these fluctuations and focus on companies with a strong track record of innovation and growth.

Key Takeaways from Entegris’ Q1 Results

Entegris’ Q1 results were softer than expected, with the company’s revenue guidance for next quarter missing significantly. The stock traded down 6% to $78 immediately following the results. While this may create an opportunity to invest in the stock, it is essential to consider the company’s long-term business quality and valuation.

Conclusion

Entegris’ Q1 CY2025 results were disappointing, with revenue growth slowing down significantly compared to its five-year trend. However, the company’s long-term growth prospects remain promising, driven by its strong offerings in the semiconductor industry. Investors should consider Entegris as a potential investment opportunity, but it is essential to evaluate the company’s valuation and business quality before making any investment decisions.