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MKSI Q3 Earnings Beat Estimates on Strong Semiconductor Growth
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Key Takeaways
MKSI's Q3 earnings surged 116.6% to $4.18 per share, while revenues jumped 43% to $1.41B.
Semiconductor revenues climbed 53.7% to $638M, driven by AI demand and robust orders.
MKS expects Q4 revenues of $1.49B, earnings of $5 per share and adjusted EBITDA of $461M.
MKS Inc. (MKSI - Free Report) reported third-quarter 2026 non-GAAP earnings of $4.18 per share, up 116.6% year over year. The figure beat the Zacks Consensus Estimate by 14.84%.
Revenues surged 43% year over year to $1.41 billion and surpassed the consensus mark by 4.12%. Growth was driven by robust demand across Semiconductor and Electronics & Packaging, supported by AI-related investments. Adjusted EBITDA margin expanded to 30.7%, reflecting improved operating leverage and stronger profitability.
MKSI’s Q3 Revenue Mix Strengthens
Product revenues, which accounted for 89.5% of total revenues, increased 47% year over year to $1.26 billion. The performance reflected strong demand across the company's semiconductor, electronics and packaging, and specialty industrial end markets.
Services revenues totaled $149 million, representing 10.5% of revenues. The figure increased 16.4% from the year-ago quarter, contributing to the company's broad-based top-line growth.
Semiconductor revenues surged 53.7% year over year to $638 million and represented 45.2% of total revenues. Management highlighted accelerating AI-driven demand across semiconductor manufacturing and advanced packaging applications, supported by robust orders and new design wins.
Electronics & Packaging revenues increased 43.6% to $415 million, contributing 29.4% of revenues. Specialty Industrial revenues rose 26.8% to $360 million and accounted for 25.5% of the quarterly total. Management noted that revenues across all three end markets were at or above the high end of guidance, underscoring broad demand strength.
MKSI's Operating Details
For the third quarter of 2026, gross margin expanded 110 basis points year over year to 47.7%.
Non-GAAP operating expenses were $281 million compared with $256 million a year earlier. The increase in expenses accompanied substantial revenue growth, allowing the company to generate stronger operating leverage.
Adjusted EBITDA climbed 80.8% year over year to a record $434 million. Adjusted EBITDA margin rose 640 basis points to 30.7%, reflecting higher revenues and improved profitability.
Non-GAAP operating income increased 91.7% to $393 million, while the non-GAAP operating margin improved 700 basis points to 27.8%. GAAP income from operations increased to $326 million from $138 million in the prior-year quarter. The operating margin expanded 910 basis points to 23.1%, benefiting from the higher revenue base and gross margin improvement.
MKSI's Cash Flow and Balance Sheet Improve
As of Sept. 30, 2026, MKS had cash and cash equivalents of $676 million compared with $611 million as of June 30, 2026.
As of Sept. 30, 2026, long-term debt totaled $2.38 billion.
Net cash provided by operating activities was $292 million in the third quarter, up 48.2% year over year.
MKS' Q4 Outlook Points to Continued Momentum
For the fourth quarter of 2026, MKS expects revenues of $1.49 billion, plus or minus $40 million. Gross margin is projected to be 47.5%, plus or minus 1 percentage point, while non-GAAP operating expenses are expected to be $288 million, plus or minus $5 million.
The company forecasts non-GAAP earnings of $5 per share, plus or minus 38 cents. Non-GAAP net earnings are projected to be $352 million, plus or minus $27 million.
Adjusted EBITDA is expected to reach $461 million, plus or minus $29 million.
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MKSI Q3 Earnings Beat Estimates on Strong Semiconductor Growth
Key Takeaways
MKS Inc. (MKSI - Free Report) reported third-quarter 2026 non-GAAP earnings of $4.18 per share, up 116.6% year over year. The figure beat the Zacks Consensus Estimate by 14.84%.
Revenues surged 43% year over year to $1.41 billion and surpassed the consensus mark by 4.12%. Growth was driven by robust demand across Semiconductor and Electronics & Packaging, supported by AI-related investments. Adjusted EBITDA margin expanded to 30.7%, reflecting improved operating leverage and stronger profitability.
MKSI’s Q3 Revenue Mix Strengthens
Product revenues, which accounted for 89.5% of total revenues, increased 47% year over year to $1.26 billion. The performance reflected strong demand across the company's semiconductor, electronics and packaging, and specialty industrial end markets.
Services revenues totaled $149 million, representing 10.5% of revenues. The figure increased 16.4% from the year-ago quarter, contributing to the company's broad-based top-line growth.
MKS Inc. Price, Consensus and EPS Surprise
MKS Inc. price-consensus-eps-surprise-chart | MKS Inc. Quote
MKS' End Markets Deliver Robust Growth
Semiconductor revenues surged 53.7% year over year to $638 million and represented 45.2% of total revenues. Management highlighted accelerating AI-driven demand across semiconductor manufacturing and advanced packaging applications, supported by robust orders and new design wins.
Electronics & Packaging revenues increased 43.6% to $415 million, contributing 29.4% of revenues. Specialty Industrial revenues rose 26.8% to $360 million and accounted for 25.5% of the quarterly total. Management noted that revenues across all three end markets were at or above the high end of guidance, underscoring broad demand strength.
MKSI's Operating Details
For the third quarter of 2026, gross margin expanded 110 basis points year over year to 47.7%.
Non-GAAP operating expenses were $281 million compared with $256 million a year earlier. The increase in expenses accompanied substantial revenue growth, allowing the company to generate stronger operating leverage.
Adjusted EBITDA climbed 80.8% year over year to a record $434 million. Adjusted EBITDA margin rose 640 basis points to 30.7%, reflecting higher revenues and improved profitability.
Non-GAAP operating income increased 91.7% to $393 million, while the non-GAAP operating margin improved 700 basis points to 27.8%. GAAP income from operations increased to $326 million from $138 million in the prior-year quarter. The operating margin expanded 910 basis points to 23.1%, benefiting from the higher revenue base and gross margin improvement.
MKSI's Cash Flow and Balance Sheet Improve
As of Sept. 30, 2026, MKS had cash and cash equivalents of $676 million compared with $611 million as of June 30, 2026.
As of Sept. 30, 2026, long-term debt totaled $2.38 billion.
Net cash provided by operating activities was $292 million in the third quarter, up 48.2% year over year.
MKS' Q4 Outlook Points to Continued Momentum
For the fourth quarter of 2026, MKS expects revenues of $1.49 billion, plus or minus $40 million. Gross margin is projected to be 47.5%, plus or minus 1 percentage point, while non-GAAP operating expenses are expected to be $288 million, plus or minus $5 million.
The company forecasts non-GAAP earnings of $5 per share, plus or minus 38 cents. Non-GAAP net earnings are projected to be $352 million, plus or minus $27 million.
Adjusted EBITDA is expected to reach $461 million, plus or minus $29 million.
MKSI’s Zacks Rank & Other Stocks to Consider
MKSI currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector include Cisco Systems (CSCO - Free Report) , Analog Devices (ADI - Free Report) and NVIDIA (NVDA - Free Report) . Each stock presently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cisco Systems shares have gained 34.5% year to date. Cisco Systems is set to report first-quarter fiscal 2027 results on Nov. 12.
Shares of Analog Devices have risen 49.7% year to date. Analog Devices is set to report fourth-quarter fiscal 2026 results on Nov. 24.
NVIDIA shares have gained 7.3% year to date. NVIDIA is set to report third-quarter fiscal 2027 results on Nov. 17.