Capital Markets Day, New York, November 9, 2026

Entegris used its 2026 Capital Markets Day to set the first long-term financial framework of the Rereder era, and the numbers are more aggressive than the 2024 plan. Management targets roughly 15% annual organic revenue growth over a 3 to 5 year horizon, taking sales from just over $3.2 billion to about $6 billion. It also targets a gross margin of about 55%, an adjusted operating margin of about 35% and adjusted EPS growth of about 30% annually. The company paired the targets with a $500 million share repurchase authorization and a planned 10% increase in the quarterly dividend beginning in the first quarter of 2027. The model rests on a 10% serviceable market growth rate and 500 basis points of outperformance, and the credibility of that gap is the central question for investors.

The Margin Bridge Is Mostly Self-Help

The most consequential element is the gross margin path. CFO Sukhi Nagesh said 2026 gross margin should reach about 48.3%, up 370 basis points, with roughly half of that gain coming from self-help actions. The remaining 670 basis point bridge to 55% splits about one-third volume and two-thirds structural improvement. Volume leverage is plausible because, as Nagesh put it, the company has spent heavily on capacity over the past five years, and the current network can support "meaningfully more than $1 billion of incremental revenue." The structural component is harder to verify. It draws on end-market mix, pricing power on new products, and a funnel of hundreds of productivity projects across 35 sites worth more than $75 million over the next 12 to 24 months.

Management offered two examples: a 3x yield improvement on a key product line in a matter of months, and a 20 point gain in equipment utilization at a filter plating operation. Nagesh also noted that there was no pricing benefit in the third or fourth quarters, so pricing is not part of the 2026 margin gain. He said new products would add to margin next year. Operating expenses are expected to fall from about 22.5% of sales to about 20% even as R&D rises to roughly 10% of sales, which implies more than 40% incremental flow-through. Procurement consolidation is a notable lever. CEO David Reeder said that spending across about 40 sites gave Entegris "the purchasing power of about a $25 million purchasing company" despite roughly $1 billion of annual spend.

Cash Flow and Capital Return Inflect

Balance sheet repair is ahead of schedule. Net leverage stood at 3.8x at the end of 2025, with net debt of $3.4 billion. It is expected to reach about 2.7x by the end of 2026, with net debt near $2.9 billion, against a long-term target of about 2x. Reeder said year-to-date free cash flow is up about 85% and that the company has retired $450 million of term loan. He contrasted the current position with a year ago, when "the only thing we could talk about was how to continue to pay down debt."

Capital intensity is expected to settle at 7% to 9% of sales, after roughly $1.9 billion of CapEx since 2020, with 2026 at about $200 million, or 6% of sales. Management targets a cash conversion cycle improvement from about 150 days to 120 days. Over time it expects to return about 50% of excess cash to shareholders. M&A is positioned as targeted bolt-ons rather than large platforms. Materials president Olivier Blachier described three directions: reinforcing positions ranked third to fifth, expanding at device inflections, and adding data capabilities.

Advanced Packaging Is the Biggest Strategic Departure

Entegris has historically been viewed as a front-end, shrink-driven supplier, and the push into advanced packaging marks a deliberate extension of that. Reeder said annual advanced packaging CapEx was only about $1 billion to $2 billion five years ago and will be around $20 billion annually this year and next. Blachier noted that the last 20 advanced packaging fab announcements are all co-located next to front-end fabs, because purity requirements now resemble front-end manufacturing.

The company announced two moves in the past week. The first is the closing of the Advanced Abrasives acquisition, which adds diamond powder technology to Entegris's silicon carbide planarization IP, with localization in Taiwan for a major customer. The second is an exclusive partnership with Element Six, the synthetic diamond producer, under which Entegris will functionalize, chemical-mechanical planarize and bond diamond surfaces for HBM thermal solutions. Reeder also described a thermal interface material (TIM) offering for CoWoS packaging, built on the earlier Sinmat and Precision Microchemicals acquisitions plus the latest deal. Blachier framed the target as "not the mainstream commodity part of advanced packaging" but its differentiated top end.

Sizing is still loose. Blachier said hybrid bonding CMP "will definitely be multi-hundred million, if not more," while the overall TIM market is about $4 billion today, mostly traditional materials. No revenue targets were given for either, and Blachier hinted at further moves he could not discuss. Investors should treat this as an option with meaningful execution risk, not as a driver of the 2027 numbers.

Content Per Wafer and the Source of Outperformance

Management argues the outperformance versus market growth comes from complexity, not wafer volume. Reeder noted that total wafers remain below the 2022 peak even though the semiconductor industry will exceed $1.5 trillion this year. Blachier put content-per-wafer gains at 40% to 50% across the four major transitions, rising to 90% to 100% in the most complex cases. Nagesh cited more than 50% higher content moving from FinFET to gate-all-around, and nearly 90% going from 300 to 500 layer 3D NAND.

The Materials division bridge from 6% to 7% wafer growth to 13% to 15% revenue growth was described by Blachier as "1/3, 1/3, 1/3": layer count and content, plan of record wins and share gains, and new served markets such as cryogenic etch, novel implant and packaging. Engagement metrics support the story. Qualifications with top logic and equipment customers have risen 2.5x to 130 over three years, and plan of record wins have risen in a similar proportion. The vitality index has climbed to about 34.5% from 27% to 28%, and the target is 40%. In response to a question on why Materials outperformance is now 7 to 8 points versus 4 to 6 points in 2024, Reeder pointed to the greater pace of advanced memory and logic capacity investment, and Blachier said customers would hand over 500 to 600 opportunities if Entegris had the resources.

Molybdenum Is the Clearest Proof Point

Molybdenum, which Entegris began developing in 2017, was presented as the template for converting chemistry into a system solution. Entegris combines the chemistry with high-pressure, fill-stable canisters and specialty coatings, which it says are IP-protected, and scales them into high-volume solid-state delivery. It has landed two plan of record wins with leading equipment makers and two with memory manufacturers in the past 12 months. Reeder said molybdenum revenue is on track to double this year, and Blachier expects it to double again in 2027.

On adoption, Blachier said that over the next two years two of the four major NAND producers, and perhaps all four, would adopt molybdenum. DRAM remains undecided depending on architecture choice, and in advanced logic he expects use at least in lower metal liners, with fill still a customer decision. He added that Entegris would be nearly unique in pairing deposition with molybdenum etch for NAND and molybdenum CMP for logic.

Purity: A 10x to 65x Step-Up in Requirements

Advanced Purity Solutions president Clint Haris laid out the economics of contamination control. Moving to gate-all-around and CFET raises particle purity requirements about 10x, but ionic contamination requirements rise 65x and organic contamination requirements 25x. These are chemical rather than physical removal problems, which Reeder said creates "a big gap and divide between us and competition." Haris illustrated the AI link: with identical defect density on N3 wafers, a large GPU die yields about 60% versus 90% for a smartphone die.

The segment is now about 45% CapEx-driven and 55% unit-driven, a reversal of its historical mix, because AI fab construction has pulled forward subfab and gas purification demand. Haris expects the pendulum to swing back toward consumables as fabs ramp. Management gave APS a market of about $10 billion over the horizon and an upper-teens growth CAGR. APS delivered about 31% year-over-year scaling and 850 basis points of operating income improvement in the latest period. Haris also said that memory makers, who were historically a lesser focus, are engaging more because each chip now carries such high margin.

Cycle View, China and What Management Left Unsaid

Reeder declined to call the cycle but said the supply-demand mismatch in advanced memory, logic and packaging means CapEx growth continues through 2027, with visibility into 2028, before shifting into unit volume in the later years of the horizon. The model reflects that, with 20% CapEx CAGR and 10% SAM growth, with CapEx front-loaded and wafer volume accelerating late. He said order intake so far in the quarter is ahead of last quarter, and that demand has not changed despite the swings in market sentiment over the past three weeks.

China is expected to be about 18% of revenue this year, below 20% last year, because the rest of the world is growing faster on advanced memory and logic, not because of share loss. Reeder said China should still grow this year and over the horizon, but at a much slower rate, as it remains mostly a mainstream logic market. He said Entegris sells more than 1,000 products there, with positions of record in memory and in the most advanced local logic.

There are caveats. Management deliberately widened the horizon to 3 to 5 years, a point Barclays pressed on, and Reeder declined to commit the $6 billion to a specific year. Mainstream logic, which is 55% of total wafer starts, is modeled at only 3% growth. The 30% EPS CAGR relies on gross margin gains that are mostly within management's control but not yet proven at scale. Entegris is shifting to more than 75% of revenue from advanced memory and logic, which also raises its concentration in the most cyclical and capital-intensive parts of the industry. The R&D efficiency target is also ambitious: the company plans to cut the share of spend devoted to defending existing markets from about 50% to 35% and cut development cycles by about 3x, with an E-Chuck example of 12 months versus 3 years as the proof point, plus a 30% thermal conductivity improvement.