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Call sheet · Q2'24

MKS Instruments (MKSI)

Q2'24 earnings call · held August 8, 2024 · compared with the Q1'24 call · management-credibility review
4/12
Disclosure score
2 high, 5 medium, 2 low flags
Financial quality
Bottom line
The sleeper story is that MKS is eating margin pain NOW from a photonics win that won't scale for 'several quarters' while management refuses to quantify the drag, just calling it 'slight.' The Street sees the EPS beat, but that's 40% interest savings from the convert, not operational improvement. The binding constraint is zero visibility: 'our lead times have been pulled in... that does limit our visibility' means they're flying blind quarter to quarter. Most revealing quote: 'we're probably bouncing along the bottom a little longer than we thought.' My view changes if they provide actual AI revenue exposure or NAND shows real recovery signals, not just 'early signs.'

The 30-second version

  • World-class optics win is eating margins NOW but management won't quantify the drag
  • Semi recovery narrative crumbling: 'bouncing along the bottom' getting LONGER not shorter
  • In-quarter demand conversion is the new crutch, visibility has collapsed

What changed this quarter

MetricQ1'24Q2'24Change
Total Revenue$868M (Q1)$887M (+2.2% seq)+2.2% sequential beat
EPS$1.18 (Q1)$1.53 (+30% seq)+30% sequential surge
Net Income$79M (Q1)$103M (+30% seq)+$24M sequential gain
Operating Income$175M (Q1)$192M (+10% seq)+10% sequential growth
Gross Margin47.8% (Q1)47.3% (-50bps seq)-50bps compression
Semi Revenue$351M (Q1)$369M (+5% seq)+5% sequential growth
E&P Revenue$208M (Q1)$229M (+10% seq)+10% sequential surge
Specialty Industrial$309M (Q1)$289M (-7% seq)-7% sequential decline
Operating Cash FlowNot disclosed Q1Not disclosed Q2Still hiding OCF
Free Cash Flow$49M (Q1)$96M (+96% seq)Near doubling seq

Accountability tracked

7 new promises made5 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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