MKS Inc. (MKSI) posts 2025 annual report with revenue and gross-profit gains — but net-income lines don’t add up

MKS Inc. (MKSI) said it released its annual report for the year ended Dec. 31, 2025, showing stronger top-line performance but a confusing mismatch between the aggregate net-income line and per-share figures.

MKSI stock chart

MKSI

The basics are straightforward: consolidated net revenues rose to $3,931 million in the year ended Dec. 31, 2025, up from $3,586 million a year earlier. Gross profit climbed to $1,837 million from $1,708 million, while cost of revenues increased to $2,094 million from $1,878 million. On the operations side, product sales made up roughly $3,436 million of revenue and services about $235 million, underscoring that MKS remains a product-first engineering business that also sells service and extended-warranty contracts — what the company does.

Revenue growth came from products; margins slipped a touch

Drill into the numbers and you see a clear story: product revenue drove the increase, accounting for about 87% of total sales. Services are small by comparison, roughly 6% of the total, which means MKS’s profit picture tracks closely with how well its equipment business performs.

Gross margin eased slightly. On a simple basis, gross profit of $1,837 million on $3,931 million of revenue implies a gross margin of about 46.7%, down from roughly 47.6% the prior year. That compression — roughly 90 basis points — mostly reflects higher cost of revenues in absolute dollars. For a company that sells capital equipment and laser-based and plating systems, margin volatility can come from product mix, parts and components cost, and the timing of large equipment shipments.

The company recognizes most revenue when it ships product, but customized systems and certain modification projects are recognized over time under a cost-to-cost method. That mix — shipped systems versus long-build contracts — matters because it changes when revenue and margin hit the books.

The net-income numbers that don’t line up

This is where readers should pause: the consolidated statement shows a reported net loss of $(1,841) million for the year, yet a basic net income per share is listed as $4.39. On the face of it, those two lines are inconsistent — you can’t simultaneously have a giant aggregate loss and a healthy positive per-share profit without a material reconciling item or an error.

There are several harmless explanations in general (large noncontrolling interests allocated to shareholders, a restatement, or a classification of a one-time gain/loss), but the company’s materials as presented don’t make the reconciliation obvious. I’m flagging the mismatch rather than guessing a cause: the numbers need a clear footnote or correction to reconcile the headline net-loss figure with the per-share profit. Until MKS explains, treat that EPS figure with caution.

Readers should also note other helpful line items that appear in the statements: operating income and interest items swing year to year, and the company recorded restructuring, acquisition/integration, and amortization impacts that affect the operating bottom line. Those items can push GAAP net income around even when sales hold steady.

On the balance-sheet side, the company reported total assets of about $8.8 billion for the period, and liabilities near $6.1 billion, which means leverage and cash-flow timing are also important to watch for a capital-equipment player that funds R&D and supports long customer cycles.

How the market is reading this today: the stock closed the most recent session near $252 per share, down about 0.6% on the day. The Relative Strength Index sits around 61, which suggests momentum is a bit heated but not in extreme overbought territory, and the share price is trading above both the 20-day and 50-day simple moving averages — signs the market hasn’t punished the story yet despite the accounting oddity. See recent trading for the snapshot.

Finally, remember MKS’s business is split across vacuum and photonics divisions and serves semiconductor and specialty-industrial end markets. That customer mix matters because semiconductors are cyclical; when capital spending in chip fabs rises, equipment suppliers like MKS can see outsized revenue swings. The company also runs service and warranty programs that produce recurring revenue but at lower margins.

Bottom line: the core commercial story is positive — revenue and gross profit grew year over year, and product sales remain the dominant engine. The practical problem is a headline accounting inconsistency that muddies how to read net profitability. If you hold MKSI or are considering a position, watch for a company clarification or an amended reconciliation in the next few days or in its upcoming investor communications; that explanation will determine whether this is just a presentation glitch or something more material that should change how you value the business.