Revenue: As of FY2026 Q1, the actual value is USD 1.078 B, beating the estimate of USD 1.046 B.EPS: As of FY2026 Q1, the actual value is USD 1.18, beating the estimate of USD 1.1588.EBIT: As of FY2026 Q1, the actual value is USD 192 M.<h3>Segment Revenue</h3><ul><li>#### Vacuum Solutions Division (VSD)<ul><li>Net revenues were $425 million for the three months ended March 31, 2026, an increase of $25 million from the prior quarter and $39 million from the same period in the prior year. This increase was mainly due to increased sales in semiconductor capital equipment serving deposition and etch applications, as well as NAND memory production upgrades.</li></ul></li><li>#### Photonics Solutions Division (PSD)<ul><li>Net revenues were $303 million for the three months ended March 31, 2026, an increase of $29 million from the prior quarter and $40 million from the same period in the prior year. This increase was primarily due to higher sales of flexible PCB via drilling systems in the electronics and packaging market, higher sales in datacom applications within the specialty industrial market, and higher sales of lithography, metrology, and inspection products in the semiconductor market.</li></ul></li><li>#### Materials Solutions Division (MSD)<ul><li>Net revenues were $350 million for the three months ended March 31, 2026, a decrease of $9 million from the prior quarter, but an increase of $63 million from the same period in the prior year. The quarterly decrease was mainly due to lower electronic equipment sales and industrial applications, partially offset by increased chemistry sales in the electronics and packaging market. The year-over-year increase was mainly due to higher electronic chemistry sales in the electronics and packaging market and higher sales for industrial applications.</li></ul></li></ul><h3>Operational Metrics</h3><ul><li>#### Segment Gross Profit Percentage<ul><li>Vacuum Solutions Division (VSD): Gross profit percentage was 42.9% for the three months ended March 31, 2026, an increase of 0.7 percentage points compared to the prior quarter, but a decrease of 2.4 percentage points compared to the same period in the prior year. The quarterly increase was primarily due to higher revenue volumes and favorable factory utilization, partially offset by unfavorable product mix and higher excess and obsolete inventory charges. The year-over-year decrease was primarily due to unfavorable product mix and higher duty and tariff costs, partially offset by higher revenue volumes, favorable factory utilization, and lower excess and obsolete inventory charges.</li><li>Photonics Solutions Division (PSD): Gross profit percentage was 47.2% for the three months ended March 31, 2026, an increase of 3.2 percentage points compared to the prior quarter and the same period in the prior year. This increase was primarily due to higher revenue volumes and favorable factory utilization, and lower excess and obsolete inventory charges year-over-year, partially offset by higher duty and tariff costs year-over-year.</li><li>Materials Solutions Division (MSD): Gross profit percentage was 52.2% for the three months ended March 31, 2026, a decrease of 1.4 percentage points compared to the prior quarter and 2.3 percentage points compared to the same period in the prior year. This decrease was primarily due to higher palladium prices, partially offset by higher revenue volumes.</li></ul></li><li>#### Capital Expenditures by Segment<ul><li>VSD: $12 million for the three months ended March 31, 2026, compared to $8 million for the same period in 2025.</li><li>PSD: $4 million for the three months ended March 31, 2026, compared to $2 million for the same period in 2025.</li><li>MSD: $6 million for the three months ended March 31, 2026, compared to $8 million for the same period in 2025.</li><li>Total Capital Expenditures: $22 million for the three months ended March 31, 2026, compared to $18 million for the same period in 2025.</li></ul></li><li>#### Depreciation and Amortization by Segment<ul><li>VSD: $8 million for the three months ended March 31, 2026, compared to $11 million for the same period in 2025.</li><li>PSD: $12 million for the three months ended March 31, 2026, compared to $12 million for the same period in 2025.</li><li>MSD: $65 million for the three months ended March 31, 2026, compared to $62 million for the same period in 2025.</li><li>Total Depreciation and Amortization: $85 million for the three months ended March 31, 2026, compared to $85 million for the same period in 2025.</li></ul></li><li>#### Segment Assets (Accounts Receivable, Net and Inventories)<ul><li>As of March 31, 2026:<ul><li>VSD: Accounts receivable, net was $243 million; Inventories were $476 million; Total segment assets were $719 million.</li><li>PSD: Accounts receivable, net was $222 million; Inventories were $278 million; Total segment assets were $500 million.</li><li>MSD: Accounts receivable, net was $310 million; Inventories were $195 million; Total segment assets were $505 million.</li><li>Total Segment Assets: Accounts receivable, net was $775 million; Inventories were $949 million; Total segment assets were $1,724 million.</li></ul></li><li>As of December 31, 2025:<ul><li>VSD: Accounts receivable, net was $190 million; Inventories were $475 million; Total segment assets were $665 million.</li><li>PSD: Accounts receivable, net was $163 million; Inventories were $270 million; Total segment assets were $433 million.</li><li>MSD: Accounts receivable, net was $298 million; Inventories were $176 million; Total segment assets were $474 million.</li><li>Total Segment Assets: Accounts receivable, net was $651 million; Inventories were $921 million; Total segment assets were $1,572 million.</li></ul></li></ul></li></ul><h3>Cash Flow (Consolidated)</h3><ul><li>Net cash provided by operating activities: $53 million for the three months ended March 31, 2026, decreasing from $141 million for the same period in 2025. The decrease was primarily due to a net increase in working capital of $134 million, driven by increases in accounts receivable ($129 million) and inventory ($49 million), and a decrease in accrued compensation ($68 million).</li><li>Net cash used in investing activities: -$25 million for the three months ended March 31, 2026, compared to -$18 million for the same period in 2025, primarily due to capital expenditures for new facility additions in Malaysia and China.</li><li>Net cash used in financing activities: -$137 million for the three months ended March 31, 2026, compared to -$180 million for the same period in 2025. This included net proceeds from the 2034 Notes, offset by a $1.3 billion prepayment of the USD Tranche B loan, $22 million in deferred finance costs, and $17 million in dividend payments.</li></ul><h3>Future Outlook and Strategy</h3>MKS Inc. plans significant R&amp;D investment to address customer needs and industry trends, including demand from AI and shrinking integrated circuit dimensions, expecting current liquidity and operating cash flows to meet needs for at least the next 12 months and the foreseeable future. The semiconductor market is in a ramp phase due to AI transformation investments but remains subject to rapid demand shifts and trade restrictions.

MKS | 10-Q: FY2026 Q1 Revenue Beats Estimate at USD 1.078 B