second quarter of 2026
Filed Aug 5, 2026Revenue of $1,248 million, above the high end of guidance; GAAP net income of $175 million and net income per diluted share of $2.41, each above the high end of guidance; Adjusted EBITDA of $358 million and Non-GAAP net earnings per diluted share of $3.30, each above the high end of guidance.
MKS reported revenue and key profitability metrics at or above the high end of its guided ranges, with stated accelerated double-digit year-over-year revenue growth across each end market, higher margins versus both Q1 2026 and Q2 2025, and third-quarter guidance for $1,350 million, plus or minus $40 million, of revenue.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total net revenuesGAAP | $1,248 million | – | – |
| Products revenueGAAP | $1,104 million | – | – |
| Services revenueGAAP | $144 million | – | – |
| Gross marginGAAP | 47.6% | – | – |
| Income from operationsGAAP | $251 million | – | – |
| Operating marginGAAP | 20.1% | – | – |
| Operating expensesGAAP | $344 million | – | – |
| Net incomeGAAP | $175 million | – | – |
| Net income per diluted shareGAAP | $2.41 per diluted share | – | – |
| Non-GAAP income from operationsnon-GAAP | $320 million | – | – |
| Non-GAAP operating marginnon-GAAP | 25.6% | – | – |
| Non-GAAP operating expensesnon-GAAP | $275 million | – | – |
| Non-GAAP net earningsnon-GAAP | $232 million | – | – |
| Non-GAAP net earnings per diluted sharenon-GAAP | $3.30 per diluted share | – | – |
| Adjusted EBITDAnon-GAAP | $358 million | – | – |
| Adjusted EBITDA marginnon-GAAP | 28.6% | – | – |
| Net cash provided by operating activitiesGAAP | $243 million | – | – |
| Free cash flownon-GAAP | $188 million | – | – |
| Purchases of property, plant and equipmentGAAP | $(55) million | – | – |
| Six months total net revenuesGAAP | $2,326 million | – | – |
| Six months net incomeGAAP | $258 million | – | – |
| Six months net income per diluted shareGAAP | $3.60 per diluted share | – | – |
| Six months Non-GAAP net earningsnon-GAAP | $389 million | – | – |
| Six months Non-GAAP net earnings per diluted sharenon-GAAP | $5.61 per diluted share | – | – |
| Six months net cash provided by operating activitiesGAAP | $296 million | – | – |
| Six months free cash flownon-GAAP | $217 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| SemiconductorManagement cited AI-driven investment levels across semiconductor and advanced packaging applications and rapidly growing order volumes. | $554 million | – | – |
| Electronics & PackagingManagement said it delivered accelerated double-digit year-over-year revenue growth across each end market and cited AI-driven investment in advanced packaging applications. | $381 million | – | – |
| Specialty IndustrialManagement said it delivered accelerated double-digit year-over-year revenue growth across each end market. | $313 million | – | – |
Third Quarter 2026 outlook
- Revenue$1,350 million, plus or minus $40 million
- Gross margin47.0%, plus or minus 1.0%
- Operating expensesGAAP operating expenses of $346 million, plus or minus $5 million and Non-GAAP operating expenses of $280 million, plus or minus $5 million
- NoteGAAP net income of $201 million, plus or minus $23 million
- NoteNon-GAAP net earnings of $257 million, plus or minus $22 million
- NoteGAAP net income per diluted share of $2.73, plus or minus $0.31
- NoteNon-GAAP net earnings per diluted share of $3.58, plus or minus $0.31
- NoteAdjusted EBITDA of $395 million, plus or minus $28 million
Capital returns
- Cash dividends per common share of $0.25
- Dividend payments of $(17) million
- In August 2026, the Company made a voluntary principal prepayment of $100 million on its USD term loan B.
What drove it
- Management said MKS delivered accelerated double-digit year-over-year revenue growth across each of its end markets.
- Management cited AI-driven investment levels intensifying across semiconductor and advanced packaging applications.
- Management cited rapidly growing order volumes, broad technology capabilities, deep electronics-ecosystem relationships, and enhanced capacity to deliver to customer demand.
- Revenue and key profitability metrics came in at or above the high end of guided ranges, according to management.
Concerns
- The guidance is based on the current business environment, including the impact of U.S. import tariffs and retaliatory actions taken by other countries through the date of the release.
- The trading price of common stock during the second quarter satisfied the stock price conversion condition for the convertible senior notes; the notes are convertible at noteholders' option at any time during the third quarter of 2026 and were classified as short-term debt, net of issuance costs, at June 30, 2026.
- Inventories were $1,033 million at June 30, 2026, compared with $921 million at December 31, 2025.
- Trade accounts receivable, net were $830 million at June 30, 2026, compared with $651 million at December 31, 2025.
- Amounts in the release are preliminary and subject to finalization before the filing of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2026.
What to watch
- Third Quarter 2026 revenue guidance of $1,350 million, plus or minus $40 million.
- Third Quarter 2026 gross-margin guidance of 47.0%, plus or minus 1.0%.
- Third Quarter 2026 Adjusted EBITDA guidance of $395 million, plus or minus $28 million.
- The noteholder conversion option on the $1.4 billion of convertible senior notes during the third quarter of 2026.
- The effect of U.S. import tariffs and retaliatory actions taken by other countries on the business environment.
- Order-volume momentum and AI-driven investment across semiconductor and advanced packaging applications.
Balance sheet and cash flow
- Cash and cash equivalents of $611 million at June 30, 2026, compared with $675 million at December 31, 2025.
- $1.5 billion of secured term loan principal outstanding at June 30, 2026.
- $1.4 billion of convertible senior notes outstanding at June 30, 2026.
- € 1.0 billion of senior notes outstanding at June 30, 2026.
- Up to $1.0 billion of additional borrowing capacity under a revolving credit facility, subject to certain leverage ratio requirements.
- Short-term debt of $1,399 million at June 30, 2026, compared with $51 million at December 31, 2025.
- Long-term debt, net of $2,544 million at June 30, 2026, compared with $4,150 million at December 31, 2025.
- Trade accounts receivable, net of $830 million at June 30, 2026, compared with $651 million at December 31, 2025.
- Inventories of $1,033 million at June 30, 2026, compared with $921 million at December 31, 2025.
- Net cash provided by operating activities of $243 million.
- Purchases of property, plant and equipment of $(55) million.
- Free cash flow of $188 million.
Analysis
MKS reported second-quarter revenue of $1,248 million, with revenue of $554 million in Semiconductor, $381 million in Electronics & Packaging, and $313 million in Specialty Industrial. Management described accelerated double-digit year-over-year revenue growth across each end market and pointed to AI-driven investment in semiconductor and advanced packaging applications, rapidly growing order volumes, and enhanced capacity to meet demand. Product revenue was $1,104 million and services revenue was $144 million.
Profitability improved from both comparison periods reported in the release. GAAP gross margin was 47.6%, GAAP operating margin was 20.1%, and GAAP net income was $175 million, or $2.41 per diluted share. On a non-GAAP basis, operating margin was 25.6%, net earnings were $232 million, or $3.30 per diluted share, and Adjusted EBITDA was $358 million with a 28.6% margin. The company stated that revenue, GAAP net income, GAAP diluted EPS, Adjusted EBITDA, and non-GAAP diluted EPS were each at or above the high end of guidance.
Cash generation strengthened in the quarter, with net cash provided by operating activities of $243 million and free cash flow of $188 million after purchases of property, plant and equipment of $(55) million. Cash and cash equivalents were $611 million at June 30, 2026. The balance sheet included $1.5 billion of secured term loan principal, $1.4 billion of convertible senior notes, and € 1.0 billion of senior notes outstanding. The company also made a voluntary principal prepayment of $100 million on its USD term loan B in August 2026.
A key balance-sheet issue is the convertible notes. Satisfaction of the stock price conversion condition made the convertible senior notes convertible at noteholders' option during the third quarter of 2026, and they were classified as short-term debt, net of issuance costs, at June 30, 2026. Short-term debt was $1,399 million while long-term debt, net was $2,544 million. Receivables and inventories were $830 million and $1,033 million, respectively, at June 30, 2026.
For the third quarter, MKS guided to revenue of $1,350 million, plus or minus $40 million, gross margin of 47.0%, plus or minus 1.0%, GAAP net income of $201 million, plus or minus $23 million, and Adjusted EBITDA of $395 million, plus or minus $28 million. Guidance incorporates the current business environment, including U.S. import tariffs and retaliatory actions taken by other countries through the release date. Execution against this guide, continued order-volume growth, margin delivery, working-capital levels, and convertible-note conversion activity are the principal reported items to monitor.
Management, verbatim
MKS delivered accelerated double-digit year-over-year revenue growth across each of our end markets in the second quarter, demonstrating our foundational role as an enabler of advanced electronics.
John T.C. Lee, President and Chief Executive Officer
As AI-driven investment levels intensify across semiconductor and advanced packaging applications, our momentum is continuing to build, including rapidly growing order volumes.
John T.C. Lee, President and Chief Executive Officer
Our second quarter revenue and key profitability metrics once again came in at or above the high end of our guided ranges, underscoring our strong execution and favorable position in a robust demand environment.
Ram Mayampurath, Executive Vice President and Chief Financial Officer
Not in the filing
stated, not guessed- Prior-quarter and prior-year percentage changes for revenue, segment revenue, profitability metrics, cash flow, and margins were not printed on their respective line items.
- Prior Q2 2026 guidance was not provided, so reported results cannot be compared with prior guidance in vs_prior_guidance.
- Third Quarter 2026 tax-rate guidance was not provided.
- Quantified backlog, bookings, order volumes, and book-to-bill were not provided.
- A second-quarter common-stock repurchase amount was not reported as a numeric figure.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.