MKS Inc.

MKS serves semiconductor manufacturing, electronics and packaging, and specialty industrial customers. Its three reporting divisions are Vacuum Solutions, Photonics Solutions and Materials Solutions. They provide equipment, instruments, process controls, optical technology and specialty chemicals. MKS trades on Nasdaq under MKSI.

Latest financial results

Free cash flow is operating cash flow less purchases of property, plant and equipment. Adjusted earnings remove intangible amortization, restructuring, specified debt costs and associated tax effects. Adjusted earnings per share also use a smaller share count to reflect hedges intended to reduce dilution from convertible debt.

Demand and outlook

Third-quarter sales to the semiconductor end market were $638 million, compared with $415 million a year earlier. Electronics and packaging sales were $415 million, up from $289 million, and specialty industrial sales were $360 million, up from $284 million. These are end markets, distinct from the reporting divisions.

Reported operating margin improved to 23.1% from 14.0%. For Q4 2026, MKS forecasts revenue of $1.45 billion to $1.53 billion, adjusted earnings of $4.62 to $5.38 a share and adjusted EBITDA of $432 million to $490 million. EBITDA is earnings before interest, taxes, depreciation and amortization; MKS's adjusted measure also adds back specified items such as stock compensation and restructuring.

Cash and debt

At September 30, cash and cash equivalents were $676 million. Balance-sheet debt totaled about $3.78 billion, with $1.40 billion classified as short-term and $2.38 billion as long-term. The company also had an undrawn $1 billion revolver, subject to leverage requirements.

The short-term balance includes $1.381 billion of convertible notes after issuance costs and $19 million of term-loan maturities. The convertible notes' principal is $1.4 billion, due June 1, 2030. Their current classification reflects holders' right to convert in Q4 after a share-price trigger. Upon conversion, principal must be settled in cash; any excess may be paid in cash or shares at MKS's choice.

Operating cash flow for the first nine months was $588 million, compared with $503 million a year earlier. After $128 million of capital spending, free cash flow was $460 million. On November 4, MKS made a further $100 million voluntary U.S. term-loan principal repayment.

Buybacks, dividends and the pending sale

The board approved a $500 million repurchase program replacing a prior authorization with about $28 million remaining. Program repurchases were zero in the first nine months of 2026. The declared quarterly dividend is $0.25 a share, payable December 7 to shareholders of record November 25.

MKS agreed in October to sell Ophir Optics to TTM Technologies for $650 million in cash, subject to closing adjustments and approvals. Completion is expected in Q2 2027. The sale remains pending, and the Q4 guidance does not include its impact.