All sides on hold, we'd like to thank you for your patience. Please continue to stand by. You're all set on hold. We'd like to thank you for your patience. Please continue to stand by. To all sites on hold, we'd like to thank you for your patience. To all set on hold, we'd like to thank you for your patience. Please continue to stand by. If you should need operator assistance during today's conference, To all sides on hold, we'd like to thank you for your patience. Please continue to stand by. If you should be operator assistance during today's conference, please press 0. Welcome to the Entegris Fourth Quarter 2025 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode. If you would like to ask a question, you may remove yourself from the queue by pressing star two. So others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star 0. I would now like to turn the call over to Jeff Schnell, VP of Investor Relations. Good morning, everyone.

Earlier today, we announced the financial results for 2025. Before we begin, I would like to remind listeners that our comments today will include some forward-looking statements. These statements involve a number of risks and uncertainties and actual results could differ materially from those projected in the forward-looking statements. Additional information regarding these risks and uncertainties is contained in our most recent annual report and subsequent quarterly reports that we have filed with the SEC. Please refer to the information on the disclaimer slide in the presentation. On this call, we will also refer to non-GAAP financial measures, as defined by the SEC in Regulation G. You can find reconciliation tables in today's news release as well as in the IR page of our website at entegris.com. On the call today are David Reeder, our CEO, and Linda LaGorga, our CFO. With that, I'll hand the call over to David. Thank you, and good morning. Before we dive into results, I want to take a moment to welcome Jeff to our team.

We're excited to have him on board leading our IR efforts as our new head of investor relations. Our solid fourth quarter results demonstrate disciplined execution and a consistent focus on delivering on our commitments. Fourth quarter revenue, gross margin, adjusted EBITDA margin, and non-GAAP EPS were all at the high end or above our guidance range. For the full year, total revenue was approximately flat compared to 2024 excluding divestitures. Our unit-driven revenue grew approximately 2% in 2025, in line with wafer starts for the market and was led by CMP consumables, liquid filtration, and selective etch. Our CapEx-driven revenue declined 7% in 2025, consistent with the decline in industry fab construction CapEx. We are most highly correlated. The fab CapEx slowdown was most evident in our FOUP and Fluid Handling product lines within our APS division. Looking ahead to 2026, the industry backdrop appears more constructive. I'll touch on the semi market in more detail in a bit, but there are a few areas where we expect notable improvement compared to 2025, that should benefit Entegris. First, we expect to benefit in 2026 from the node transitions in both logic and memory. In logic, increased demand for two-nanometer devices is expected to meaningfully drive wafer output throughout 2026. In memory, NAND transitions are progressing. Migrating from low 250 layers to approximately 300 layers. Additionally, next-generation DRAM and HPM products are expected to be rolled out this year, and all these transitions create accretive content per wafer opportunities for Entegris. Next, we expect industry MSI growth to increase in 2026 led by continued strong growth in advanced logic and DRAM. Improving demand for NAND, stable demand for mainstream logic. Finally, we expect industry fab construction spending to grow in 2026, reversing a significant decline in 2025. This is meaningful…

Good morning. Q4 sales were $824 million at the high end of guidance. Down 3% year over year and up 2% sequentially. Gross margin on a GAAP basis 43.844% on a non-GAAP basis in the fourth quarter, also at the high end of guidance. The sequential increase in gross margin was primarily driven by increased production volumes across our manufacturing facilities. Back to the Q4 P and L. Operating expenses on a GAAP basis were $256 million in Q4. Operating expenses on a non-GAAP basis in Q4 were $188 million. Adjusted EBITDA in Q4 was 27.7% of revenue, above our guidance. The GAAP tax rate in Q4 was 10% and the non-GAAP tax rate was 15.4%. GAAP diluted EPS was $0.32 per share in the fourth quarter. Non-GAAP EPS was $0.70 per share above our guidance. Sales for Materials Solutions in Q4 were $362 million. Sales were flat year over year and up 4% sequentially. Sequential growth was driven primarily by advanced deposition materials supported by demand for moly deposition within NAND. Adjusted operating margin for MS was 20.9% for the quarter. The year-on-year decline in margin was driven by slightly lower production volumes and strategic investments. The strong sequential increase in margin was driven by increased production volumes and product mix. Sales for Advanced Purity Solutions in Q4 were $465 million down 5% year on year and up 1% sequentially. The year-over-year sales decline was driven by Fluid Handling and Soups, partially offset by strong growth in liquid filtration, which had another record quarter. Sequential growth in liquid filtration and gas purification was partially offset by lower food sales. The adjusted operating margin for APS was 24.8% for the quarter. The year-on-year decline in margin was driven by cost related to the ramp of our Taiwan and Colorado manufacturing…

The floor is now open for your questions. If at any point your question is answered, you may remove yourself from the queue by pressing star two. Again, we ask that you pick up your handset when posing your questions to provide optimal sound quality. Our first question is coming from Mike Harrison with Seaport Research Partners. Your line is open.

Hi. Good morning. Best wishes to Linda, and welcome Jeff to the team. Morning, Mike. One of Morning, Mike. David, I appreciate you walking through your detailed thoughts there on underlying market growth in 2026. It sounds like if we roll that altogether, you're looking at something in the mid-single-digit range, for growth overall. But I'm curious. Historically, Entegris would talk about growing three to six percentage points faster than the underlying market. As you look at the opportunities that you're seeing, you mentioned the advanced nodes in two nanometer as well as growing content per wafer in NAND. I'm just curious, are you expecting an environment in 2026 where you can get back to growing in that three to 6% range faster than underlying markets.

Hi, Mike. Good to speak to you again. When we think about 2026, we do think the industry backdrop is a little bit more constructive than it was in 2025. And specifically, if you think about the areas in which we grow revenue, We do about 40% of our revenue is from advanced logic, about 30% from mainstream logic, and then the remainder from memory. And so when you look at 2026, it feels like advanced logic is pretty fully utilized as we add capacity there. We get the benefit of both additional growth plus more content. Mainstream looks kind of mixed, so we think we're performing on a cylinder for advanced logic. We think mainstream looks mixed but stable. And then we think memory can perform. So think of it kind of performing on three of our four cylinders. The additional piece to then layer on top of it is CapEx. And CapEx was not terribly constructive in 2025. But we do think that CapEx could be more constructive in '26 particularly the portion related to fab CapEx. So when you look at that industry back and you think about outperformance, I'll just add a couple of more points to that. One, we typically get the most outperformance when we have node transitions. Because that drives additional content per wafer. So that's typically our biggest driver of outperformance. And so while both logic and NAND node transitions look solid, we don't really control the timing and pace of that. And so and then, of course, as I mentioned, the CapEx piece is particularly fab CapEx is relatively volatile. So when we look at 26, we look at our first quarter guide, plus 4% at midpoint slightly greater than 6% at the high end of our guidance range. And, of course, we gave you a little bit of color for Q2. We feel like the setup is constructive to the extent the node transitions, both logic and memory happen. We feel like we can get back to outperformance. And then the CapEx piece looks to be a little bit more second half weighted. So I gave you a lot of details there. For contents, Mike. But did you have a follow-up?

Yes. That's very helpful. I follow-up is this kind of on the margin trajectory for the year. Your guidance for Q1 calls for a little bit of sequential contraction in EBITDA margin. I assume that's just seasonality. But anything you can share in terms of how we should think about margin in '26? Presumably, you're getting back to more normal production rates yourselves. And seeing some benefits from ramping the Taiwan facility. So I appreciate some details there.

Yeah. So, thanks, Mike. Thanks for that question. You know, let me bring it up to gross margin. I know you mentioned EBITDA, but think it's important to go back to when we think about our gross margin. First, it's really stabilized in the current range. We had mentioned we called a trough at the second half of last year. And you could see based on the Q1 guidance that stabilization. The key as we drive margins, and this will drive through to the bottom into EBITDA, is the volume leverage. And so as we said, there's a constructive environment going into this year. As we see more production going through our facilities, that's going to go into our gross margin and see that improvement. That includes ramping Taiwan this year and continuing to ramp. And then as David mentioned in his remarks, we did rationalize one facility, and we plan to rationalize another one in this first half of the year. So again, all those dynamics, volume leverage, combined with Taiwan ramping, combined with some rationalization is going to help us improve gross margin with that increased production. And drive down to EBITDA.

Thank you, mate. Alright. Thanks very much.

We'll move next to Timothy Arcuri with UBS. Your line is open.

Thanks a lot. David, for the full year, you said CapEx is going to be at modest. We know WFE is going to be up low to mid-20s. You know, probably more than that. What about MSI for the year? Don't think I heard you give a target for MSI for the year.

Yeah. Good morning, Tim. MSI, we think, is middish single digits. Still early days, and, obviously, we've got Chinese New Year that's happening next week in Q1 versus the January. But when you look at MSI so there's some Q1 dynamics in there. But when you look at MSI overall for the year, our current estimates are kind of middish single digits. Agree with your commentary on WFE. That looks like gonna be strong this year. That's about a third of our CapEx related revenue. And then two-thirds of our CapEx related revenue is tied to fab construction CapEx. And when you think about that portion, it looks like there's probably not a lot of that in the first half. With it picking up perhaps even significantly in the second half and then, of course, setting up well for 2027. Did you have a follow-up, Tim?

I do, David. Yeah. So if I just add that altogether and I run the ratios, you're probably I mean, your market's probably up somewhere close 10%, probably high single digits at least. So do you think you can outgrow that by a significant margin? I mean, is it a good is that a good level to say that, you know, you should grow revenue at least you know, high singles, probably even low, you know, doubles to get to your to get to your outperformance, you know, metrics for the year.

Hi, Tim. I think I've given you a lot of the elements here. I think we'll probably stand pat for guiding one quarter at a time. We gave you a little visibility with respect to second quarter normal seasonality would imply kind of sequential growth of 1% to 3% from first quarter based on order pattern we feel pretty good about that range right now. And so we'll continue to give you more visibility as we see it. I think the wild card that we kind of see right now is how does that fab CapEx kind of layer in throughout the course of the year. And then how do we kinda participate in that portion of the revenue? That's the piece that, that we're really watching right now. And it's it's moved pretty significantly month to month. So that's that's the hesitancy or perhaps the conservatism that you're hearing in my voice. I wanna see how that plays out a little bit.

Okay, David. Thanks.

We'll take our next question from Christopher Parkinson with Wolfe Research. Your line is open.

Great. Thank you. Open. You mentioned last quarter more of a concerted selling effort directed to mainstream and I was wondering if you could give us a quick update on what's underway there.

Thanks, Chris. You know, we look at our customers in quite deep in quite a lot of detail. Particularly kind of our top 50 ish customers. And so when we look at that customer list and we look at mainstream, And so you've got we then kinda break them down into their corresponding portions of you've got kind of mainstream logic, You've got some mainstream in there that's associated with some special manufacturing, for example, silicon carbide as well as some other nodes. And so when we look at that universe, I'll start with kind of the latter. Silicon carbide was a headwind for us. In 2025. I'm talking on a year over year basis from '24 to '25. We think that is now stable and perhaps even improving slightly. Albeit slowly in '26. So we think the silicon carbide headwind where we have a very nice solution for the CMP process. We feel like that will not be a headwind for us, at least expectation wise, in 2026. So we think that will be constructive and helpful. And we continue to gain even more share in that process. When we look at the other mainstream, and I'm referring to mainstream logic, mainstream logic has a number of needs across our entire product portfolio. And so our efforts in mainstream logic become more about providing all of those solutions not just individual product lines to each of those mainstream customers. So when we look across those customers, we're trying to more deeply penetrate their wallet across our complete product portfolio. Whereas in some of those mainstream logic customers, we're only selling individual product lines. Did you have a follow-up, Chris?

Yes. And sorry. I should've said this is Harris Fine on for Chris. For the second question, I mean, for for a while now, there's been a lot of headlines on China competition. I guess it'd be helpful to hear if you're seeing anything in terms of changing behaviors or any sort of step up in competitive intensity. And if so, where where are you seeing it?

Good question. When we look at the China market, we think the fundamentals of the China market are very similar to the rest of the world. In other words, they care about yield and performance. And so when you think through products in our space, that improve yield and performance, you think of the Entegris products. That do both. It's one, continuing to deliver purity both at point of use and at source, and then, of course, having high purity materials that enter the process pure. And so those two products, which is really product portfolios that Entegris is built upon, that improves yield and performance. And that's competitive irrespective of kind of where you are around the world. Now then when kind of hone in specifically in China, because they compete fiercely in China, our biggest obstacle in China is being able to guarantee to those customers that that we can assure supply. So can we guarantee supply to those customers? And when we can guarantee supply to those customers, we find that they revert back to yield and performance being important. And so what you saw us do in 2025 was you saw us put a really concentrated effort into qualifying more manufacturers manufacturing overseas, specifically for the China market as well as the rest of Asia. We got up to about 85% of products, at least in first quarter, about 85% of our revenue for China, we're expecting to supply from region. And so we're able to guarantee that supply. We're gonna continue to work on that throughout 2026. Probably getting to a number you know, around or even greater than 90%. And so I think as we continue to be able to qualify more products for Asia manufacturing, we then get to guarantee supply to those customers. Then we get to compete in that market like we do around the world. And when we can compete fairly in those markets, we tend to do pretty well.

We'll move next to Charles Shi with Needham. Your line is open.

Hi. Thanks for taking my question. Hi, David. A good result. I wanna ask you about NAND. I think we've spoken about this for a while. NAND sentiment wise, pricing wise, business wise, for your customers have inflected. But it it doesn't appear that it's inflecting for you yet. Wondering what's your best prediction as of today. When do you think that business is gonna pick up? And by the way, I did notice in your prepared remarks, double-digit content gain for this year, even on the back of pretty flattish or maybe single-digit MSI should do well for your NAND. But I just don't really feel like I see that in your March quarter guide or June guide. Is it that, like, more a second half driver? And why it's still delayed versus your customers? Thank you.

Good morning, Charles, and thank you for the question. With respect to NAND, we think the underlying demand like you remains very strong. In fact, you started to see pricing kind of firm for NAND in the 2025, you saw the pricing continue to perform well throughout the latter half then of '25 and then continue to grow through '26. We actually think that increased wafer starts on NAND has actually been very let's call it, measured. And so we think incremental wafer starts for NAND will remain measured because what we're actually starting to see is we're starting to see some node transitions on NAND where you get a premium where the NAND producers get a premium pricing for bit density. And so we're finally starting to see some of those node migrations that we expected on NAND going from kind of, you know, call it 250 ish layer count to roughly 300 ish layer count. So as you kinda grow that layer count, kinda 20% bit density, growth on a year over year basis. It's a premium product for them. We get benefit from those incremental layers. But it effectively consumes capacity. And so I think what you're hearing from us is we like the incremental layers. Incremental layers brings higher content per wafer for Entegris, but the actual weight increase wafer starts we're waiting for the NAND producers to effectively drive those wafer starts. So this is the trade-off in environment right now that, you know, when we look at Q1, we think we've got a solid guide for Q1. We've got an indication kind of for second quarter that we feel quite comfortable with. And then we'll leave it for the producers to determine the rate and pace both of the layer count as well as incremental wave wafer growth. Did you have a follow-up, Charles?

Alright. Thanks, David. Yes. I do. The second question, thanks for the China color. And the amount of supply supporting the China market. But I wonder if you have a view how your China business is going to grow. In '26. And if you can, what was the China growth number for 2025? Thank you.

Sure. So in terms of the China business growth in '26, I'll let Linda in a moment talk about the '25 growth. But the areas that we expect to grow in '26 for China, One, we think some of the CapEx related areas will grow in 2026, specifically FM and perhaps FUPS. We expect LMC or liquid filtration to perform in 2026 in the China market as well as some of the CMP products. There's probably a couple others in there, but we expect the China market to have growth in '26, and we think it's kind of underpinned by the areas that I mentioned. Linda, do you have the China growth number for 2025?

Yeah. So China has remained twenty-four and twenty-five, 21% of actual dollars are down slightly, but you know, as we've talked about before, and they've highlighted some of the reasons why our China customers like our product, We've been able to maintain, you know, very solid performance in China.

Thanks, David and Linda. Appreciate the color.

We'll take our next question from Melissa Weathers with Deutsche Bank. Your line is open.

Hi, there. Thank you for letting me ask a question. I wanted to touch on something you flagged in the prepared remarks the potential impact of memory shortages and pricing on the electronics market and any decreased production we could see from that. I know you're calling for middish single-digit growth, which middish, that's a new word for me that I've learned today. Could you help us what are you embedding in that Outlook with respect to, like, any demand destruction from the memory shortages?

Yeah. I think when we think about our first quarter guide, obviously, we didn't factor anything into the first quarter. We didn't really factor anything into kind of our, at least, indication for second quarter at this stage. I think, really, what we were doing was we were just flagging it as a potential. You know, we're expecting mainstream to be stable this year, perhaps even slightly improving versus 2025. But a lot of the mainstream logic a lot of that production is reliant on some form of memory. And so we're really just, at this stage, calling it out as a flag to watch for the second half of 2026. I think that's where the impact would be if there was any. Did you have a Melissa?

Yes. I did. On the capacity shutdowns that you've done in the fourth quarter and that you might do in the first half of this year. I'm sorry if I missed it, but have you given any timing on when we could expect those closures to impact gross margins?

Yeah. Let me broaden the question out. Gross margin, and then I'll answer your question specifically. And, you know, in the third quarter, which was my first as CEO, we guided kind of a trough for gross margin between 43-44%. Third quarter gross margin was 43.6. We were able to increase that to 44% in fourth quarter. In first quarter on slightly lower volume, we're still guiding you on a normalized basis to kind of 44%. And so we feel like at this point, incremental volume growth for us will drive incremental gross margin from these levels. So from that perspective, we feel quite good about it. We were able to rationalize one facility in the fourth quarter of this year excuse me, of 2025. As we go forward into 2026, we'll get some modest benefit from that in terms of utilization. When we think about what I mentioned in the script, which was we're expecting to rationalize another facility in 2026. Then you would expect to get some minor benefit on a go-forward basis through the remainder of '26, and we'll continue to go. We'll continue to both ramp our facilities in Taiwan. We'll qualify our facility in RockRemen and we'll continue to look at our manufacturing footprint and the rate and pace at which utilization is improving and make the decisions that you would expect us to make. So, for all those reasons, we feel quite good about the trajectory that we're on. And we feel like the execution is in front of us to perform. Thank you.

Thanks, Melissa.

We'll move next to Elizabeth Sun with Citi. Your line is open.

Hi, good morning. Thanks for taking my questions. The first one, I guess, it's David, you briefly talked about AI is 5% of the wafer starts market, but I believe your content is much higher for AI-related products. So I'm just wondering if you have looked from the perspective of like, how much is AI as a percentage of total revenue?

Good morning, Elizabeth. What we tried to give you some at least, some indication and some color in the prepared commentary. We mentioned that about 60% of our revenue in 2025 was driven by advanced nodes, so advanced manufacturing. That's both logic and memory. And then as you think about going forward, AI is a big part of that growth in advanced manufacturing. And for example, advanced logic we designate that as seven nanometers and below. And then the last kinda two generations of memory, the newest one plus current manufacturing, that's how we define it, advanced manufacturing nodes. So from that perspective, it's about 60% of our total revenue as a company. We expect that to grow going forward because we expect both incremental to come online mostly to satisfy AI, And then, of course, we expect memory to continue to grow as AI drives more growth through memory. Did you have a follow-up, Elizabeth?

Yes. I do. Thanks for that. And advanced packaging, I understood it has been a smaller part of your total revenue, but I think I heard in your prepared remarks that you are expecting some POR wins or some and you are doing some efforts on HPM side. So I was wondering what's your expectation for advanced packaging revenue this year?

Yeah. Advanced packaging is an area that grew nicely for us in 2025. Representing, you know, roughly a $100 million plus minus. We expect that to continue to grow nicely in 2026. And this is an area where we've made a little bit more concerted effort to grow across a number of product lines. So those product lines sampling now. And we have some others that will sample later in the year. For the advanced packaging market. So we're not expecting as much benefit in '26 as perhaps we you know, could get in '27 and beyond. But it is a growing part of the market. It is starting to look more and more like some of the more advanced nodes in terms of its complexity and the challenges that our customers face. And it's an area that ultimately will play well with some of our product portfolio. So, you're gonna see a little bit more of a focused effort from us in this space. And we're cautiously optimistic.

Great. Thanks, David.

We'll take our next question from Edward Yang with Oppenheimer. Your line is open.

Hi, David. Good morning, and thanks for the time. Just wanted to touch again your leverage to memory market trends. Obviously, a lot of excitement there. You just first remind us your ballpark rep total revenue exposure to memory overall and where it could go in a cycle. And maybe also clarify the trade-off between what you were talking about layer count benefit versus wafer counts, like with CMP, I would think that you'd be relatively indifferent, but perhaps in other parts of the business. You know, you get more or less revenue.

Sure. So memory is about 30% of our total revenue. It's roughly split equally, and I'm standing back and squinting. It's on an approximate basis. So say about half of it is NAND, about half of it is DRAM. As you know, DRAM has performed very well in 2025, very high utilization rates, across DRAM. More of DRAM moving from kind of individual sales of DDR5 into HBM. And so as that migration happens, there's a, you know, some incremental content associated with that. But it's not the same as what you would get, for example, from an incremental wave. And so there is incremental content when you go from standalone DDR5 to HBM. But there would be more total benefit if you would start and generate more total wafer starts. But the technology capacity for DRAM is pretty fully utilized exiting twenty-five. And we see it remaining that way through 2026. The other half roughly of this 30% of revenue is NAND. NAND is probably around 85% utilization. That's a bit from where it was in peak in the twenty-two twenty twenty-two type time frame. What you're seeing in NAND is you're seeing that 15% available capacity starting to see it get absorbed by incremental wafer count or excuse me, by incremental layer count. And so, as those incremental layers happen, we're relatively indifferent on whether you're absorbing that capacity on an incremental layer basis or on a wafer basis. I think on a general statement, we would say we would be indifferent. I think the reality is we would probably get slightly more incremental benefit from a wafer, from a full wafer start. But we do get benefit from both. Did you have a follow-up, Edward?

Yeah. Yes. I do. So David, you mentioned, you know, focusing on, winning new PORs, and I was just wondering has your go-to-market approach changed there? Are you cross-selling more, you know, intra division between and and also interdivision, between material solution and advanced purity solutions.

Yeah. I think you've seen us really a lot of the good sales focus that was in place before I joined where we've kinda continued that momentum. Since I've joined the company. I think what perhaps we've been able to focus a bit more on now is we have been able to focus a bit more on selling the complete portfolio of products. We've always engaged very well on a technology roadmap basis, so that's something we don't want to change. We want those best efforts where we're focused on our customers' node transitions and technology roadmap, many of which are kinda several years out. But then as we do that, we also want to layer that in that road map and we that engagement on road map. We want to layer in our other product lines where we bring best in class filtration, best in class purification, best in class wafer handling and fluid management and bring that together with some of these longer technology road maps such as the CMP process, the deposition process, the etch process. So, you've seen us try to make a concerted effort with not only continuing the good engagement, on the technology road map, many many many times at which it's looking at several years, but then also bring more of the other product lines along in that engagement and discussion. For today.

Thank you.

Thanks, Edward.

We'll move next to Bhavesh Lodaya with BMO. Your line is open.

Hi. Good morning, David, and congrats on a nice quarter. And certainly, all the best to Linda, and welcome, Jeff, as well. You shared a lot of color, for the short term. So maybe a longer-term question. If I look at where MSI overall MSI stands today, we are still under prior peaks. Around 13% lower, it seems. And we don't see a week go by without news of higher and higher CapEx spend in AI. Data centers, If end market growth kind of hangs in there, I'm curious on your view as to how that plays for MSI over the next few years, next three to four years. As these capacities have brought online.

Thanks, Bhavesh. Well, you're right. It is somewhat of a bifurcated market where we're talking about maybe we need to start new fabs but yet you're looking at MSI and you're looking at some underutilization in some areas of the market. Where you're not fully utilized as of yet. So let me maybe the best way to answer this question is to kinda break it down into its constituent parts. If you think about advanced logic which we define as seven nanometers and below, advanced logic is pretty fully utilized, particularly advanced logic below five nanometers. And so you're seeing a lot of incremental capacity and focus on incremental capacity for the most advanced nodes. And that's growing total capacity for this seven nanometer and below advanced logic category. But it's slow and it takes time to grow two-nanometer base and it takes time to then also transition to new nodes, for example, like 1.4 nanometer. But that space is pretty fully utilized or that category seven nanometers and below is pretty fully utilized. So what you need is you need more capacity to grow MSI. DRAM is also very highly utilized. So if you wanna grow a lot of MSI and DRAM, you need incremental capacity. And I think you're starting to see some of the producers of DRAM think through where and how do you add that incremental capacity and over what time frame. And so I think you're seeing the market kinda recognize that DRAM is very tight. Not a lot of incremental available capacity and how do you best drive incremental capacity? Is it through you know, incremental tools and perhaps Is it through, you know, groundbreaking? I think you'll see the market kind of make some moves on this front through 2026. NAND, there is…

Yes. In your equation here, so one side of growth comes from utilization. The other side comes from, I would say, content gains or a mix benefit. As more layers come in, Where do you put outperformance metrics in this? Do you count the content gains and outperformance, or would outperformance be over and above these two things?

Yeah. We think of outperformance really from a revenue perspective. And so to the extent you grow layer count, it actually increases content per wafer. And so from that perspective, that incremental content per wafer would show up in revenue, and we would count that as outperformance to the market because it would be incremental kind of to what the normal market would see. So, that's how we would think about that.

Got it. Appreciate the thoughts. Thanks.

Thanks, Bhavesh.

We'll take our next question from John Roberts with Mizuho. Your line is open.

Thank you. And, Linda, best wishes, and welcome again. Jeff is also here. Could you talk about the weaker parts of the business? So it looks like, again, FUPS were probably gas filtration was probably down. Is that all related just to the new fab construction activity being down and do they continue down in the first quarter?

Yes. So when you look at 2025, fab construction CapEx, was down high single digits, call it seven ish percent. Our CapEx related business was down about the same amount. And it was really driven by two product lines both within APS one being fluid management and the other one being FOUPS. Those were the two that were down the most and very much in line with that fab construction CapEx. So when we think about 2026, and you think about, you know, perhaps fab construction CapEx being at least flat and perhaps at this point up slightly, though to be determined how much through the course of '26. You're seeing a corresponding recovery both in both those two businesses. So our expectations for the year is that Fluid Management and Fuchs will have a better year versus 2025 on the basis of fab construction CapEx at a minimum being flat and most likely being up. But to be determined how that kind of did you have a follow-up, John?

Well, I'll follow-up with how about the March?

So sorry. You cut out on me. What the question was was what again?

Will they be down will they be down in the March or more flattish in the March?

I think at this point I'll speak a little bit on a sequential basis. We'll see ultimately how much kind of revenue for those specific product lines fall in first quarter versus second quarter. But I think it's fair to say that we're already starting to see some recovery in those product lines from an order pattern perspective for 2026. And then ultimately, the timing of whether it's first quarter or second quarter that will be determined by delivery and our customers. But I do think that we've seen order patterns improve for those product lines as we're very early here in 2026.

Thank you.

Thanks, John.

This does conclude the Q and A portion of today's call. I would now like to hand it back to Jeff Schnell for any additional or closing remarks.

Great. Thank you for joining the call today and your continued interest in Entegris. Please reach out if you have any follow-ups.

Thank you. This concludes today's Entegris fourth quarter 2025 earnings conference call. Please disconnect your line at this time, and have a wonderful day.