Entegris is a U.S. semiconductor materials and contamination-control pure-play whose product portfolio is one layer upstream of every leading-edge fab, and the second quarter of fiscal 2026 was the cleanest read yet on a quietly accumulating demand cycle for advanced deposition, slurry, and filtration consumables. The company delivered 11.5% year-over-year revenue growth, 320 basis points of gross margin expansion, and net income of $93.6 million, but the line that actually defines the quarter is the $73 million reduction in expected full-year depreciation from a January 2026 useful-life reset.
Roughly $20 million of the 320 basis points of Q2 gross margin expansion came from the new useful-life estimate flowing through cost of sales, which means the underlying operating leverage story is closer to 120 basis points of margin expansion on 11.5% volume growth. The balance sheet tells the same story from the other direction: the company repaid $250 million of term loan B in the first half, ended June with $3.46 billion of net debt, and still generated $339 million of operating cash flow, a 34% year-over-year jump.
The question the next two quarters resolve is whether the demand mix continues to favor the higher-margin Advanced Purity Solutions segment, which grew segment profit 57% in Q2, and whether the company can convert the new useful-life depreciation tailwind into genuine free cash flow deleveraging rather than spending it on incremental capacity.