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• Revenue: $935 million for Q4 2024, up 4% sequentially and 5% year over year.

• Gross Margin: 47.2% for Q4 2024, about the midpoint of guidance.

• Net Earnings: $146 million for Q4 2024, or $2.15 per share.

• Free Cash Flow: $125 million for Q4 2024, 13% of revenue.

• Semiconductor Revenue: $400 million for Q4 2024, up 6% sequentially and 10% year over year.

• Electronics and Packaging Revenue: $254 million for Q4 2024, up 10% sequentially and 13% year over year.

• Specialty Industrial Revenue: $281 million for Q4 2024, down 2% sequentially and 8% year over year.

• Operating Margin: 21.3% for Q4 2024.

• Adjusted EBITDA: $237 million for Q4 2024, 25.3% margin.

• Full Year Revenue: $3.6 billion for 2024, down 1% year over year.

• Full Year Gross Margin: 47.6%, up 190 basis points year over year.

• Full Year Free Cash Flow: $410 million, an increase of $178 million year over year.

• First Quarter 2025 Revenue Guidance: $910 million plus or minus $40 million.

• First Quarter 2025 Gross Margin Guidance: 46.5% plus or minus 100 basis points.

• First Quarter 2025 Net Earnings per Share Guidance: $1.40 plus or minus $0.27.

• Warning! GuruFocus has detected 7 Warning Signs with MKSI.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• MKS Instruments Inc (NASDAQ:MKSI) achieved a 190 basis point expansion in gross margin despite flat year-over-year revenue.

• The company increased earnings per share by 49% and improved free cash flow by $178 million.

• MKS Instruments Inc (NASDAQ:MKSI) successfully reduced its annual interest expense run rate by over $130 million through strategic financial actions.

• The company reported a 5% year-over-year revenue increase in Q4 2024, driven by double-digit growth in electronics, packaging, and semiconductor markets.

• MKS Instruments Inc (NASDAQ:MKSI) maintained strong customer engagement and design wins, positioning itself well for future market recovery.

Negative Points

• The specialty industrial market saw a 2% sequential revenue decline, with broader industrial market softness impacting results.

• Revenue from the electronics and packaging market is expected to decline by 4% in Q1 2025 due to seasonality associated with the Lunar New Year.

• The semiconductor market remains challenged, with NAND revenue at historically low levels despite some recovery signs.

• Gross margin is expected to decrease in Q1 2025 due to a higher concentration of equipment sales and seasonal factors.

• The company faces ongoing challenges in managing leverage, with a net leverage ratio of 4.3 times, although deleveraging remains a priority.