MKS Inc.’s MKSI first-quarter 2026 non-GAAP earnings of $2.30 per share increased 34.5% year over year. The figure surpassed the Zacks Consensus Estimate by 15.21%.
Revenues came in at $1.08 billion, rising 15.2% from the year-ago quarter and beating the Zacks Consensus Estimate by 2.95%. Strength was supported by broad-based demand tied to AI-related investment.
Product revenues (88.5% of total revenues) totaled $954 million, up 16.5% year over year. Services revenues (11.5% of total revenues) increased 6% year over year to $124 million.
Shares of the company rallied 8.38% while writing this blog.
MKS Inc. Price, Consensus and EPS Surprise
MKS Inc. price-consensus-eps-surprise-chart | MKS Inc. Quote
MKSI Q1 Top-Line Details
Semiconductor end-market revenues totaled $466 million (43.2% of total revenues), increasing 13% year over year, with management citing broad-based growth across products aimed at DRAM, NAND and foundry/logic applications. The company also pointed to sequential improvement in power solutions as NAND equipment upgrades increased.
Electronics & Packaging revenues rose 27% year over year to $321 million, and contributed 29.8% of total revenue in the reported quarter. The company attributed the performance to strength in flexible PCB drilling systems supported by consumer electronics seasonality, along with solid results in chemistry and chemistry equipment.
Specialty Industrial revenues increased 8% from the prior-year period to $291 million and contributed 27% of total revenues, even as results reflected a sequential dip tied largely to Lunar New Year seasonality. The company cited year-over-year strength, driven by datacom and defense markets.
MKSI’s Q1 Operating Details
In the first quarter of 2026, gross margin contracted 40 basis points (bps) on a year-over-year basis to 47%.
Adjusted EBITDA increased 17.4% year over year to $277 million. Adjusted EBITDA margin expanded 50 bps year over year to 25.7%.
Non-GAAP operating expenses were $271 million, and the company flagged higher R&D investment and a seasonal lift in stock-based compensation as key contributors to spending levels.
On a non-GAAP basis, operating margin expanded 160 bps to 21.8% from 20.2% a year ago, reflecting revenue growth and operating leverage.
MKSI’s Balance Sheet
As of March 31, 2026, MKS Instruments had cash and cash equivalents of $569 million compared with $675 million as of Dec. 31, 2025.
As of March 31, 2026, long-term debt totaled $2.65 billion.
Cash flow from operations was $53 million in the first quarter of 2026 compared with $142 million in the previous quarter.
The free cash flow was $29 million compared with $91 million in the first quarter of 2025.
MKSI’s Q2 Guidance
MKSI expects second-quarter 2026 revenues of $1.20 billion (+/- $40 million).
MKS anticipates a gross margin of 47% (+/- 1%). The company expects an adjusted EBITDA of $328 million (+/- 26 million).
On a non-GAAP basis, MKSI expects earnings of $2.90 (+/- 30 cents) per share.
MKSI 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 Analog Devices ADI, Applied Materials AMAT and Audioeye AEYE. Each stock currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have gained 53.3% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Applied Materials shares have gained 66.8% in the year-to-date period. Applied Materials is scheduled to report its second-quarter 2026 results on May 14.
Audioeye shares have lost 23.3% in the year-to-date period. Audioeye is set to report its first-quarter 2026 results on May 13.
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