Semiconductor materials supplier Entegris (NASDAQ: ENTG) missed Wall Street’s revenue expectations in Q1 CY2025, with sales flat year on year at $773.2 million. Next quarter’s revenue guidance of $755 million underwhelmed, coming in 8.4% below analysts’ estimates. Its non-GAAP profit of $0.67 per share was 2.1% below analysts’ consensus estimates.
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Entegris (ENTG) Q1 CY2025 Highlights:
- Revenue: $773.2 million vs analyst estimates of $789.9 million (flat year on year, 2.1% miss)
- Adjusted EPS: $0.67 vs analyst expectations of $0.68 (2.1% miss)
- Adjusted EBITDA: $220.7 million vs analyst estimates of $226.6 million (28.5% margin, 2.6% miss)
- Revenue Guidance for Q2 CY2025 is $755 million at the midpoint, below analyst estimates of $824.6 million
- Adjusted EPS guidance for Q2 CY2025 is $0.64 at the midpoint, below analyst estimates of $0.71
- Operating Margin: 15.8%, in line with the same quarter last year
- Free Cash Flow Margin: 4.2%, down from 10.4% in the same quarter last year
- Inventory Days Outstanding: 147, up from 126 in the previous quarter
- Market Capitalization: $12.56 billion
Bertrand Loy, Entegris’ President and Chief Executive Officer, said: “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.”
Company Overview
With fabs representing the company’s largest customer type, Entegris (NASDAQ: ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.
Sales Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Entegris’s sales grew at an excellent 15% compounded annual growth rate over the last five years. Its growth beat the average semiconductor company and shows its offerings resonate with customers. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore's Law) could make yesterday's hit product obsolete today. Entegris’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 4.5% over the last two years. 
This quarter, Entegris’s $773.2 million of revenue was flat year on year, falling short of Wall Street’s estimates. Company management is currently guiding for a 7.1% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 7.1% over the next 12 months. While this projection indicates its newer products and services will spur better top-line performance, it is still below average for the sector.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Entegris’s DIO came in at 147, which is 18 days above its five-year average, suggesting that the company’s inventory has grown to higher levels than we’ve seen in the past.
Key Takeaways from Entegris’s Q1 Results
We struggled to find many positives in these results. Its revenue guidance for next quarter missed significantly and its revenue fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 6% to $78 immediately following the results.
The latest quarter from Entegris’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.
