MKS Inc.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 4 November 2026: press release. Guidance figures: 12 new. The quarter’s numbers.

Key takeaways

Revenue reached $1,413 million: Revenue was $1,413 million, against $1,248 million in Q2 2026 and $988 million a year earlier. Nine-month revenue was $3,739 million, against $2,898 million. Source
Non-GAAP earnings per share $4.18: Non-GAAP net earnings were $292 million, or $4.18 per diluted share, against $232 million or $3.30 in Q2 2026 and $130 million or $1.93 a year earlier. Source
Adjusted EBITDA reached $434 million: Adjusted EBITDA was $434 million, a 30.7% margin, against $358 million at 28.6% in Q2 2026 and $240 million at 24.3% a year earlier. Source
Semiconductor revenue up 54%: Semiconductor revenue was $638 million, up 54% from $415 million a year earlier and from $554 million in Q2 2026. Source
GAAP operating margin rose to 23.1%: GAAP operating margin was 23.1%, against 20.1% in Q2 2026 and 14.0% a year earlier. Non-GAAP operating margin was 27.8%, against 25.6% and 20.8%. Source
Demand across chips and advanced packaging: Management said stacking, scaling and new-materials challenges are becoming more integral in the AI era, across chips, substrates and advanced PCBs. Source
Free cash flow of $243 million: Free cash flow was $243 million, against $188 million in Q2 2026 and $147 million a year earlier. Operating cash flow was $292 million; capital expenditure was $49 million. Source

“Revenue in each of our end markets was at or above the high end of our guidance, led by 54% year-over-year growth in Semiconductor and 43% growth in Electronics & Packaging”
John T.C. Lee, President and Chief Executive Officer

Guidance

Area	Period	Figure	Against last quarter
Revenue Source	fourth quarter of 2026	$1,490 million, plus or minus $40 million	New
Gross margin Source	fourth quarter of 2026	47.5%, plus or minus 1.0%	New
GAAP operating expenses Source	fourth quarter of 2026	$355 million, plus or minus $5 million	New
Non-GAAP operating expenses Source	fourth quarter of 2026	$288 million, plus or minus $5 million	New
GAAP net income Source	fourth quarter of 2026	$294 million, plus or minus $28 million	New
Non-GAAP net earnings Source	fourth quarter of 2026	$352 million, plus or minus $27 million	New
GAAP net income per diluted share Source	fourth quarter of 2026	$4.04, plus or minus $0.38	New
Non-GAAP net earnings per diluted share Source	fourth quarter of 2026	$5.00, plus or minus $0.38	New
Adjusted EBITDA Source	fourth quarter of 2026	$461 million, plus or minus $29 million	New
Weighted average diluted shares Source	fourth quarter of 2026	72.9 million GAAP; 70.5 million non-GAAP	New
Interest expense, net Source	fourth quarter of 2026	35 (in millions)	New
Provision for income taxes Source	fourth quarter of 2026	16 (in millions)	New

What changed from last quarter

New guidance: Fourth-quarter 2026 guidance was given in this release. The prior release gave guidance for the third quarter only. Source
New: The fourth-quarter guidance does not include the pending sale of the Ophir Optics business. Source
New: The company made a $100 million voluntary principal prepayment on its USD term loan B in November 2026. The prior release reported a $100 million prepayment in August 2026. Source
New: The convertible senior notes became convertible at noteholders' option during the fourth quarter of 2026. The prior release gave the third quarter of 2026 as the window. Source

Results and growth drivers

Revenue reached $1,413 million: Revenue was $1,413 million, against $1,248 million in Q2 2026 and $988 million a year earlier. Nine-month revenue was $3,739 million, against $2,898 million. Source
GAAP earnings per diluted share $3.26: GAAP net income was $236 million, or $3.26 per diluted share, against $175 million or $2.41 in Q2 2026 and $74 million or $1.10 a year earlier. Source
Non-GAAP earnings per share $4.18: Non-GAAP net earnings were $292 million, or $4.18 per diluted share, against $232 million or $3.30 in Q2 2026 and $130 million or $1.93 a year earlier. Source
Adjusted EBITDA reached $434 million: Adjusted EBITDA was $434 million, a 30.7% margin, against $358 million at 28.6% in Q2 2026 and $240 million at 24.3% a year earlier. Source

Segments and end markets

Semiconductor revenue up 54%: Semiconductor revenue was $638 million, up 54% from $415 million a year earlier and from $554 million in Q2 2026. Source
Electronics and Packaging up 43%: Electronics and Packaging revenue was $415 million, up 43% from $289 million a year earlier and from $381 million in Q2 2026. Source
Specialty Industrial revenue rose: Specialty Industrial revenue was $360 million, against $313 million in Q2 2026 and $284 million a year earlier. Nine-month revenue was $963 million. Source

“that is driving robust orders and new design wins that set us up for continued strong performance”
John T.C. Lee, President and Chief Executive Officer

Margins and costs

Gross margin at 47.7%: Gross margin was 47.7%, against 47.6% in Q2 2026 and 46.6% a year earlier. Nine-month gross margin was 47.5%, against 46.9% a year earlier. Source
GAAP operating margin rose to 23.1%: GAAP operating margin was 23.1%, against 20.1% in Q2 2026 and 14.0% a year earlier. Non-GAAP operating margin was 27.8%, against 25.6% and 20.8%. Source
Non-GAAP operating expenses rose: Non-GAAP operating expenses were $281 million, against $275 million in Q2 2026 and $256 million a year earlier. GAAP operating expenses were $348 million. Source

Demand and orders

Demand across chips and advanced packaging: Management said stacking, scaling and new-materials challenges are becoming more integral in the AI era, across chips, substrates and advanced PCBs. Source
Broadest capabilities across two markets: Management said the company has the broadest set of capabilities across semiconductor and advanced packaging markets, aimed at foundational innovation. Source

“Our business model is delivering scale benefits that, combined with accelerating revenue, are driving gross and operating margin expansion, strong earnings growth and cash generation”
Ram Mayampurath, Executive Vice President and Chief Financial Officer

Cash, debt and balance sheet

Free cash flow of $243 million: Free cash flow was $243 million, against $188 million in Q2 2026 and $147 million a year earlier. Operating cash flow was $292 million; capital expenditure was $49 million. Source
Cash rose to $676 million: Cash and cash equivalents were $676 million at September 30, 2026, against $611 million at June 30, 2026. Source
Term loan down, convertibles current: Secured term loan principal was $1.3 billion, down from $1.5 billion at June 30. Convertible notes of $1.4 billion are classified as short-term debt. Source
Receivables and inventory rose: Trade receivables were $902 million at September 30, 2026, up from $651 million at December 31, 2025. Inventories were $1,162 million, up from $921 million. Source

Capital and shareholder returns

Dividend held at $0.25: Cash dividends were $0.25 per common share in Q3 2026, the same as Q2 2026 and up from $0.22 a year earlier. Dividend payments were $17 million. Source
No share repurchases in the quarter: The company did not repurchase common stock in Q3 2026 or in the first nine months of 2026. The first nine months of 2025 included $45 million of repurchases. Source
Diluted share count eased: Diluted weighted average shares were 72.5 million in Q3 2026, against 72.7 million in Q2 2026. Non-GAAP diluted shares, after capped calls, were 69.9 million. Source

Coming up, as management said on 4 November 2026

Monitoring the business environment: Management said it will continue to monitor and adapt to changes in the business environment as needed. Source

Risks management discussed

External: Fourth-quarter guidance assumes the current business environment, including U.S. import tariffs and retaliatory actions by other countries, as of the release date. Source

Earlier plans management reported on

Ahead: Management said Q3 performance exceeded the high end of the guidance ranges for revenue and EPS. Source
Ahead: Adjusted EBITDA of $434 million was above the high end of the Q3 guidance of $395 million, plus or minus $28 million, given in the prior release. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

MKS Inc. Reports Third Quarter 2026 Financial Results

Record revenue of $1,413 million, above the high end of guidance

Record GAAP net income of $236 million and record net income per diluted share of $3.26, each above the high end of guidance

Record Adjusted EBITDA of $434 million and record Non-GAAP net earnings per diluted share of $4.18, each above the high end of guidance

Andover, MA, November 4, 2026 -- MKS Inc. (NASDAQ: MKSI), a global provider of enabling technologies that transform our world, today reported its financial results for the third quarter of 2026.

“Our business momentum continued to build in the third quarter. Revenue in each of our end markets was at or above the high end of our guidance, led by 54% year-over-year growth in Semiconductor and 43% growth in Electronics & Packaging,” said John T.C. Lee, President and Chief Executive Officer. “From chips to substrates and advanced PCBs, the fundamental challenges of stacking, scaling, and new materials are becoming more integral in the AI era. MKS brings the broadest set of capabilities across both the semiconductor and advanced packaging markets to deliver foundational innovation, and that is driving robust orders and new design wins that set us up for continued strong performance.”

“Q3 performance exceeded the high end of our guidance ranges for revenue and EPS, and we’re poised for a strong finish to 2026,” said Ram Mayampurath, Executive Vice President and Chief Financial Officer. “Our business model is delivering scale benefits that, combined with accelerating revenue, are driving gross and operating margin expansion, strong earnings growth and cash generation. With our exposure to attractive growth markets, mix of equipment solutions and consumables, and a healthy balance sheet, MKS is well positioned to generate significant, durable shareholder returns.”

Selected GAAP and Non-GAAP Financial Measures

(In millions, except per share data)

	Three Months Ended			Nine Months Ended
	Q3 2026	Q2 2026	Q3 2025	Q3 2026	Q3 2025
Net Revenues
Semiconductor	$638	$554	$415	$1,658	$1,261
Electronics & Packaging	415	381	289	1,118	809
Specialty Industrial	360	313	284	963	828
Total net revenues	$1,413	$1,248	$988	$3,739	$2,898
Gross Margin	47.7%	47.6%	46.6%	47.5%	46.9%
GAAP Financial Measures
Operating margin	23.1%	20.1%	14.0%	19.4%	13.3%
Net income	$236	$175	$74	$495	$188
Net income per diluted share	$3.26	$2.41	$1.10	$6.86	$2.78
Non-GAAP Financial Measures
Operating margin	27.8%	25.6%	20.8%	25.3%	20.6%
Net earnings	$292	$232	$130	$681	$365
Net earnings per diluted share	$4.18	$3.30	$1.93	$9.80	$5.41

Additional Financial Information

At September 30, 2026, the Company had $676 million in cash and cash equivalents, $1.3 billion of secured term loan principal outstanding, $1.4 billion of convertible senior notes outstanding, €1.0 billion of senior notes outstanding and up to $1.0 billion of additional borrowing capacity under a revolving credit facility, subject to certain leverage ratio requirements. During the third quarter of 2026, the trading price of our common stock continued to satisfy the stock price conversion condition under the indenture governing our convertible senior notes. As a result, the convertible senior notes are convertible, in whole or in part, at the option of the noteholders at any time during the fourth quarter of 2026, and were classified as short-term debt, net of issuances costs, at September 30, 2026.

In November 2026, the Company made a voluntary principal prepayment of $100 million on its USD term loan B.

Fourth Quarter 2026 Guidance

Revenue of $1,490 million, plus or minus $40 million

Gross margin of 47.5%, plus or minus 1.0%

GAAP operating expenses of $355 million, plus or minus $5 million and Non-GAAP operating expenses of $288 million, plus or minus $5 million

GAAP net income of $294 million, plus or minus $28 million and Non-GAAP net earnings of $352 million, plus or minus $27 million

GAAP net income per diluted share of $4.04, plus or minus $0.38 and Non-GAAP net earnings per diluted share of $5.00, plus or minus $0.38

Adjusted EBITDA of $461 million, plus or minus $29 million

The guidance for the fourth quarter does not include the impact of the Company’s pending sale of its Ophir® Optics business and is based on the current business environment, including the impact of U.S. import tariffs and the imposition of retaliatory actions taken by other countries up through but not including the date of this release. The Company will continue to monitor and adapt to changes in the business environment as needed.

Conference Call Details

A conference call with management will be held on Thursday, November 5, 2026 at 8:30 a.m. (Eastern Time). To participate in the call by phone, participants should visit the Investor Relations section of MKS’ website at investor.mks.com and click on Events & Presentations, where you will be able to register online and receive dial-in details. We encourage participants to register and dial in to the conference call at least 15 minutes before the start of the call to ensure a timely connection. A live and archived webcast and related presentation materials will be available on the Investor Relations section of the MKS website.

About MKS Inc.

MKS Inc. (NASDAQ: MKSI) enables technologies that transform our world. We deliver foundational technology solutions to leading edge semiconductor manufacturing, electronics and packaging, and specialty industrial applications. We apply our broad science and engineering capabilities to create instruments, subsystems, systems, process control solutions and specialty chemicals technology that improve process performance, optimize productivity and enable unique innovations for many of the world's leading technology and industrial companies. Our solutions are critical to addressing the challenges of miniaturization and complexity in advanced device manufacturing by enabling increased power, speed, feature enhancement, and optimized connectivity. Our solutions are also critical to addressing ever-increasing performance requirements across a wide array of specialty industrial applications. Additional information can be found at www.mks.com.

Use of Non-GAAP Financial Results

This press release includes financial measures that are not in accordance with U.S. generally accepted accounting principles (“Non-GAAP financial measures”). These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, MKS’ reported results under U.S. generally accepted accounting principles (“GAAP”), and may be different from Non-GAAP financial measures used by other companies. In addition, these Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. MKS management believes the presentation of these Non-GAAP financial measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. For further information regarding these Non-GAAP financial measures, please refer to the tables presenting reconciliations of our Non-GAAP results to our GAAP results and the “Notes on Our Non-GAAP Financial Information” at the end of this press release.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

Forward-looking statements notice

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding the future financial performance, business prospects and growth of MKS Inc. (“MKS,” the “Company,” “our,” or “we”). These statements are only predictions based on current assumptions and expectations. Any statements that are not statements of historical fact (including statements containing the words “will,” “projects,” “intends,” “believes,” “plans,” “anticipates,” “expects,” “estimates,” “forecasts,” “continues” and similar expressions) should be considered forward-looking statements. Actual events or results may differ materially from those in the forward-looking statements set forth herein. Among the important factors that could cause actual events to differ materially from those in the forward-looking statements that we make are the level and terms of our substantial indebtedness and our ability to service such debt; risks related to pursuing, completing, and/or failing to realize the benefits of acquisitions and other strategic transactions, including the pending sale of our Ophir Optics business; risks related to cybersecurity, data privacy and intellectual property; manufacturing and sourcing risks, including supply chain disruptions, component shortages and price increases, the use of limited, sole source and international suppliers, the relocation of manufacturing operations, and product defects; risks associated with doing business internationally, including geopolitical conflicts, trade compliance, trade protection measures, such as import tariffs by the United States and/or retaliatory actions taken by other countries, regulatory restrictions on our products, components or markets, particularly the semiconductor market, and unfavorable currency exchange and tax rate fluctuations; conditions affecting the markets in which we operate, including intense competition, rapid technological and market changes, dependence on new product development, the ability to anticipate and meet customer demand, fluctuations in capital spending in the semiconductor, electronics manufacturing and automotive industries, and fluctuations in sales to our major customers; disruptions or delays from third-party service providers upon which our operations may rely; risks associated with the attraction and retention of key personnel; potential fluctuations in quarterly results; volatility of stock price; risks associated with chemical manufacturing and environmental regulation compliance; risks associated with artificial intelligence (“AI”); financial and legal risk management; and the other important factors described under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission and any subsequent Quarterly Reports on Form 10-Q. MKS is under no obligation to, and expressly disclaims any obligation to, update or alter these forward-looking statements, whether as a result of new information, future events or otherwise, even if subsequent events cause our views to change, after the date of this press release. Amounts reported in this press release are preliminary and subject to finalization prior to the filing of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2026.

Company Contact:

Paretosh Misra

Vice President, Investor Relations

Telephone: (978) 284-4705

Email: paretosh.misra@mks.com

Unaudited Consolidated Statements of Operations

(In millions, except per share data)

	Three Months Ended			Nine Months Ended
	September 30,	June 30,	September 30,	September 30,	September 30,
	2026	2026	2025	2026	2025
Net revenues:
Products	$1,264	$1,104	$860	$3,322	$2,528
Services	149	144	128	417	370
Total net revenues	1,413	1,248	988	3,739	2,898
Cost of revenues:
Products	668	582	466	1,764	1,367
Services	71	71	61	199	173
Total cost of revenues (exclusive of amortization shown separately below)	739	653	527	1,963	1,540
Gross profit	674	595	461	1,776	1,358
Research and development	80	76	76	237	222
Selling, general and administrative	201	200	180	591	539
Restructuring and other	5	6	4	14	26
Legal settlement	-	-	-	3	-
Fees and expenses related to debt activities	-	-	-	18	2
Amortization of intangible assets	62	62	63	187	184
Income from operations	326	251	138	726	385
Interest income	(2)	(2)	(3)	(6)	(11)
Interest expense	38	38	53	121	162
Loss on extinguishment of debt	5	4	2	14	8
Other (income) expense, net	(2)	(2)	2	(4)	11
Income before income taxes	287	213	84	601	215
Provision for income taxes	51	38	10	106	27
Net income	$236	$175	$74	$495	$188
Net income per common share:
Basic	$3.49	$2.59	$1.10	$7.32	$2.79
Diluted	$3.26	$2.41	$1.10	$6.86	$2.78
Cash dividends per common share	$0.25	$0.25	$0.22	$0.75	$0.66
Weighted average common shares outstanding:
Basic	67.7	67.6	67.3	67.6	67.3
Diluted	72.5	72.7	67.6	72.1	67.6

Unaudited Consolidated Balance Sheets

(In millions)

	September 30,	December 31,
	2026	2025
ASSETS
Cash and cash equivalents	$676	$675
Trade accounts receivable, net	902	651
Inventories	1,162	921
Other current assets	318	263
Total current assets	3,058	2,510
Property, plant and equipment, net	820	810
Right-of-use assets	259	270
Goodwill	2,600	2,574
Intangible assets, net	1,973	2,140
Other assets	522	492
Total assets	$9,232	$8,796
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term debt	$1,400	$51
Accounts payable	591	407
Other current liabilities	588	469
Total current liabilities	2,579	927
Long-term debt, net	2,377	4,150
Non-current deferred taxes	430	474
Non-current accrued compensation	146	149
Non-current lease liabilities	238	246
Other non-current liabilities	176	131
Total liabilities	5,946	6,077
Stockholders' equity:
Common stock	-	-
Additional paid-in capital	2,108	2,101
Retained earnings	1,155	711
Accumulated other comprehensive income (loss)	23	(93)
Total stockholders' equity	3,286	2,719
Total liabilities and stockholders' equity	$9,232	$8,796

Unaudited Consolidated Statements of Cash Flows

(In millions)

	Three Months Ended			Nine Months Ended
	September 30,	June 30,	September 30,	September 30,	September 30,
	2026	2026	2025	2026	2025
Cash flows from operating activities:
Net income	$236	$175	$74	$495	$188
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	88	85	85	259	258
Unrealized (gain) loss on foreign currency and derivative instruments	(2)	(2)	(8)	(4)	(4)
Amortization of debt issuance costs and original issue discounts	3	3	7	11	20
Loss on extinguishment of debt	5	4	2	14	8
Stock-based compensation	15	15	12	49	46
Provision for excess and obsolete inventory	4	5	10	21	37
Deferred income taxes	(20)	(20)	(44)	(64)	(125)
Other	3	(4)	1	(1)	-
Changes in operating assets and liabilities	(40)	(18)	58	(192)	75
Net cash provided by operating activities	292	243	197	588	503
Cash flows from investing activities:
Purchases of investments	-	-	(1)	(1)	(1)
Proceeds from sale of long-lived assets	-	-	-	-	3
Purchases of property, plant and equipment	(49)	(55)	(50)	(128)	(98)
Net cash used in investing activities	(49)	(55)	(51)	(129)	(96)
Cash flows from financing activities:
Repurchase of common stock	-	-	-	-	(45)
Proceeds from borrowings	-	-	-	1,192	-
Payments of borrowings	(163)	(104)	(113)	(1,541)	(338)
Payments of deferred financing fees	-	-	-	(22)	-
Dividend payments	(17)	(17)	(15)	(51)	(44)
Net payments related to employee stock awards	(1)	(26)	-	(43)	(6)
Other financing activities	-	(1)	(1)	(1)	(4)
Net cash used in financing activities	(181)	(148)	(129)	(466)	(437)
Effect of exchange rate changes on cash and cash equivalents	3	2	6	8	13
Increase (decrease) in cash and cash equivalents	65	42	23	1	(17)
Cash and cash equivalents at beginning of period	611	569	674	675	714
Cash and cash equivalents at end of period	$676	$611	$697	$676	$697

The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’ operating results:

Schedule Reconciling Selected Non-GAAP Financial Measures

(In millions, except per share data)

	Three Months Ended			Nine Months Ended
	September 30,	June 30,	September 30,	September 30,	September 30,
	2026	2026	2025	2026	2025
Net income	$236	$175	$74	$495	$188
Restructuring and other	5	6	4	14	26
Legal settlement	-	-	-	3	-
Amortization of intangible assets	62	62	63	187	184
Loss on extinguishment of debt	5	4	2	14	8
Amortization of debt issuance costs	3	3	5	9	14
Loss from de-designation of interest rate hedges	-	-	-	2	-
Fees and expenses related to debt activities	-	-	-	18	2
Tax effect of Non-GAAP adjustments	(19)	(18)	(18)	(61)	(57)
Non-GAAP net earnings	$292	$232	$130	$681	$365
Non-GAAP net earnings per diluted share	$4.18	$3.30	$1.93	$9.80	$5.41
Weighted average diluted shares outstanding	72.5	72.7	67.6	72.1	67.6
Convertible debt capped calls	(2.6)	(2.4)	-	(2.7)	-
Non-GAAP weighted average diluted shares outstanding	69.9	70.3	67.6	69.4	67.6
Net cash provided by operating activities	$292	$243	$197	$588	$503
Purchases of property, plant and equipment	(49)	(55)	(50)	(128)	(98)
Free cash flow	$243	$188	$147	$460	$405
Operating expenses	$348	$344	$323	$1,050	$973
Restructuring and other	5	6	4	14	26
Legal settlement	-	-	-	3	-
Amortization of intangible assets	62	62	63	187	184
Fees and expenses related to debt activities	-	-	-	18	2
Non-GAAP operating expenses	$281	$275	$256	$828	$761
Income from operations	$326	$251	$138	$726	$385
Operating margin	23.1%	20.1%	14.0%	19.4%	13.3%
Restructuring and other	5	6	4	14	26
Legal settlement	-	-	-	3	-
Amortization of intangible assets	62	62	63	187	184
Fees and expenses related to debt activities	-	-	-	18	2
Non-GAAP income from operations	$393	$320	$205	$948	$597
Non-GAAP operating margin	27.8%	25.6%	20.8%	25.3%	20.6%
Interest expense, net	$36	$36	$50	$115	$151
Amortization of debt issuance costs	3	3	5	9	14
Loss from de-designation of interest rate hedges	-	-	-	2	-
Non-GAAP interest expense, net	$33	$33	$45	$104	$137
Net income	$236	$175	$74	$495	$188
Interest expense, net	36	36	50	115	151
Other (income) expense, net	(2)	(2)	2	(4)	11
Provision for income taxes	51	38	10	106	27
Depreciation	26	23	23	72	74
Amortization of intangible assets	62	62	63	187	184
Stock-based compensation	15	15	12	49	46
Restructuring and other	5	6	4	14	26
Legal settlement	-	-	-	3	-
Loss on extinguishment of debt	5	4	2	14	8
Fees and expenses related to debt activities	-	-	-	18	2
Adjusted EBITDA	$434	$358	$240	$1,069	$717
Adjusted EBITDA margin	30.7%	28.6%	24.3%	28.6%	24.7%

Schedule Reconciling Selected Non-GAAP Financial Measures

(In millions, except per share data)

	Three Months Ended September 30, 2026			Three Months Ended June 30, 2026
	Income Before Income Taxes	Provision for Income Taxes	Effective Tax Rate	Income Before Income Taxes	Provision for Income Taxes	Effective Tax Rate
GAAP	$287	$51	17.6%	$213	$38	17.8%
Restructuring and other	5	-		6	-
Legal settlement	-	-		-	-
Amortization of intangible assets	62	-		62	-
Loss on extinguishment of debt	5	-		4	-
Amortization of debt issuance costs	3	-		3	-
Tax effect of Non-GAAP adjustments	-	19		-	18
Non-GAAP	$362	$70	19.1%	$288	$56	19.6%

	Three Months Ended September 30, 2025
	Income Before Income Taxes	Provision for Income Taxes	Effective Tax Rate
GAAP	$84	$10	12.3%
Restructuring and other	4	-
Amortization of intangible assets	63	-
Loss on extinguishment of debt	2	-
Amortization of debt issuance costs	5	-
Tax effect of Non-GAAP adjustments	-	18
Non-GAAP	$158	$28	17.9%

	Nine Months Ended September 30, 2026			Nine Months Ended September 30, 2025
	Income Before Income Taxes	Provision for Income Taxes	Effective Tax Rate	Income Before Income Taxes	Provision for Income Taxes	Effective Tax Rate
GAAP	$601	$106	17.7%	$215	$27	12.7%
Restructuring and other	14	-		26	-
Legal settlement	3	-		-	-
Amortization of intangible assets	187	-		184	-
Loss on extinguishment of debt	14	-		8	-
Amortization of debt issuance costs	9	-		14	-
Loss from de-designation of interest rate hedges	2	-		-	-
Fees and expenses related to debt activities	18	-		2	-
Tax effect of Non-GAAP adjustments	-	61		-	57
Non-GAAP	$848	$167	19.7%	$449	$84	18.7%

Schedule Reconciling Selected Non-GAAP Financial Measures - Q4’26 Guidance

(In millions, except per share data)

	Three Months Ending December 31, 2026
	$ Amount	Per Share
GAAP net income and net income per share	$294	$4.04
Restructuring and other	6
Amortization of intangible assets	61
Loss on extinguishment of debt	8
Amortization of debt issuance costs	3
Tax effect of Non-GAAP adjustments	(20)
Non-GAAP net earnings and net earnings per share	$352	$5.00
Weighted average diluted shares	72.9
Convertible debt capped calls	(2.4)
Non-GAAP weighted average diluted shares	70.5
GAAP operating expenses	$355
Restructuring and other	(6)
Amortization of intangible assets	(61)
Non-GAAP operating expenses	$288
GAAP net income	294
Interest expense, net	35
Provision for income taxes	16
Depreciation	26
Restructuring and other	6
Amortization of intangible assets	61
Stock-based compensation	15
Loss on extinguishment of debt	8
Adjusted EBITDA	$461

Notes on Our Non-GAAP Financial Information

Non-GAAP financial measures adjust GAAP financial measures for the items listed below. These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, MKS’ reported GAAP results, and may be different from Non-GAAP financial measures used by other companies. In addition, these Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. MKS management believes the presentation of these Non-GAAP financial measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. Totals presented may not sum and percentages may not recalculate using figures presented due to rounding.

Restructuring and other includes incremental expenses incurred in connection with restructuring programs and other strategic initiatives, primarily related to changes in business and/or cost structure. Such costs may include third-party services, one-time termination benefits, facility-related costs, contract termination fees and other items that have no direct correlation to our future business operations.

Legal settlement includes charges related to the resolution of legal matters.

Amortization of intangible assets includes non-cash amortization expense associated with intangible assets acquired in acquisitions.

Loss on extinguishment of debt includes the non-cash write-off of unamortized debt issuance costs and original issue discount costs incurred from voluntary prepayments, refinancings and/or repricings of our term loan facility.

Amortization of debt issuance costs includes non-cash additional interest expense related to the amortization of debt issuance costs associated with our debt.

Loss from de-designation of interest rate hedges includes a cash loss from the de-designation of certain interest rate hedges in connection with the voluntary prepayment of the USD term loan B.

Fees and expenses related to debt activities includes direct third-party costs related to repricings or refinancings of our term loan facility and the issuance of our €1.0 billion of senior notes due 2034 in February 2026.

Convertible debt capped calls includes the antidilutive impact of the capped call transactions entered into in connection with the issuance of $1.4 billion of convertible senior notes in May 2024. The capped calls are designed to reduce potential dilution to the Company’s common stock and/or offset cash payments in excess of the principal upon conversion of the notes, subject to a cap. Because the capped calls are excluded from GAAP diluted share calculations, GAAP and Non‑GAAP diluted share counts will differ.

Tax effect of Non-GAAP adjustments includes the impact of Non-GAAP adjustments that are tax effected at applicable statutory rates resulting in a difference between the GAAP and Non-GAAP tax rates.