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10-K – 2026-02-24 – mksi-20251231.htm
Net income 295 295 Other comprehensive income 155 155 Balance at December 31, 2025 67.2 $ 0.1 $ 2,101 $ 711 $ ( 93 ) $ 2,719 The accompanying notes are an integral part of the Consolidated Financial Statements. 67 MKS INC. Consolidated Statem ents of Cash Flows (in millions) Years Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net income (loss) $ 295 $ 190 $ ( 1,841 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 344 348 397 Goodwill and intangible asset impairments — — 1,902 Unrealized (gain) loss on foreign currency and derivative instruments ( 9 ) 13 32 Amortization of debt issuance costs and original issue discount 26 30 33 Loss on extinguishment of debt 10 57 8 Gain on sale of long-lived assets — — ( 2 ) Stock-based compensation 55 48 54 Provision for excess and obsolete inventory 45 56 64 Deferred income taxes ( 196 ) ( 226 ) ( 234 ) Other — 8 5 Changes in operating assets and liabilities: Trade accounts receivable ( 16 ) ( 36 ) 114 Inventories ( 50 ) 20 ( 76 ) Other current and non-current assets 14 25 50 Accounts payable 55 21 ( 99 ) Current and non-current accrued compensation 83 ( 32 ) ( 5 ) Income taxes payable 21 49 ( 64 ) Other current and non-current liabilities ( 32 ) ( 43 ) ( 19 ) Net cash provided by operating activities 645 528 319 Cash flows from investing activities: Proceeds from sale of long-lived assets 3 1 3 Purchases of property, plant and equipment ( 148 ) ( 118 ) ( 87 ) Net cash used in investing activities ( 145 ) ( 117 ) ( 84 ) Cash flows from financing activities: Repurchase of common stock ( 45 ) — — Proceeds from borrowing — 2,161 216 Payments of borrowings ( 451 ) ( 2,427 ) ( 403 ) Purchase of capped calls related to Convertible Notes — ( 167 ) — Payments of deferred financing fees — ( 33 ) ( 9 ) Dividend payments ( 59 ) ( 59 ) ( 59 ) Net payments related to employee stock awards ( 4 ) ( 9 ) ( 1 ) Other financing activities ( 3 ) ( 15 ) ( 3 ) Net cash used in financing activities ( 562 ) ( 549 ) ( 259 ) Effect of exchange rate changes on cash and cash equivalents 23 ( 23 ) ( 10 ) Decrease in cash and cash equivalents ( 39 ) ( 161 ) ( 34 ) Cash and cash equivalents at beginning of period 714 875 909 Cash and cash equivalents at end of period $ 675 $ 714 $ 875 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 190 $ 268 $ 305 Supplemental noncash financing activities: Right of use assets obtained in exchange for new finance lease liabilities $ 46 $ 12 $ 1 The accompanying notes are an integral part of the Consolidated Financial Statements. 68 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) (1) B usiness Description MKS Inc., formerly known as MKS Instruments, Inc. (“MKS” or the “Company”), was founded in 1961 as a Massachusetts corporation and enables technologies that transform the world. The Company delivers foundational technology solutions to leading edge semiconductor manufacturing, electronics and packaging, and specialty industrial applications. The Company applies its broad science and engineering capabilities to create instruments, subsystems, systems, process control solutions and specialty chemicals technology that improve process performance, optimize productivity and enable unique innovations for many of the world’s leading technology and industrial companies. The Company’s solutions are critical to addressing the challenges of miniaturization and complexity in advanced device manufacturing by enabling increased power, speed, feature enhancement and optimized connectivity. These solutions are also critical to addressing ever-increasing performance requirements across a wide array of specialty industrial applications. (2) Basis of Presentation The terms “MKS” and the “Company” refer to MKS Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition, inventory valuation, warranty costs, pension plan valuations, stock-based compensation expense, intangible assets, goodwill, long-lived assets, income taxes and derivatives. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. As a result of rounding, there may be immaterial differences in amounts presented and certain calculations may not sum to the total number expressed in each category or tie to a corresponding schedule. The Company has three reportable segments: the Vacuum Solutions Division (“VSD”), the Photonics Solutions Division (“PSD”) and the Materials Solutions Division (“MSD”) as described in Note 20. (3) Summary of Significant Accounting Policies Revenue from Contracts with Customers The Company accounts for revenue using Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” (“ASC Topic 606”). The Company applies ASC Topic 606 using the following steps: • Identify the contract with a customer • Identify the performance obligations in the contract • Determine the transaction price • Allocate the transaction price to performance obligations in the contract • Recognize revenue when or as the Company satisfies a performance obligation Revenue is recognized when or as obligations under the terms of a contract with a customer have been satisfied and control has transferred to the customer. The majority of the Company’s performance obligations, and associated revenue, are transferred to customers at a point in time, generally upon shipment of a product to the customer or receipt of the product by the customer and without significant judgments. The Company recognizes revenue over time for contracts relating to the manufacturing, modifications and retrofits of its plating equipment, as the equipment is built to customer specification, and the Company has an enforceable right to payment for the performance completed to date. For these sales, the Company uses the cost-to-cost input method to measure progress. In cases, where cost-to-cost is not proportionate to its progress in satisfying the performance obligation because of uninstalled materials, the Company 69 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) adjusts the measure of progress and recognizes revenue to the extent of cost incurred to satisfy the performance obligation under the contract. Revenue from customized products with no alternative future use to the Company, and that have an enforceable right to payment for performance completed to date, is also recorded over time. The Company considers this to be a faithful depiction of the transfer to the customer of revenue over time as the work is performed or service is delivered. Adjustments for custom products were not material for 2025, 2024 or 2023. Installation services, other than those related to the Company’s plating equipment, are not significant, are usually completed in a short period of time and, therefore, are recorded at a point in time, rather than over time, as they are not material. Extended warranty, service contracts, and repair services, which are transferred to the customer over time, are recorded as revenue as the services are performed. For repair services, the Company makes an accrual at each quarter end based upon historical repair times within its product groups to record revenue based upon the estimated number of days completed to date, which is consistent with ratable recognition. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Performance obligations promised in a contract are identified based on the products or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the product or service is separately identifiable from other promises in the contract. Sales tax, value add tax, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company’s normal payment terms are generally 30 to 60 days but vary by the type and location of its customers and the products or services offered. The time between invoicing and when payment is due is not significant . For certain products and services and customer types, the Company requires payment before the products are delivered to, or the services are performed for, the customer. None of the Company’s contracts in each of the periods presented contained a significant financing component. Contracts with Multiple Performance Obligations The Company periodically enters into contracts with its customers in which a customer may purchase a combination of goods and or services, such as products with installation services or extended warranties. These contracts include multiple deliverables that the Company evaluates to determine if the deliverables are separate performance obligations. Once the Company determines the performance obligations, the Company then determines the transaction price, which includes estimating the amount of variable consideration to be included in the transaction price, if any. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method, depending on the method the Company expects to better predict the amount of consideration to which it will be entitled. There are no constraints on the variable consideration recorded. The Company then allocates the transaction price to each performance obligation in the contract based on a relative stand-alone selling price charged separately to customers or using an expected cost-plus-margin method. The corresponding revenues are recognized when or as the related performance obligations are satisfied, which are noted above. The impact of variable consideration was immaterial in each of the periods presented. The Company’s standard assurance warranty period is normally 12 to 24 months. The Company sells separately priced service contracts and extended warranty contracts related to certain of its products, in particular related to its plating and laser-based products. The separately priced contracts generally range from 12 to 60 months. The Company normally receives payment at the inception of the contract and recognizes revenue over the term of the agreement in proportion to the costs expected to be incurred in satisfying the obligations under the contract. The Company has elected to use the practical expedient related to disclosing the remaining performance obligations as of December 31, 2025 and 2024 , as the majority have a duration of less than one year . Costs to Obtain and Fulfill a Contract The Company expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administration expenses. The Company has elected to recognize the costs for freight and shipping when control over products has transferred to the customer as an expense in cost of sales. 70 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Accounts Receivable Allowances Accounts receivable allowances include sales returns and bad debt allowances. The Company monitors and tracks the amount of product returns and reduces revenue at the time of shipment for the estimated amount of such future returns, based on historical experience. The Company makes estimates evaluating its allowance for doubtful accounts. The Company continuously monitors collections and payments from its customers and maintains a provision for estimated credit losses based upon its historical experience, current economic conditions and any specific customer collection issues that it has identified. Research and Development Research and development costs are expensed as incurred and consist mainly of compensation-related expenses and project materials. The Company’s research and development efforts include numerous projects, which generally have a duration of 3 to 36 months. Acquired in-process research and development (“IPR&D”) expenses, if acquired in a business combination, are capitalized at fair value as an intangible asset until the related project is completed and are then amortized over the estimated useful life of the product. The Company monitors projects and, if they are abandoned, writes them off. Advertising Costs Advertising costs are expensed as incurred and were immaterial in 2025, 2024 and 2023. Government Incentives The Company receives government incentives or grants for certain qualifying capital investments, research and development, and other activities as defined by the relevant government entities awarding the incentive. Such incentives provided by government entities are recognized when the Company has reasonable assurance that it will comply with the conditions of the incentive and the incentive will be received. The Company has elected to classify capital grants as a reduction to the carrying amount of the related asset and income grants as a reduction to the related expense. The Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (the “CHIPS Act”), signed into law on August 9, 2022, and the One Big Beautiful Bill Act (“OBBBA”), signed into law on July 4, 2025, offer various tax incentives and credits, including the Advanced Manufacturing Investment Credit (“AMIC”). The AMIC equals 25 % of qualified investments made in an advanced manufacturing facility that is placed in service between January 1, 2023 and December 31, 2025. For qualified investments placed in service after December 31, 2025 , the AMIC increases to 35 % provided that construction begins before January 1, 2027. The Company expects to receive the AMIC in connection with ongoing expansion projects. As of December 31, 2025 , the Company recorded $ 44 in other current assets related to the AMIC with a corresponding reduction to the carrying amounts of the qualifying manufacturing assets in property, plant and equipment. The Company receives a benefit for the AMIC in the form of reduced depreciation expense, which is primarily recognized in cost of goods sold in the consolidated statement of operations, over the life of the manufacturing assets. As of December 31, 2025, the benefit to depreciation expense from the AMIC was immaterial. The impact of the AMIC on the consolidated financial statements as of December 31, 2025 and 2024 was immaterial. Other government incentives and grants were not material for December 31, 2025 and 2024 . Leases The Company accounts for leases under ASC Topic 842, “Leases” (“ASC Topic 842”). Under ASC Topic 842, a contract is or contains a lease when the Company has the right to control the use of the identified asset. The Company determines if an arrangement is a lease at inception of the contract, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. The commencement date of the lease is the date that the lessor makes an underlying asset available for use. The Company determines if the lease is an operating or finance lease at the lease commencement date based upon the terms of the lease and the nature of the asset. The lease term used to calculate the lease liability includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. 71 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) The Company measures the lease liability as the present value of future lease payments, discounted using the discount rate for the lease at the commencement date. The Company is typically unable to determine the implicit interest rate, so it uses an incremental borrowing rate based on the lease term and economic environment at commencement date. The right-of-use (“ROU”) asset is initially measured as the amount of the lease liability, adjusted for any initial lease costs, prepaid lease payments and reduced by any lease incentives. The Company’s contracts often include non-lease components such as common area maintenance. MKS has elected the practical expedient to account for the lease and non-lease components as a single lease component. For leases with a term of one year or less the Company has elected not to record the lease asset or liability. The lease payments are recognized in the consolidated statements of operations and comprehensive income (loss) on a straight-line basis over the lease term. The Company includes lease costs within cost of revenues and operating expenses. Stock-Based Compensation The accounting for share-based compensation expense requires the measurement and recognition of compensation expense for all stock-based awards for employees and directors based on estimated fair values. Stock-based awards include (i) time-based restricted stock units (“time-based RSUs”), (ii) performance-based RSUs based on the achievement of Company adjusted EBITDA targets over a one-year performance period (the “Adjusted EBITDA RSUs”), (iii) performance-based RSUs based on the Company’s total shareholder return relative to a group of peers over a three-year performance period (the “rTSR RSUs”) and (iv) employee stock purchase plan rights. The Company determines the fair value of time-based RSUs based on the closing market price of the Company’s common stock on the date of grant reduced by the present value of dividends expected to be paid on the Company’s common stock prior to vesting. The Company does not include a forfeiture rate in the fair value measurement at the date of grant. Time-based RSUs granted to employees generally vest 33 % per year over three years , beginning on the first anniversary of the grant date and are expensed on a straight-line basis over three years from the grant date. Time-based RSUs granted to directors generally vest on the earliest of (1) one day prior to the next annual shareholder meeting or (2) 13 months from date of grant. The Company determines the original fair value of Adjusted EBITDA RSUs, which are only granted to the Company’s executive officers and certain other officers, based upon the closing market price of the Company’s common stock on the date of grant reduced by the present value of dividends expected to be paid on the Company’s common stock prior to vesting and adjusts the fair value quarterly during the one-year performance period based upon actual and forecasted results against Company Adjusted EBITDA targets. The Company does not include a forfeiture rate in the fair value measurement at the date of grant. Adjusted EBITDA RSUs vest 33 % per year over three years beginning on the first anniversary of the grant date, with compensation expense recognized according to the graded vesting method over three years. These awards are based on the Company’s achievement of Adjusted EBITDA for a one-year performance period, defined as GAAP operating income for the relevant year excluding any charges or income not related to the operating performance of the Company plus depreciation, amortization and stock compensation expense. The final number of Adjusted EBITDA RSUs earned is based on the actual level of performance achieved, which ranges from 0 % to 200 % of Adjusted EBITDA RSU target achievement. The Company estimates the fair value of rTSR RSUs, which are only granted to the Company’s executive officers and certain other officers, using the Monte Carlo simulation model, which requires the use of highly subjective and complex assumptions, including the price volatility of the underlying common stock. rTSR RSUs vest in full on the three-year anniversary of the grant date, subject to achievement of performance criteria and are expensed on a straight-line basis over three years from the grant date. The final number of rTSR RSUs earned is based on the Company’s total shareholder return relative to a group of peers over the three-year performance period. Employees who meet the retirement eligibility requirements under their RSU agreements may be eligible for full or partial acceleration of vesting of their time-based RSUs, Adjusted EBITDA RSUs and rTSR RSUs. Expense is recognized between twelve and thirty-six months from the date of grant, depending on when the retirement eligibility requirements are met. For certain grandfathered retirement eligibility provisions applicable to certain executive officers, time‑based RSUs are fully expensed on the grant date, while Adjusted EBITDA RSUs and rTSR RSUs may be expensed on a pro‑rated basis. The Company also provides certain employees with the opportunity to purchase shares through its 2014 Employee Stock Purchase Plan (“2014 ESPP”). The Company estimates the fair value of employee stock purchase plan rights using the Black-Scholes model which incorporates a number of complex and subjective variables, including expected stock price 72 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) volatility over the term of the awards, expected life, risk-free interest rate and expected dividends. Management determined that blended volatility, a combination of historical and implied volatility, is more reflective of market conditions and a better indicator of expected volatility than historical or implied volatility alone. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, stock-based compensation expense could be materially different in the future. Accumulated Other Comprehensive Income (Loss) For foreign subsidiaries where the functional currency is the local currency, assets and liabilities are translated into U.S. dollars at the current exchange rate on the consolidated balance sheets date. Revenue and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to Other Comprehensive Income (Loss) (“OCI”). Unrealized gains and losses on securities classified as available-for-sale and unrecognized pension gains and losses are recorded to OCI. For derivative instruments and interest rate swap hedges designated as cash-flow hedges, the effective portion of the derivative’s gain (loss) is initially reported as a component of OCI and is subsequently recognized in earnings, upon reclassification from accumulated OCI. The related tax effects of OCI items are recorded in income tax expense within the statement of operations, upon reclassification from accumulated OCI. Net Income (Loss) Per Share Basic net income (loss) per share is based on the weighted average number of common shares outstanding and diluted net income (loss) per share is based on the weighted average number of common shares outstanding and all potential dilutive common equivalent shares outstanding. The dilutive effect of equity awards is determined under the treasury stock method using the average market price for the period. The dilutive effect of the Convertible Notes, as defined and further described in Note 14 to the Notes to Consolidated Financial Statements, is calculated under the if-converted method. Common equivalent shares are included in the per share calculations when the effect of their inclusion would be dilutive. In periods in which a net loss is recognized, common equivalent shares are not included as they are antidilutive. Cash and Cash Equivalents and Investments All highly liquid investments with a maturity date of three months or less at the date of purchase are considered to be cash equivalents. The appropriate classification of investments in securities is determined at the time of purchase. Debt securities that the Company does not have the intent and ability to hold to maturity are classified as “available-for-sale” and are carried at fair value. The Company classifies investments with maturity dates greater than twelve months in short-term investments rather than long-term investments. This method classifies these securities as current based on the nature of the securities and the availability for use in current operations. The Company believes this method is preferable because it is more reflective of the Company’s assessment of its overall liquidity position. The Company reviews its investment portfolio on a quarterly basis to identify and evaluate individual investments that have indications of possible impairment. The factors considered in determining whether a loss is other-than-temporary include: the length of time and extent to which fair market value has been below the cost basis, the financial condition and near-term prospects of the issuer, credit quality, and the Company’s ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. Concentrations of Credit Risk The Company’s significant concentrations of credit risk consist principally of cash and cash equivalents, foreign exchange forward contracts, interest rate swaps and trade accounts receivable. The Company maintains cash and cash equivalents with financial institutions, including some banks with which it has borrowings. The Company enters into foreign exchange forward contracts with high credit-quality financial institutions in order to minimize credit risk exposure. 73 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) The Company’s largest customers are primarily concentrated in the semiconductor industry, and a limited number of these customers account for a significant portion of the Company’s revenues. The Company regularly monitors the creditworthiness of its customers and believes it has adequately provided for potential credit loss exposures. Credit is extended for all customers based primarily on financial condition, and collateral is not required. During 2025, 2024 and 2023, approximately 43 % , 42 % , and 41 % of the Company’s net revenues, respectively, were from sales to customers in the semiconductor market. No single customer represented greater than 10 % of the Company’s accounts receivable balance as of December 31, 2025 or 2024 . Inventories Inventories are stated at the lower of cost or net realizable value, cost being determined using a standard costing system that approximates actual cost, based on a first-in, first-out method. The Company regularly reviews inventory quantities on hand and records a provision to write-down excess and obsolete inventory to its estimated net realizable value, if less than cost, based primarily on its estimated forecast of product demand. Once the Company’s inventory value is written-down and a new cost basis has been established, the inventory value is not increased due to demand increases. Property, Plant and Equipment Property, plant and equipment are stated at cost. Expenditures for major renewals and betterments that extend the useful lives of property, plant and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized in earnings. Depreciation is provided on the straight-line method over the estimated useful lives of ten to fifty years for buildings and building improvements, and three to fifteen years for machinery and equipment, furniture and fixtures, office equipment and software. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the leased asset. Acquisition Accounting The fair value of the consideration exchanged in a business combination is allocated to tangible assets and identifiable intangible assets acquired and liabilities assumed at acquisition date fair value. Goodwill is measured as the excess of the consideration transferred over the net fair value of identifiable assets acquired and liabilities assumed. The accounting for an acquisition involves a considerable amount of judgment and estimation. Cost, income, market or a combination of approaches may be used to establish the fair value of consideration exchanged, assets acquired, and liabilities assumed, depending on the nature of those items. The valuation approach is determined in accordance with generally accepted valuation methods. Key areas of estimation and judgment may include the selection of valuation approaches, cost of capital, market characteristics, cost structure, impacts of synergies, and estimates of terminal value, among other factors. While the Company uses estimates and assumptions as part of the purchase price allocation process to estimate the value of assets acquired and liabilities assumed, estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill, to the extent that adjustments are identified to the preliminary purchase price allocation. Upon conclusion of the measurement period, or final determination of the value of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to results of operations. Intangible Assets Intangible assets resulting from the acquisitions of businesses are estimated by management based on the fair value of assets acquired. These include acquired customer lists, completed technology, patents, trademarks, trade names, backlog and IPR&D. Definite-lived intangible assets, other than IPR&D, are amortized from one to eighteen years on a straight-line basis, which represents the estimated periods of benefit and the expected pattern of consumption. IPR&D is not subject to amortization until reclassification into completed technology. Upon completion of a project, the Company expects the corresponding IPR&D intangible assets to be amortized over an estimated useful life of eight to nine years . 74 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Indefinite-lived intangible assets, such as trade names, are not amortized; they are subject to annual impairment testing as well as testing upon the occurrence of any event that indicates a potential impairment. Goodwill Goodwill is the amount by which the cost of acquired net assets exceeded the fair value of those net assets on the date of acquisition. The Company allocates goodwill to reporting units at the time of acquisition or when there is a change in the reporting structure and bases that allocation on which reporting units will benefit from the acquired assets and liabilities. Reporting units are defined as operating segments or one level below an operating segment, referred to as a component. The Company assesses goodwill for impairment on an annual basis as of October 31 or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. The estimated fair value of the Company’s reporting units is based on discounted cash flow models derived from internal earnings and internal and external market forecasts. Determining fair value requires the exercise of significant judgment, including judgments about appropriate discount and terminal growth rates, as well as forecasted revenue, gross profit and operating expenses. Discount rates are based on a weighted average cost of capital (“WACC”), which represents the average rate a business must pay its providers of debt and equity. The WACC used to test goodwill is derived from a group of comparable companies. Assumptions in estimating future cash flows are subject to a high degree of judgment and complexity. The Company makes every effort to forecast these future cash flows as accurately as possible with the information available at the time the forecast is developed. In performing the Company’s annual goodwill impairment test, the Company is permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of the Company’s reporting unit exceeds its carrying amount, including goodwill. In performing the qualitative assessment, the Company considers certain events and circumstances specific to the reporting unit and to the entity as a whole, such as macroeconomic conditions, industry and market considerations, overall financial performance and cost factors when evaluating whether it is more likely than not that the fair value of the reporting unit exceeds its carrying amount. The Company is also permitted to bypass the qualitative assessment and proceed directly to the quantitative assessment. If the Company chooses to undertake the qualitative assessment and concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company would then proceed to the quantitative impairment assessment. In the quantitative assessment, the Company compares the fair value of the reporting unit to its carrying amount, which includes goodwill. If the fair value exceeds the carrying value, no impairment loss exists. If the fair value is less than the carrying amount, a goodwill impairment loss is measured and recorded. Long-Lived Assets The Company evaluates the recoverability of its long-lived assets whenever events and changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. This periodic review may result in an adjustment of estimated depreciable lives or asset impairment. When indicators of impairment are present, the carrying values of the asset are evaluated in relation to their operating performance and future undiscounted cash flows of the underlying business. If the future undiscounted cash flows are less than their carrying value, impairment exists. The impairment is measured as the difference between the carrying value and the fair value of the underlying asset. Fair values are based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk. Foreign Exchange The functional currency of the majority of the Company’s foreign subsidiaries is the applicable local currency. For those subsidiaries, assets and liabilities are translated to U.S. dollars at year-end exchange rates. Income and expense accounts are translated at the average exchange rates prevailing during the year. The resulting translation adjustments are included in OCI in consolidated stockholders’ equity. Foreign exchange transaction gains and losses are classified in other expense (income), net in the statement of operations and comprehensive income (loss). Net foreign exchange losses resulting from re-measurement were $ 18 , $ 0 , and $ 30 for the years ended December 31, 2025, 2024, and 2023, respectively, and are included in other expense (income), net. These amounts do not reflect the corresponding gain (loss) from foreign exchange forward contracts, which are included in cost of sales. See Note 8 to the Notes to Consolidated Financial Statements regarding foreign exchange forward contracts. 75 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Employee Benefit Plans The majority of the Company’s employees participate in defined contribution plans, whereby the Company, at its discretion, makes certain matching contributions based on participating employees’ annual contribution to the plan and their total compensation. The Company also has defined benefit retirement plans at certain of its foreign subsidiaries. The majority of these defined benefit plans are frozen and do not allow new employees to join the plan. The Company accounts for these plans based on the provisions of ASC Topic 715, “Compensation-Retirement Benefits.” Some of the key assumptions used to calculate the pension expense and projected benefit obligation include the discount rate, rate of forecasted salary increases, the expected long-term rate of return on plan assets and expected mortality. The obligation for these claims and the related periodic costs are measured using actuarial techniques and assumptions. Actuarial gains and losses are deferred and amortized over future periods. Income Taxes The Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and also for operating loss and tax credit carryforwards. On a quarterly basis, the Company evaluates both the positive and negative evidence that affects the realizability of net deferred tax assets and assesses the need for a valuation allowance. The future benefit to be derived from its deferred tax assets is dependent upon its ability to generate sufficient future taxable income in each jurisdiction of the right type to realize the assets. The Company records a valuation allowance to reduce its net deferred tax assets to the amount that is expected to be realized. To the extent the Company establishes a valuation allowance an expense will be recorded as a component of the provision for income taxes on the statement of operations. Accounting for income taxes requires a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if, based on the technical merits, it is more likely than not that the position will be sustained upon audit, including resolutions of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50 % likely of being realized upon ultimate settlement. The Company re-evaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit and new audit activity. Any change in these factors could result in the recognition of a tax benefit or an additional charge to the tax provision. Income tax effects resulting from changes in tax law are accounted for by the Company in the period in which the law is enacted and the effects are recorded as a component of provision for income taxes from continuing operations. Derivatives As a result of the Company's global operating activities and variable interest rate borrowings, the Company is exposed to market risks from changes in foreign currency exchange rates and interest rates, which may adversely affect its operating results and financial position. The Company enters into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments and those utilized as economic hedges. The Company does not enter into derivative instruments for trading or speculative purposes. The Company uses derivative instruments, such as foreign exchange forward contracts, options and net investment hedges, to manage certain foreign currency exposure, and interest rate swaps and interest rate caps to manage certain interest rate exposure. Changes in fair value of derivative instruments are recognized in the consolidated statement of operations or, if hedge accounting is applied, in OCI for the effective portion of the changes in fair value. The cash flows resulting from foreign exchange forward contracts are classified in the consolidated statements of cash flows as part of cash flows from operating activities. All derivatives are stated at fair value in the consolidated balance sheets. Accounting principles for qualifying hedges require detailed documentation that describes the relationship between the hedging instrument and the hedged item, including, but not limited to, the risk management objectives and hedging strategy and the methods to assess the effectiveness of the hedging relationship. The Company assesses the hedging relationships, both at the inception of the hedge and on an ongoing basis, using either the critical terms matching approach 76 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) or a regression analysis approach to determine whether the designated hedging instrument is highly effective in offsetting changes in the value of the hedged item. By nature, all financial instruments involve market and credit risks. The Company enters into derivative instruments with major investment grade financial institutions, for which no collateral is required. The Company has policies to monitor the credit risk of these counterparties. While there can be no assurance, the Company does not anticipate any material non-performance by any of these counterparties. (4) Recent Accounting Pronouncements Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which focuses on the rate reconciliation and income taxes paid. ASU 2023-09 requires a public business entity (“PBE”) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local and foreign and by jurisdiction if the amount is at least 5 % of total income tax payments, net of refunds received. For PBEs, the new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. An entity may apply the amendments prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods or may apply the amendments retrospectively by providing the revised disclosures for all periods presented. The Company adopted this standard during fiscal year 2025. The adoption of this standard only impacts disclosures and did not have a material impact on the Company’s consolidated financial statements. Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public companies to disclose, in interim and annual reporting periods, additional disaggregated information about certain income statement expense line items in the notes to financial statements. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact on its consolidated financial statement disclosures; however, adoption will not impact its consolidated balance sheets, cash flows or income statements. Derivatives and Hedging (Topic 815): Hedge Accounting Improvements In November 2025, the FASB issued ASU No, 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements (“ASU 2025-09”), which focuses on aligning hedge accounting with the economics of an entity’s risk management activities. The amendments in ASU 2025-09 are effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of adopting the new standard. Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (“ASU 2025-10”), which establishes authoritative guidance on the recognition, measurement, presentation and disclosure of government grants received by business entities. The amendments in ASU 2025-10 are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-10 but does not expect ASU 2025-10 adoption to have a material impact on its consolidated financial statements. 77 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Interim Reporting (Topic 270): Narrow-Scope Improvements In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”), which clarifies interim disclosure requirements and the applicability of Topic 270. The amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11 but does not expect ASU 2025-11 adoption to have a material impact on its consolidated financial statements. (5) Revenue from Contracts with Customers Contract assets as of December 31, 2025 and 2024 were $ 45 and $ 30 , respectively. Contract assets reflect revenue recognized and performance obligations satisfied or partially satisfied in advance of customer billing. The Company has elected to use the practical expedient and is not disclosing the remaining performance obligations related to deferred revenue and customer advances because these obligations generally have a duration of less than one year. A roll forward of the Company’s deferred revenue and customer advances was as follows: 2025 2024 Beginning of period (1) $ 73 $ 79 Additions to deferred revenue and customer advances 217 134 Amount of deferred revenue and customer advances recognized in income ( 207 ) ( 140 ) End of period (2) $ 83 $ 73 (1) Beginning deferred revenue and customer advances balances as of January 1, 2025 included $ 71 of current deferred revenue and customer advances and $ 2 of long-term deferred revenue. Beginning deferred revenue and customer advances balances as of January 1, 2024 included $ 77 of current deferred revenue and customer advances and $ 2 of long-term deferred revenue. The majority of the beginning balance in 2025 and 2024 was recognized in each year. (2) Ending deferred revenue and customer advances balances as of December 31, 2025 included $ 79 of current deferred revenue and customer advances and $ 4 of long-term deferred revenue. Ending deferred revenue and customer advances balances as of December 31, 2024 included $ 71 of current deferred revenue and customer advances and $ 2 of long-term deferred revenue. Revenue from certain custom products, including MSD plating equipment, and revenue from certain service contracts are recorded over time. Remaining product and services revenues are recorded at a point in time. Disaggregation of Revenue The following table summarizes revenue from contracts with customers in the Company’s three end markets: Semiconductor, Electronics and Packaging, and Specialty Industrial. Years Ended December 31, 2025 2024 2023 Semiconductor $ 1,696 $ 1,498 $ 1,479 Electronics and Packaging 1,111 922 916 Specialty Industrial 1,124 1,166 1,227 Total net revenues $ 3,931 $ 3,586 $ 3,622 Refer to Note 20 for revenue by reportable segment, geography and groupings of similar products. 78 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) (6) Net Income (Loss) Per Share The following table sets forth the computation of basic and diluted net income (loss) per share: Years Ended December 31, Numerator: 2025 2024 2023 Net income (loss) $ 295 $ 190 $ ( 1,841 ) Denominator: Shares used in net income (loss) per common share - basic 67.3 67.3 66.8 Effect of dilutive securities 0.4 0.3 — Shares used in net income (loss) per common share - diluted 67.7 67.6 66.8 Net income (loss) per common share: Basic $ 4.39 $ 2.82 $ ( 27.54 ) Diluted $ 4.37 $ 2.81 $ ( 27.54 ) Basic earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed by dividing the diluted net income (loss) available to common stockholders by the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period. The dilutive effect of equity awards is calculated based on the average stock price for the relevant period, using the treasury stock method. In periods in which a net loss is recognized, the impact of RSUs is not included as they are antidilutive. The dilutive effect of the Convertible Notes is calculated under the if-converted method. In 2025 and 2024 , the Company had an immaterial quantity of RSUs that were antidilutive and excluded from the computation of diluted weighted-average shares. Shares of common stock that would have been issued if the Convertible Notes had been converted are not included in the calculation of diluted net income per common share as the Company’s average share price during these periods was below the initial conversion price and inclusion would be antidilutive. (7) Fair Value Measurements In accordance with the provisions of fair value accounting, a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model. The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments or securities or derivative contracts that are valued using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company categorizes such assets and liabilities based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. 79 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Assets and liabilities of the Company are measured at fair value on a recurring basis as of December 31, 2025, and are summarized as follows: Fair Value Measurements at Reporting Date Using Description December 31, 2025 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents Money market funds $ 246 $ 246 $ — $ — Time deposits 11 — 11 — Equity securities 2 2 — — Available-for-sale securities: Group insurance contracts 6 — 6 — Derivatives Foreign exchange forward contracts 1 — 1 — Interest rate swaps - current 1 — 1 — Interest rate swaps - non-current 5 — 5 — Pension and deferred compensation plan assets 27 — 27 — Total assets $ 299 $ 248 $ 51 $ — Liabilities: Derivatives Foreign exchange forward contracts-current $ 2 $ — $ 2 $ — Interest rate swaps - current 5 — 5 — Total liabilities $ 7 $ — $ 7 $ — Reported as follows: Assets: Cash and cash equivalents (1) $ 257 $ 246 $ 11 $ — Other current assets 2 — 2 — Total current assets $ 259 $ 246 $ 13 $ — Other assets $ 40 $ 2 $ 38 $ — Liabilities: Other current liabilities $ 7 $ — $ 7 $ — (1) The cash and cash equivalents amount presented in the table above does not include cash of $ 418 as of December 31, 2025. 80 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Assets and liabilities of the Company are measured at fair value on a recurring basis as of December 31, 2024, and are summarized as follows: Fair Value Measurements at Reporting Date Using Description December 31, 2024 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents Money market funds $ 289 $ 289 $ — $ — Time deposits 5 — 5 — Equity securities 1 1 — — Available-for-sale securities: Group insurance contracts 6 — 6 — Derivatives Foreign exchange forward contracts 9 — 9 — Interest rate swaps - current 3 — 3 — Interest rate swaps - non-current 35 — 35 — Pension and deferred compensation plan assets 22 — 22 — Total assets $ 370 $ 290 $ 80 $ — Liabilities: Derivatives Foreign exchange forward contracts-current $ 3 $ — $ 3 $ — Interest rate swaps - current 4 — 4 — Total liabilities $ 7 $ — $ 7 $ — Reported as follows: Assets: Cash and cash equivalents (1) $ 294 $ 289 $ 5 $ — Other current assets 12 — 12 — Total current assets $ 306 $ 289 $ 17 $ — Other assets $ 64 $ 1 $ 63 $ — Liabilities: Other current liabilities $ 7 $ — $ 7 $ — (1) The cash and cash equivalents amount presented in the table above does not include cash of $ 420 as of December 31, 2024 . Other Fair Value Disclosures The estimated carrying value and fair value of the Company’s debt were as follows: Years Ended December 31, 2025 2024 Carrying Value Fair Value Carrying Value Fair Value Term Loan Facility $ 2,878 $ 2,900 $ 3,249 $ 3,262 Convertible Notes 1,400 1,792 1,400 1,357 Total $ 4,278 $ 4,692 $ 4,649 $ 4,619 The estimated fair value of the Company’s Term Loan Facility, as defined and further described in Note 14, was determined using available market information based on recent trades or activity of debt instruments with substantially similar risks, terms and maturities, which fall within Level 2 under the fair value hierarchy. The estimated fair value of the Company’s Convertible Notes, as defined and further described in Note 14, was determined based on the last traded price of the Convertible Notes for the period ended December 31, 2025, and falls under Level 2 of the fair value hierarchy. 81 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Money Market Funds Money market funds are cash and cash equivalents and are classified within Level 1 of the fair value hierarchy. Pension and Deferred Compensation Plan Assets The pension and deferred compensation plan assets represent investments in mutual funds, exchange traded funds, government securities and other time deposits. These investments are set aside for retirement benefits for employees of certain of the Company’s subsidiaries. Derivatives As a result of the Company’s global operating activities and variable interest rate borrowings, the Company is exposed to market risks from changes in foreign currency exchange rates and interest rates, which may adversely affect its operating results and financial position. When appropriate, the Company uses derivative financial instruments to minimize its exposure to risks from foreign currency exchange rate and interest rate fluctuations. The principal market in which the Company executes its foreign currency and interest rate contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants are typically large commercial banks. The contracts are valued using broker quotations or market transactions. (8) Derivatives and Net Investment Hedge Foreign Exchange Forward Contracts The Company hedges a portion of its forecasted foreign currency-denominated intercompany sales of inventory and certain of its foreign subsidiaries’ operating expenses, over a maximum period of twenty-four months , using foreign exchange forward contracts accounted for as cash-flow hedges. To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, and otherwise meet the hedge accounting criteria, changes in the derivatives’ fair value are not included in current earnings but are included in OCI in stockholders’ equity. These changes in fair value will subsequently be reclassified into earnings as applicable, when the forecasted transaction occurs. To the extent that a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded in earnings in the period it occurs. The cash flows resulting from foreign exchange forward contracts are classified in the consolidated statements of cash flows as part of cash flows from operating activities. The Company also enters into foreign exchange forward contracts to hedge against certain monetary asset and liability accounts on the consolidated balance sheet to mitigate the risk associated with certain foreign currency transactions in the ordinary course of business. These derivatives are not designated as cash flow hedging instruments and gains or losses from these derivatives are recorded immediately in other expense (income), net. The following table summarizes the net notional values of foreign exchange forward contracts outstanding: Years Ended December 31, 2025 2024 Designated as cash flow hedging instruments: Foreign exchange forward contracts - cash flow hedges $ 5 $ 74 Not designated as cash flow hedging instruments: Foreign exchange forward contracts - balance sheet hedges $ 367 $ 154 As of December 31, 2025 , the Canadian dollar was the only notional contract for designated cash flow hedging instruments. As of December 31, 2024, the Japanese yen and the South Korean won were the largest notional contracts designated as cash flow hedging instruments. 82 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) As of December 31, 2025, the Euro, Chinese yuan, British pound and New Taiwan dollar were the largest notional contracts for balance sheet hedges not designated as cash flow hedging instruments. As of December 31, 2024, the British pound and Chinese yuan were the largest notional contracts for balance sheet hedges not designated as a hedging instrument. Net Investment Hedge On January 1, 2023, the Company designated certain Euro-denominated debt as a net investment hedge to hedge a portion of its net investments in certain of its entities with functional currencies denominated in the Euro. On January 22, 2024, the Company prepaid its USD Tranche A in full using, in part, a € 250 incremental borrowing under its Euro Tranche B, each as defined and further described in Note 14. On January 22, 2024, the Company designated the additional € 250 of its Euro Tranche B as a net investment hedge. As of December 31, 2025, the total principal amount outstanding under its Euro Tranche B was € 587 and the entire balance was designated as a net investment hedge. As of December 31, 2024, the total principal amount outstanding under its Euro Tranche B was € 596 and the entire balance was designated as a net investment hedge. For these net investment hedges, the Company records foreign currency remeasurement gains and losses within a component of OCI. Recognition in earnings of amounts previously recorded in accumulated OCI is limited to circumstances such as complete or substantially complete liquidation or sale of the net investment in the hedged foreign operations. Interest Rate Agreements The Company has various interest rate swap agreements, which are cash-flow hedges, maturing through January 31, 2029, that exchange a one-month forward-looking term rate based on the variable secured overnight financing rate (“Term SOFR”) paid on the outstanding balance of its USD Term Loan Facility, as defined and further described in Note 14, to a fixed rate. The notional value of the agreements was $ 1,900 and $ 2,600 as of December 31, 2025 and December 31, 2024 , respectively. The Company acquired USD London Interbank Offered Rate (“LIBOR”) interest rate cap agreements as a result of its acquisition of Atotech Limited (“Atotech”) on August 17, 2022 (the “Atotech Acquisition”) and had utilized these agreements to offset Term SOFR on its Term Loan Facility. The interest rate cap agreements expired on January 31, 2024 . The interest rate swaps are recorded at fair value on the balance sheet and changes in the fair value are recognized in OCI. To the extent these arrangements are no longer effective hedges, the hedging relationship will be discontinued and changes in the fair value of the hedging instruments from the last assessment period that were effective up to the current period will be recorded immediately in earnings. Amounts previously recorded in OCI will remain in OCI and will be reclassified to earnings when the interest payments impact consolidated earnings. If the Company determines that the interest payments are unlikely to occur, amounts previously recorded in OCI will be reclassified to earnings immediately. Changes in the fair value of interest rate caps were recorded immediately in earnings, as the Company did not designate these instruments as hedges and therefore these instruments did not qualify for hedge accounting. The cash flows resulting from interest rate agreements were classified in cash flows from operating activities in the consolidated statements of cash flows. The following table summarizes the net gains (losses) on derivatives designated as cash flow hedging instruments: Years Ended December 31, 2025 2024 2023 Foreign exchange forward contracts-cash flow hedges: Net (losses) gains recognized in OCI, net of tax $ ( 4 ) $ 6 $ 1 Net gains (losses) reclassified from accumulated OCI into cost of revenues $ 4 $ 6 $ 7 Interest rate hedges: Net (losses) gains recognized in OCI, net of tax $ ( 25 ) $ ( 7 ) $ ( 25 ) Net gains (losses) reclassified from accumulated OCI into interest expense $ 20 $ 61 $ 45 For derivatives designated as cash flow hedging instruments as of December 31, 2025 , t he Compan y expects an immaterial amount of gains or losses to be reclassified from accumulated OCI into cost of revenues related to foreign exchange forward contracts and into interest expense related to interest rate hedges during the next 12 months. The following table summarizes the net (losses) gains on derivatives not designated as hedging instruments: 83 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Years Ended December 31, 2025 2024 2023 Net (losses) gains recognized in other expense (income), net $ ( 3 ) $ ( 2 ) $ ( 32 ) The interest rate caps resulted in a reduction of $ 3 and $ 30 to interest expense in 2024 and 2023, respectively. Derivative instruments are subject to master netting arrangements. However, the Company has elected to record these contracts on a gross basis in the consolidated balance sheet. The location and fair value amounts of derivative instruments reported in the consolidated balance sheet is disclosed in Note 7. (9) Inventories Inventories consist of the following: Years Ended December 31, 2025 2024 Raw materials $ 617 $ 618 Work-in-process 116 97 Finished goods 188 178 Total $ 921 $ 893 Inventory-related excess and obsolete charges of $ 45 , $ 56 and $ 64 were recorded in cost of products and services in the years ended December 31, 2025, 2024 and 2023 , respectively. (10) Property, Plant and Equipment Property, plant and equipment consist of the following: Years Ended December 31, 2025 2024 Land $ 86 $ 80 Buildings and building improvements 379 322 Machinery and equipment 651 646 Furniture and fixtures, office equipment and software 216 194 Leasehold improvements 190 183 Construction in progress 147 82 1,669 1,507 Less: accumulated depreciation 859 736 Total $ 810 $ 771 Depreciation of property, plant and equipment totaled $ 97 , $ 103 and $ 102 for the years ended 2025, 2024 and 2023 , respectively. (11) Leases The Company has various operating leases for real estate and non-real estate items. The non-real estate leases are mainly comprised of automobiles but also include office equipment and other lower-valued items. 84 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Leases consist of the following: Years Ended December 31, 2025 2024 2023 Operating lease cost (1) $ 41 $ 37 $ 31 Finance lease cost 10 9 9 Short-term lease 6 8 12 Total lease cost $ 57 $ 54 $ 52 (1) Operating lease cost includes an immaterial amount of variable expenses, offset by certain sublease rental income. Supplemental cash flow information related to leases was as follows: Years Ended December 31, 2025 2024 2023 Cash paid for amounts included in measurement of liabilities: Operating cash flows used for operating leases (1) $ 37 $ 33 $ 34 Operating cash flows used for finance leases 3 2 1 Financing cash flows used for finance leases 3 15 4 ROU assets obtained in exchange for new lease liabilities: Operating leases 14 26 25 Finance leases 46 12 1 (1) Operating cash flows used for operating leases for the year ended December 31, 2023 include an immaterial amount of tenant improvement allowance receipts. The weighted average remaining terms for all leases were as follows: Years Ended December 31, 2025 2024 Weighted-average remaining lease term years-operating leases 10.5 11.5 Weighted-average remaining lease term years-finance leases 22.5 13.1 Weighted-average discount rate-operating leases 3.8 % 3.7 % Weighted-average discount rate-finance leases 5.5 % 5.2 % Future lease payments under non-cancelable leases as of December 31, 2025 are detailed as follows: Year Ending December 31, Operating Leases Finance Leases 2026 $ 35 $ 6 2027 31 6 2028 23 6 2029 20 6 2030 16 6 Thereafter 118 102 Total lease payments 243 132 Less: imputed interest 41 57 Total lease liabilities $ 202 $ 75 Amounts presented above do not include payments relating to immaterial leases excluded from the consolidated balance sheets as well as leases with terms of less than twelve months. (12) Goodwill and Intangible Assets The Company’s methodology for allocating the purchase price of an acquisition is determined through established and generally accepted valuation techniques. Goodwill is measured as the excess of the cost of the acquisition over the sum of 85 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) the amounts assigned to tangible and identifiable intangible assets acquired less liabilities assumed. The Company assigns assets acquired (including goodwill) and liabilities assumed to one or more reporting units as of the date of acquisition. If the products obtained in an acquisition are assigned to multiple reporting units, the goodwill is distributed to the respective reporting units as part of the purchase price allocation process. Goodwill and intangible assets with indefinite useful lives are not amortized but are reviewed for impairment annually during the fourth quarter of each fiscal year or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. To measure impairment, the Company compares the fair value of the reporting unit to its carrying amount, which includes goodwill. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, no impairment exists. If the fair value of the reporting unit is less than the carrying value of the reporting unit, a goodwill impairment is recorded. Amortizable intangible assets and other long-lived assets are also subject to an impairment test if there is an indicator of impairment. When the Company determines that the carrying value of intangible assets or other long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, the Company uses the projected undiscounted cash flow method to determine whether an impairment exists, and then measures the impairment using discounted cash flows. The process of evaluating the potential impairment of goodwill, intangible assets and other long-lived assets requires significant judgment. The Company regularly monitors current business conditions and other factors, including, but not limited to, adverse industry or economic trends, restructuring actions and lower projections of profitability that may impact future operating results. The Company’s stock price and any estimated control premium are factors affecting the assessment of the fair value of the Company’s underlying reporting units for purposes of performing any goodwill impairment assessment. Goodwill Effective January 1, 2025, the Company reassigned goodwill to certain reporting units within PSD resulting from a reorganization of the business. The goodwill was reassigned to the new reporting units using the relative fair value approach. The Company also concluded that the fair value of each reporting unit immediately before and after the reorganization exceeded its respective carrying value. Goodwill associated with each of the Company’s reportable segments was as follows: VSD PSD MSD Total Reportable segment: Gross goodwill at December 31, 2024 $ 358 $ 1,003 $ 2,951 $ 4,312 Foreign currency translation adjustments — 9 86 95 Gross goodwill at December 31, 2025 358 1,012 3,037 4,407 Accumulated goodwill impairment at December 31, 2024 ( 141 ) ( 390 ) ( 1,302 ) ( 1,833 ) Impairment charge — — — — Accumulated goodwill impairment at December 31, 2025 ( 141 ) ( 390 ) ( 1,302 ) ( 1,833 ) Goodwill, net of accumulated impairment and foreign currency translation adjustments at December 31, 2025 $ 217 $ 622 $ 1,735 $ 2,574 86 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) VSD PSD MSD Total Reportable segment: Gross goodwill at December 31, 2023 $ 335 $ 1,031 $ 3,021 $ 4,387 Movement of OSP product line 24 ( 24 ) — — Foreign currency translation adjustments ( 1 ) ( 4 ) ( 70 ) ( 75 ) Gross goodwill at December 31, 2024 358 1,003 2,951 4,312 Accumulated goodwill impairment at December 31, 2023 ( 141 ) ( 390 ) ( 1,302 ) ( 1,833 ) Impairment charge — — — — Accumulated goodwill impairment at December 31, 2024 ( 141 ) ( 390 ) ( 1,302 ) ( 1,833 ) Goodwill, net of accumulated impairment and foreign currency translation adjustments at December 31, 2024 $ 217 $ 613 $ 1,649 $ 2,479 As of October 31, 2025 and 2024, the Company performed its annual impairment assessment of goodwill using a qualitative assessment for all of its reporting units. The Company determined that it was more likely than not that the fair values were more than the carrying values for each of the reporting units. Intangible Assets The Company’s intangible assets were comprised of the following: As of December 31, 2025 Gross Accumulated Impairment Charges Accumulated Amortization Foreign Currency Translation Net Completed technology $ 1,268 $ ( 152 ) $ ( 587 ) $ ( 3 ) $ 526 Customer relationships 2,072 ( 1 ) ( 622 ) ( 5 ) 1,444 Patents, trademarks, trade names and other 381 ( 63 ) ( 141 ) ( 7 ) 170 $ 3,721 $ ( 216 ) $ ( 1,350 ) $ ( 15 ) $ 2,140 As of December 31, 2024 Gross Accumulated Impairment Charges Accumulated Amortization Foreign Currency Translation Net Completed technology $ 1,268 $ ( 152 ) $ ( 496 ) $ ( 31 ) $ 589 Customer relationships 2,072 ( 1 ) ( 477 ) ( 86 ) 1,508 Patents, trademarks, trade names and other 381 ( 63 ) ( 130 ) ( 13 ) 175 $ 3,721 $ ( 216 ) $ ( 1,103 ) $ ( 130 ) $ 2,272 Aggregate amortization expense related to acquired intangible assets for 2025, 2024 and 2023 was $ 247 , $ 245 and $ 295 , respectively. Aggregate amortization expense related to acquired intangible assets for future years is as follows: Year Amount 2026 $ 248 2027 246 2028 246 2029 244 2030 238 Thereafter 862 The Company excluded from the above table intangible assets of $ 56 of indefinite-lived trademarks and trade names, which were not subject to amortization. 87 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) (13) Product Warranties The Company provides for the estimated costs to fulfill customer warranty obligations upon the recognition of the related revenue. The Company’s warranty obligations are affected by shipment volume, product failure rates, utilization levels, material usage and supplier warranties on parts delivered to the Company. Should actual product failure rates, utilization levels, material usage, or supplier warranties on parts differ from the Company’s estimates, revisions to the estimated warranty liability would be required. The Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers. Product warranty activities were as follows: Years Ended December 31, 2025 2024 Beginning of period $ 22 $ 22 Provision for product warranties 26 24 Charges to warranty liability ( 23 ) ( 24 ) End of period $ 25 $ 22 Short-term product warranties of $ 19 and long-term product warranties of $ 6 , each as of December 31, 2025, are included within other current liabilities and other non-current liabilities, respectively, within the accompanying consolidated balance sheets. Short-term product warranties of $ 14 and long-term product warranties of $ 8 , each as of December 31, 2024 , are included within other current liabilities and other non-current liabilities, respectively, within the accompanying consolidated balance sheets. (14) Debt The Company’s outstanding debt is as follows: December 31, 2025 December 31, 2024 Short-term debt: Term Loan Facility $ 51 $ 50 Long-term debt: Term Loan Facility $ 2,827 $ 3,199 Debt issuance costs - Term Loan Facility ( 55 ) ( 85 ) Term Loan Facility, net 2,772 3,114 Convertible Notes 1,400 1,400 Debt issuance costs - Convertible Notes ( 22 ) ( 26 ) Convertible Notes, net 1,378 1,374 Total long-term debt, net $ 4,150 $ 4,488 88 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Credit Facilities In connection with the completion of the Atotech Acquisition, on August 17, 2022 (the “Effective Date”) the Company entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, Barclays Bank PLC, and the lenders from time to time party thereto (the “Credit Agreement”). The Credit Agreement initially provided for (i) a senior secured term loan facility comprised of three tranches: a $ 1,000 loan (as further refinanced and otherwise modified as described herein, the “USD Tranche A”), a $ 3,600 loan (as further refinanced and otherwise modified as described herein, the “USD Tranche B”) and a € 600 loan (as further refinanced and otherwise modified as described herein, the “Euro Tranche B” and together with the USD Tranche A and the USD Tranche B, the “Term Loan Facility”), each of which were borrowed in full on the Effective Date, and (ii) a senior secured revolving credit facility of $ 500 (as further increased and otherwise modified as described herein, the “Revolving Facility” and, together with the Term Loan Facility, the “Credit Facilities”), with the commitments under each of the foregoing facilities subject to increase from time to time subject to certain conditions. The proceeds of the Term Loan Facility were used on the Effective Date, among other things, to fund a portion of the consideration payable in connection with the Atotech Acquisition and to refinance the existing term loan and revolving credit facilities of the Company and certain indebtedness of Atotech. The Company has entered into six amendments to the Credit Agreement since the Effective Date (as amended, the “Amended Credit Agreement”), including most recently the Sixth Amendment (as defined below). For more information, see Note 23 to the Notes to Consolidated Financial Statements. As of December 31, 2025 , after giving effect to all amendments and repayments prior to such date, the Amended Credit Agreement provided for (i) the Term Loan Facility comprised of two tranches: the USD Tranche B in an outstanding principal amount of $ 2,188 and the Euro Tranche B in an outstanding principal amount of € 587 and (ii) the Revolving Facility with aggregate commitments of $ 675 . As of December 31, 2025 , borrowings under the Credit Facilities bore interest at a rate per annum equal to, at the Company’s option, any of the following, plus, in each case, an applicable margin: (a) with respect to the Revolving Facility and the USD Tranche B, (x) a base rate determined by reference to the highest of (1) the federal funds effective rate plus 0.50 %, (2) the prime rate quoted in The Wall Street Journal, or (3) a forward-looking term rate based on Term SOFR (plus, with respect to the Revolving Facility, an applicable credit spread adjustment) for an interest period of one month, plus 1.00 %; and (y) a Term SOFR rate (plus, with respect to the Revolving Facility, an applicable credit spread adjustment) for the interest period relevant to such borrowing, subject to a rate floor of (I) with respect to the USD Tranche B, 0.50 % and (II) with respect to the Revolving Facility, 0.0 %; and (b) with respect to the Euro Tranche B, a Euro Interbank Offered Rate (“EURIBOR”) rate determined by reference to the costs of funds for Euro deposits for the interest period relevant to such borrowing adjusted for certain additional costs, subject to a EURIBOR rate floor of 0.0 %. As of December 31, 2025 , the applicable margins for borrowings under the Credit Facilities were (i) under the USD Tranche B, 1.00 % with respect to base rate borrowings and 2.00 % with respect to Term SOFR borrowings, (ii) under the Euro Tranche B, 2.50 % and (iii) under the Revolving Facility, 1.50 % with respect to base rate borrowings and 2.50 % with respect to Term SOFR borrowings. In addition to paying interest on outstanding principal under the Credit Facilities, the Company is required to pay a commitment fee in respect of the unutilized commitments under the Revolving Facility. The commitment fee is subject to adjustment based on the Company’s first lien net leverage ratio as of the end of the preceding fiscal quarter. The Company must also pay customary letter of credit fees and agency fees. As of December 31, 2025 , the commitment fee was 0.25 % per annum. On January 24, 2025, the Company entered into the Fifth Amendment to Credit Agreement (the “Fifth Amendment”), pursuant to which the Company (i) refinanced its existing USD Tranche B loan and Euro Tranche B loan with a new $ 2,529 USD Tranche B loan and a new € 596 Euro Tranche B loan, (ii) decreased the applicable margin for the USD Tranche B from 2.25 % to 2.00 % with respect to Term SOFR borrowings and from 1.25 % to 1.00 % with respect to base rate borrowings and (iii) decreased the applicable margin for the Euro Tranche B from 2.75 % to 2.50 %. The repriced USD Tranche B loan and Euro Tranche B loan were issued without original issue discount. In connection with the execution of the Fifth Amendment, the Company paid customary fees and expenses to JPMorgan Chase Bank, N.A. On January 24, 2025, concurrently with the effectiveness of the Fifth Amendment, the Company made a voluntary prepayment of $ 100 principal amount to the USD Tranche B loan. On each of June 27, 2025, August 1, 2025 and October 29, 2025, the Company made an additional voluntary prepayment of $ 100 principal amount to the USD Tranche B loan. 89 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Under the Amended Credit Agreement, the Company is required to prepay outstanding term loans, subject to certain exceptions, with portions of its annual excess cash flow as well as with the net cash proceeds of certain of its asset sales, certain casualty and condemnation events and the incurrence or issuances of certain debt. If at any time the aggregate amount of outstanding loans, unreimbursed letter of credit drawings and undrawn letters of credit under the Revolving Facility exceeds the aggregate commitments under the Revolving Facility, the Company is required to repay outstanding loans and/or cash collateralize letters of credit, with no reduction of the commitment amount. The Company may voluntarily prepay outstanding loans under the Credit Facilities from time to time, subject to certain conditions, without premium or penalty other than customary “breakage” costs with respect to Term SOFR or EURIBOR loans; provided, however, that subject to certain exceptions, if on or prior to the date that is six months after the Fifth Amendment Effective Date, the Company prepays any loans under the USD Tranche B or the Euro Tranche B in connection with a repricing transaction, the Company must pay a prepayment premium of 1.00 % of the aggregate principal amount of the loans so prepaid. Additionally, the Company may voluntarily reduce the unutilized portion of the commitment amount under the Revolving Facility. As of December 31, 2025, the Company was required to make scheduled quarterly payments each equal to approximately $ 10 with respect to the USD Tranche B and approximately € 2 with respect to the Euro Tranche B, in each case with the balance due thereunder on the maturity date of the Term Loan Facility. There is no scheduled amortization under the Revolving Facility. Any principal amount outstanding under the Revolving Facility is due and payable in full on the maturity date of the Revolving Facility. All obligations under the Credit Facilities are guaranteed by certain of the Company’s wholly-owned domestic subsidiaries and are required to be guaranteed by certain of the Company’s future wholly-owned domestic subsidiaries, and are secured by substantially all of the Company’s assets and the assets of such subsidiaries, subject to certain exceptions and exclusions. The USD Tranche B and the Euro Tranche B are not subject to financial maintenance covenants. The Amended Credit Agreement contains customary representations and warranties, covenants and provisions relating to events of default. If an event of default occurs, the lenders under the Credit Facilities will be entitled to take various actions, including the acceleration of amounts due under the Credit Facilities and all actions permitted to be taken by a secured creditor. As of December 31, 2025, the Company was in compliance with all covenants under the Amended Credit Agreement. As of December 31, 2025 , the weighted average interest rate of the Term Loan Facility was 5.4 %. As of December 31, 2025, the Revolving Facility had a maturity date in August 2027 while the Term Loan Facility had a maturity date in August 2029. As of December 31, 2025 , there were no borrowings under the Revolving Facility. Convertible Notes On May 16, 2024, the Company completed a private offering of $ 1,400 aggregate principal amount of its convertible senior notes due 2030 (the “Convertible Notes”). The net proceeds from the offering were approximately $ 1,374 after deducting the initial purchasers’ discounts and commissions and estimated offering expenses paid by the Company. The Company used approximately $ 167 of the net proceeds from the offering to pay the cost of the capped call transactions described below. The Company used the remaining net proceeds from the offering to repay approximately $ 1,206 in borrowings outstanding under the USD Tranche B, together with accrued interest, as well as for general corporate purposes. As a result of the repayment, the Company recorded a $ 38 loss on extinguishment of debt in the three months ended June 30, 2024. Indenture and the Convertible Notes On May 16, 2024, the Company entered into an indenture (the “Indenture”) with respect to the Convertible Notes with U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). Under the Indenture, the Convertible Notes are senior unsecured obligations of the Company and bear interest at a coupon rate of 1.25 % per annum, with interest payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2024. The Convertible Notes will mature on June 1, 2030 , unless earlier converted, redeemed or repurchased in accordance with their terms. 90 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Subject to certain conditions, on or after June 5, 2027, the Company may redeem for cash all or any portion of the Convertible Notes at a redemption price equal to 100 % of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the trading day immediately preceding the date the notice of redemption is sent. The conversion rate for the Convertible Notes is initially 6.4799 shares of the Company’s common stock per one thousand dollars principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $ 154.32 per share. The conversion rate is subject to adjustment upon the occurrence of certain events. Upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted. Prior to the close of business on the business day immediately preceding March 1, 2030, noteholders may convert all or any portion of their Convertible Notes under the following circumstances: • during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ended September 30, 2024, if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the applicable conversion price of the Convertible Notes on each applicable trading day (approximately $ 200.62 per share based on an initial conversion price of approximately $ 154.32 per share, which is subject to adjustment upon the occurrence of certain events); • during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $ 1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on each such trading day; • if the Company calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or • upon the occurrence of specified corporate events as specified in the Indenture. On or after March 1, 2030, until the close of business on the second scheduled trading day immediately preceding the maturity date, noteholders may convert all or any portion of their Convertible Notes at any time. If the Company undergoes a fundamental change (as defined in the Indenture) prior to the maturity date of the Convertible Notes, holders may require the Company to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the Convertible Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Indenture contains customary terms and covenants, including that upon certain events of default that are occurring and continuing, either the Trustee or the holders of at least 25 % in aggregate principal amount of the outstanding Convertible Notes may declare 100 % of the principal of, and accrued and unpaid interest, if any, on, all the Convertible Notes to be due and payable. As of December 31, 2025, the Convertible Notes were classified as a long-term liability, net of issuances costs, on the consolidated balance sheet. The Convertible Notes were issued at par and costs associated with the issuance of the Convertible Notes are amortized to interest expense over the contractual term of the Convertible Notes. There were no conversions of the Convertible Notes in 2025 and 2024. As of December 31, 2025 , the effective interest rate of the Convertible Notes was 1.56 %. 91 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Capped Call Transactions On May 13, 2024, in connection with the pricing of the Convertible Notes, and on May 14, 2024, in connection with the exercise in full by the initial purchasers of their option to purchase additional Convertible Notes, the Company entered into privately negotiated capped call transactions with certain of the initial purchasers of the Convertible Notes or their respective affiliates and other financial institutions. The capped call transactions are expected generally to reduce the potential dilution to the Company’s common stock upon conversion of any Convertible Notes and/or offset any cash payments that the Company is required to make in excess of the principal amount of any converted Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap initially equal to $ 237.42 per share, which represents a premium of 100 % over the last reported sale price of $ 118.71 per share of the Company’s common stock on The Nasdaq Global Select Market on May 13, 2024, and is subject to customary adjustments under the terms of the capped call transactions. The Company evaluated the capped call transactions and determined that they should be accounted for separately from the Convertible Notes. The cost of $ 167 to purchase the capped call transactions was recorded as a reduction to additional paid-in capital in the consolidated balance sheet as the capped call transactions are indexed to the Company’s own stock and met the criteria to be classified in stockholders' equity. The Company’s interest expense is as follows: Years Ended December 31, 2025 2024 2023 Term Loan Facility: Contractual interest expense $ 186 $ 302 $ 391 Amortization of debt issuance costs as interest expense 22 26 31 Total interest expense on Term Loan Facility $ 208 $ 328 $ 422 Convertible Notes: Contractual interest expense $ 18 $ 11 $ — Amortization of debt issuance costs as interest expense 3 3 — Total interest expense on Convertible Notes $ 21 $ 14 $ — Other interest (income) expense, net (1) $ ( 17 ) $ ( 58 ) $ ( 66 ) Total interest expense $ 212 $ 284 $ 356 (1) Other interest (income) expense, net primarily consists of interest (income) expense related to the Company’s interest rate swap and interest rate cap agreements. Lines of Credit and Borrowing Arrangements Certain of the Company’s Japanese subsidiaries have lines of credit and a financing facility with various financial institutions, many of which generally expire and are renewed at three-month intervals with the remaining having no expiration date. The lines of credit and financing facility provided for aggregate borrowings as of December 31, 2025 and December 31, 2024 of up to an equivalent of $ 13 and $ 19 , respectively. There were no borrowings outstanding under these arrangements at December 31, 2025 or December 31, 2024. Contractual maturities of the Company’s debt obligations as of December 31, 2025 are as follows: Year Amount 2026 $ 51 2027 51 2028 51 2029 2,725 2030 1,400 92 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) (15) Other Current Liabilities Other current liabilities consisted of the following: December 31, 2025 December 31, 2024 Accrued compensation and other employee-related obligations $ 199 $ 124 Deferred revenue and customer advances 79 71 Income taxes payable 48 64 Accrued expenses 78 62 Other 65 63 Total other current liabilities $ 469 $ 384 (16) Income Taxes The components of income (loss) before income taxes and the related provision (benefit) for income taxes consist of the following: Years Ended December 31, 2025 2024 2023 Income (loss) before income taxes: United States $ 77 $ ( 57 ) $ ( 760 ) Foreign 227 237 ( 1,168 ) $ 304 $ 180 $ ( 1,928 ) Current provision (benefit) for income taxes: Federal $ 101 $ 91 $ 21 State ( 11 ) 13 6 Foreign 115 112 120 205 216 147 Deferred provision (benefit) for income taxes: Federal ( 92 ) ( 106 ) ( 130 ) State 17 ( 20 ) ( 18 ) Foreign ( 121 ) ( 100 ) ( 86 ) ( 196 ) ( 226 ) ( 234 ) Provision (benefit) for income taxes $ 9 $ ( 10 ) $ ( 87 ) The following table is a reconciliation of the Company’s effective tax rate to the U.S. federal statutory income tax rate for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09: Amount Rate U.S. federal statutory income tax rate $ 64 21.0 % State and local income taxes, net of federal income tax effect (1) ( 4 ) ( 1.2 ) Foreign tax effects China Intercompany royalty 10 3.2 Withholding taxes 25 8.4 Audit settlement related to intercompany transactions 25 8.3 Other 1 0.2 Germany Effect of changes in tax laws or rates enacted in the current period ( 4 ) ( 1.2 ) Other ( 3 ) ( 0.8 ) Hong Kong Other ( 4 ) ( 1.3 ) Israel 93 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Statutory tax rate difference between Israel and United States ( 9 ) ( 3.1 ) Other 1 0.4 South Korea Withholding taxes 8 2.5 Other — 0.1 Netherlands Changes in valuation allowances ( 73 ) ( 23.9 ) Realized foreign exchange gain (loss) 10 3.2 Other 8 2.5 Taiwan Withholding taxes 13 4.4 Other foreign jurisdictions 12 3.9 Effect of cross-border tax laws Base erosion and anti-abuse tax related waiver of deductions 12 3.8 Foreign-derived intangible income ( 44 ) ( 14.6 ) Subpart F, net of foreign tax credits 8 2.5 Other ( 1 ) ( 0.2 ) Tax credits Research and development tax credits ( 16 ) ( 5.2 ) Foreign tax credit related to withholding taxes ( 43 ) ( 14.3 ) Nontaxable or nondeductible items Stock-based compensation 6 2.0 Other 1 0.2 Changes in unrecognized tax benefits 10 3.1 Other adjustments Other ( 4 ) ( 1.0 ) Effective tax rate $ 9 2.9 % (1) State taxes in California, Oregon, and Massachusetts made up the majority (greater than 50 percent) of the tax effect in this category. The Company adopted ASU 2023-09 on a prospective basis effective January 1, 2025. Prior period information has not been restated and is presented under the disclosure requirements in effect during those periods. The following table is a reconciliation of the Company’s effective tax rate to the U.S. federal statutory income tax rate for the years ended December 31, 2024 and December 31, 2023 in accordance with the guidance prior to the adoption of ASU 2023-09: 94 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Years Ended December 31, 2024 2023 U.S. federal statutory income tax rate 21.0 % 21.0 % Foreign-derived intangible income ( 24.9 ) 0.6 Changes in valuation allowances ( 22.7 ) 0.1 Withholding taxes, net of foreign tax credits 15.4 ( 0.4 ) Federal tax credits ( 11.7 ) 1.5 Effect of foreign operations taxed at various rates ( 8.9 ) 0.9 Change in income tax reserves (including interest) 6.7 ( 0.5 ) Base erosion waiver of deductions 5.6 — State income taxes, net of federal benefit ( 3.0 ) 0.5 Executive compensation 1.8 ( 0.1 ) Foreign subpart F income taxed in the U.S., net of foreign tax credits 1.6 — Global intangible low taxed income, net of foreign tax credits 1.0 0.2 Goodwill impairment — ( 18.4 ) Other 12.4 ( 0.9 ) Effective tax rate ( 5.7 )% 4.5 % The significant components of the deferred tax assets and deferred tax liabilities are as follows: December 31, 2025 2024 Deferred tax assets: Interest expense carryforwards $ 155 $ 178 Net operating loss carryforwards 68 71 Tax credit carryforwards 33 34 Capitalized research and development 188 146 Lease liability 52 49 Depreciation and amortization 22 — Inventory and warranty reserves 53 48 Accrued expenses and other reserves 39 30 Other 13 9 Total deferred tax assets 623 565 Valuation allowance ( 79 ) ( 151 ) Net deferred tax assets $ 544 $ 414 Deferred tax liabilities: Acquired intangible assets and goodwill $ ( 519 ) $ ( 558 ) Right-of-use asset ( 50 ) ( 48 ) Foreign withholding taxes ( 37 ) ( 40 ) Loan costs ( 3 ) ( 9 ) Depreciation and amortization — ( 4 ) Total deferred tax liabilities ( 609 ) ( 659 ) Net deferred tax liabilities $ ( 65 ) $ ( 245 ) On a quarterly basis, the Company evaluates both positive and negative evidence that affects the realizability of its net deferred tax assets and assesses the need for a valuation allowance. The future benefit to be derived from its deferred tax assets is dependent upon its ability to generate sufficient future taxable income to realize the assets. During 2025, the Company decreased its valuation allowance by $ 72 , primarily related to certain foreign interest and net operating loss carryforwards. During 2024, the Company decreased its valuation allowance by $ 39 , primarily related to certain foreign interest and net operating loss carryforwards. Deferred taxes have been recorded related to historical outside basis differences, primarily unremitted earnings, of certain of the Company’s foreign subsidiaries. During 2025, the Company recorded a tax benefit of $ 4 related to such taxes. 95 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) As of December 31, 2025, the Company had U.S. federal and state as well as foreign gross research and other tax credit carryforwards of $ 29 , $ 40 and $ 0 , respectively, which are presented gross of unrecognized tax benefits. Included in the total tax credit carryforwards as of December 31, 2025 are $ 1 of federal and $ 16 of state tax credits that can be carried forward indefinitely while the remaining tax credits expire at various dates through 2040 . As of December 31, 2025, the Company also had U.S. federal and state as well as foreign net operating loss and capital loss carryforwards of $ 2 , $ 3 and $ 263 , respectively. Included in the total loss carryforwards are $ 2 , $ 0 and $ 263 of losses from federal, state and foreign that can be carried forward indefinitely while the remaining losses expire at various dates through 2044 . The Company had $ 280 and $ 377 of U.S. federal and foreign interest carryforwards, respectively, that can be carried forward indefinitely. Although the Company believes that its tax positions are consistent with applicable U.S. federal, state and international laws, it maintains certain income tax reserves as of December 31, 2025 in the event its tax positions were to be challenged by the applicable tax authority and additional tax assessed upon audit. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties, is as follows: Years Ended December 31, 2025 2024 2023 Balance at beginning of year $ 94 $ 86 $ 83 (Decreases) increases for tax positions taken during prior years — ( 4 ) ( 5 ) Increases for tax positions taken during the current year 34 36 12 Reductions related to expiration of statutes of limitations and audit settlements ( 33 ) ( 24 ) ( 4 ) Balance at end of year $ 95 $ 94 $ 86 The net increase in gross unrecognized tax benefits in 2025 was primarily due to the addition of income tax reserves related to intercompany transactions offset by a decrease related to audit settlements. The Company accrues interest and, if applicable, penalties for any uncertain tax positions. Interest and penalties are classified as a component of income tax provision (benefit). As of December 31, 2025, 2024 and 2023, the Company accrued interest on unrecognized tax benefits of approximately $ 10 , $ 8 and $ 7 , respectively. The Company is subject to examination by U.S. federal and state as well as foreign tax authorities. The U.S. federal statute of limitations remains open for tax years 2020 through the present. The Company is under U.S. federal audit by the Internal Revenue Service for the years ended December 31, 2020, 2021 and 2022, and does not expect and is not aware of any unrecorded material adjustments. The statute of limitations for the Company’s tax filings in other jurisdictions varies between fiscal years 2020 through present. The Company also has certain prior year federal credit carryforwards and state tax loss and credit carryforwards that are subject to examination to the extent used in an open year. 96 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) The components of cash paid (net of refunds received) for income taxes as of December 31, 2025 are as follows: Amount Federal taxes United States $ ( 4 ) State taxes Other state jurisdictions 7 Foreign taxes Canada 11 China 84 Germany 12 South Korea 13 Netherlands 11 Taiwan 9 Other foreign jurisdictions 35 Total cash taxes paid $ 178 Cash paid (net of refunds received) for income taxes as of December 31, 2024 and 2023 were $ 145 and $ 180 , respectively. (17) Stock-Based Compensation Employee Stock Purchase Plans The 2014 ESPP was adopted by the Board of Directors on February 10, 2014 and approved by the Company’s stockholders on May 5, 2014. The 2014 ESPP authorizes the issuance of up to an aggregate of 2.5 shares of common stock to participating employees. Offerings under the 2014 ESPP commence on June 1 and December 1 and terminate on November 30 and May 31, respectively. Under the 2014 ESPP, eligible employees can purchase shares of common stock through payroll deductions up to 10 % of their compensation, up to a defined maximum annual amount. The price at which an employee’s purchase option is exercised for each offering period is the lower of (1) 90 % of the closing price of the common stock on the Nasdaq Global Select Market on the day that the offering commences, or (2) 90 % of the closing price of the common stock on the day that the offering terminates. The Company issued 0.1 shares of common stock during each of 2025, 2024 and 2023 to employees who participated in the 2014 ESPP at exercise prices of $ 74.24 and $ 73.97 per share in 2025, $ 102.28 and $ 75.77 per share in 2024, and $ 74.95 and $ 74.30 per share in 2023. The Company recorded an immaterial amount of compensation expense related to the 2014 ESPP in 2025, 2024 and 2023. As of December 31, 2025, there were 1.2 shares reserved for future issuance under the 2014 ESPP. Equity Incentive Plans The Company grants RSUs to employees and directors under the 2022 Stock Incentive Plan (the “Plan”). The Plan is administered by the Compensation Committee of the Company's Board of Directors. The Plan is intended to attract and retain employees and directors, and to provide an incentive for these individuals to assist the Company to achieve long-range performance goals and enable these individuals to participate in the long-term growth of the Company. Up to 6.6 shares of common stock (subject to adjustment in the event of stock splits and other similar events) may be issued pursuant to awards granted under the Plan. The Company may grant options, RSUs, restricted stock, stock appreciation rights (“SARs”) and other stock-based awards to employees, officers, directors, consultants and advisors under the Plan. Any full-value awards granted under the Plan will be counted against the shares reserved for issuance under the Plan as 1.91 shares for each share of common stock subject to such award. Any award granted under the 2022 Plan that is not a full-value award (including, without limitation, any option or SAR) will be counted against the shares reserved for issuance under the plan on a one-for-one basis of common stock subject to such award. “Full-value award” means any restricted stock, RSUs, or other stock-based award with a per share price or per unit purchase price lower than 100 % of fair market value on the date of grant. To the extent an award that is not a full-value award is returned to the Plan, the share reserve under the Plan will be credited with one share. To the extent that a full-value award is returned to the Plan, the share reserve under the Plan will be credited with 1.91 shares. As of December 31, 2025, there were 2.6 shares reserved for future issuance under the Plan. 97 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) The following tables present the activity for the RSUs: Year Ended December 31, 2025 Quantity Weighted Average Grant Date Fair Value Per Share Beginning of period 0.9 $ 104.83 Granted 0.7 $ 77.37 Vested or forfeited ( 0.5 ) $ 101.64 End of period 1.1 $ 88.87 Year Ended December 31, 2024 Quantity Weighted Average Grant Date Fair Value Per Share Beginning of period 1.0 $ 98.36 Granted 0.5 $ 121.24 Vested or forfeited ( 0.6 ) $ 106.42 End of period 0.9 $ 104.83 Year Ended December 31, 2023 Quantity Weighted Average Grant Date Fair Value Per Share Beginning of period 0.8 $ 118.96 Granted 0.7 $ 87.03 Vested or forfeited ( 0.5 ) $ 117.10 End of period 1.0 $ 98.36 The total fair value of RSUs vested during 2025, 2024 and 2023 was approximately $ 48 , $ 66 and $ 40 , respectively. As of December 31, 2025, the unrecognized compensation cost related to RSUs was approximately $ 45 and will be recognized over an estimated weighted average amortization period of 1 year. Stock-Based Compensation Expense The Company recognized the full impact of its share-based payment plans in the consolidated statements of operations and comprehensive income (loss). The following table reflects the effect of recording stock-based compensation: Years Ended December 31, 2025 2024 2023 Stock-based compensation expense by type of award: RSUs $ 51 $ 46 $ 51 Employee stock purchase plan 4 2 3 Total stock-based compensation 55 48 54 Shortfall/(excess tax benefit) from stock-based compensation 4 ( 5 ) 2 Net effect on net income (loss) $ 59 $ 43 $ 56 Effect on net earnings (loss) per share: Basic $ 0.88 $ 0.64 $ 0.84 Diluted $ 0.87 $ 0.64 $ 0.84 98 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) The pre-tax effect of stock-based compensation expense included in the Company’s consolidated statements of operations and comprehensive income (loss) was as follows: Years Ended December 31, 2025 2024 2023 Cost of revenues $ 6 $ 6 $ 6 Research and development expense 7 7 7 Selling, general and administrative expense 42 35 41 Total pre-tax stock-based compensation expense $ 55 $ 48 $ 54 (18) Stockholders’ Equity Share Repurchase Program On July 25, 2011, the Company’s Board of Directors approved a share repurchase program for the repurchase of up to an aggregate of $ 200 of its outstanding common stock from time to time in open market purchases, privately negotiated transactions or through other appropriate means. The timing and quantity of any shares repurchased will depend upon a variety of factors, including business conditions, stock market conditions and business development activities, including, but not limited to, merger and acquisition opportunities. These repurchases may be commenced, suspended or discontinued at any time without prior notice. Any repurchased shares are held by the Company as authorized but unissued shares. During 2025 , the Company repurchased approximately 0.5 shares of its common stock for total consideration of $ 45 . During 2024 and 2023 , there were no repurchases of common stock. The Company has repurchased approximately 3.1 shares of common stock for approximately $ 172 pursuant to the program since its adoption. Cash Dividends Holders of the Company’s common stock are entitled to receive dividends when and if they are declared by the Company’s Board of Directors. The Company’s Board of Directors declared a cash dividend of $ 0.22 per share during each quarter of 2025, which totaled $ 59 or $ 0.88 per share. The Company’s Board of Directors declared a cash dividend of $ 0.22 per share during each quarter of 2024, which totaled $ 59 or $ 0.88 per share. On February 9, 2026 , the Company’s Board of Directors declared a quarterly cash dividend of $ 0.25 per share to be paid on March 6, 2026 to stockholders of record as of February 23, 2026 . Future dividend declarations, if any, as well as the record and payment dates for such dividends, are subject to the final determination of the Company’s Board of Directors. Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) by component, net of tax in the aggregate of $ 7 , $( 7 ) and $( 32 ) as of December 31, 2025, 2024, and 2023, respectively, were as follows: 99 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Changes in value of financial instruments designated as cash flow hedges Foreign currency translation adjustments Change in net investment hedge Unrecognized pension gain (loss) Unrealized (loss) gain on investments Total Balance at December 31, 2022 $ 55 $ 4 $ — $ 10 $ — $ 69 Other comprehensive income (loss) before reclassifications 28 ( 83 ) ( 25 ) ( 9 ) ( 23 ) ( 112 ) Amounts reclassified out of AOCI ( 52 ) — — — — ( 52 ) Net other comprehensive income (loss) ( 24 ) ( 83 ) ( 25 ) ( 9 ) ( 23 ) ( 164 ) Balance at December 31, 2023 31 ( 79 ) ( 25 ) — ( 23 ) ( 96 ) Other comprehensive income (loss) before reclassifications 66 ( 213 ) 36 3 — ( 108 ) Amounts reclassified out of AOCI ( 67 ) — — — 23 ( 44 ) Net other comprehensive income (loss) ( 1 ) ( 213 ) 36 3 23 ( 152 ) Balance at December 31, 2024 30 ( 292 ) 11 3 — ( 248 ) Other comprehensive income (loss) before reclassifications ( 5 ) 238 ( 63 ) 10 — 180 Amounts reclassified out of AOCI ( 24 ) ( 1 ) — — — ( 25 ) Net other comprehensive income (loss) ( 29 ) 237 ( 63 ) 10 — 155 Balance at December 31, 2025 $ 1 $ ( 55 ) $ ( 52 ) $ 13 $ — $ ( 93 ) (19) Employee Benefit Plans The Company has a 401(k) profit-sharing plan for U.S. employees meeting certain requirements, in which eligible employees may contribute between 1 % and 50 % of their annual compensation to this plan, and, with respect to employees who are age 50 and older, certain specified additional amounts, limited by an annual maximum amount determined by the Internal Revenue Service. The Company, at its discretion, makes certain matching contributions to this plan based on participating employees’ annual contribution to this plan and their total compensation. The Company’s contributions were $ 10 , $ 9 and $ 9 for 2025, 2024 and 2023, respectively. The Company also has a number of defined contribution plans at some of its foreign locations. The Company’s contributions were immaterial for 2025, 2024 and 2023. The Company maintains a management incentive bonus plan (“MIP”) which provides cash awards to certain employees, at the discretion of the Compensation Committee of the Company’s Board of Directors, based upon certain metrics tied to the Company’s consolidated financial results. In addition, certain of the Company’s foreign locations also have bonus programs, which in 2025 and 2024 were generally based upon the same consolidated financial results as the MIP. In 2023, some of these foreign locations based certain bonus programs upon local operating results and employee performance. The Company may also grant certain sign-on, retention, and spot bonuses when applicable. The total bonus expense was $ 103 , $ 38 and $ 63 for 2025, 2024 and 2023, respectively. Defined Benefit Pension Plans. The Company has a number of defined benefit pension plans at many of its foreign locations covering some employees at these respective locations. The majority of these defined benefit plans are frozen and do not allow new employees to join the plans. One of the Company’s German pension plans is unfunded, as permitted under the plan and applicable laws. For financial reporting purposes, the Company obtained actuarial reports supporting the calculations of net periodic pension costs that used a number of actuarial assumptions, including a discount rate for plan obligations, an assumed rate of return on pension plan assets and an assumed rate of compensation increase for employees covered by the various plans. The Company reviewed these actuarial assumptions and concluded they were reasonable based upon management’s judgment, considering known trends and uncertainties. Actual results that differ from these assumptions would impact future expense recognition and the cash funding requirements of the Company’s pension plans. 100 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) The net periodic benefit costs for the defined benefit plans included the following components: Year Ended December 31, 2025 2024 Service cost $ 2 $ 2 Interest cost on projected benefit obligations 5 5 Expected return on plan assets ( 1 ) ( 1 ) $ 6 $ 6 The changes in projected benefit obligations and plan assets, as well as the ending balance sheet amounts for the Company’s defined benefit plans, were as follows: Year Ended December 31, 2025 2024 Change in projected benefit obligations: Projected benefit obligations, beginning of year $ 140 $ 154 Service cost 2 2 Interest cost 5 5 Actuarial (gain) loss ( 8 ) ( 5 ) Benefits paid ( 11 ) ( 7 ) Currency translation adjustments 14 ( 9 ) Projected benefit obligations, end of year $ 142 $ 140 Change in plan assets: Fair value of plan assets, beginning of year 32 34 Company contributions 1 1 Gain (loss) on plan assets 2 2 Benefits paid ( 5 ) ( 3 ) Currency translation adjustments 2 ( 2 ) Fair value of plan assets, end of year 32 32 Net underfunded status $ ( 110 ) $ ( 108 ) As of December 31, 2025, the estimated benefit payments for the Company’s defined benefit plans for the next 10 years were as follows: Estimated benefit payments 2026 $ 9 2027 9 2028 9 2029 9 2030 10 2031-2035 47 $ 93 The Company expects to contribute $ 1 to the plans during 2026. The weighted-average rates used to determine the net periodic benefit costs were as follows: December 31, 2025 December 31, 2024 Discount rate 3.8 % 3.3 % Rate of increase in salary levels 2.5 % 3.7 % Expected long-term rate of return on assets 3.0 % 3.0 % 101 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) In determining the expected long-term rate of return on plan assets, the Company considers the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes, and economic and other indicators of future performance. Plan assets were held in the following categories as a percentage of total plan assets: December 31, 2025 December 31, 2024 Amount Percentage Amount Percentage Debt securities $ 19 60 % $ 17 54 % Equity securities 6 20 8 25 Cash 4 12 3 10 Other 3 8 4 11 $ 32 100 % $ 32 100 % In general, the Company’s asset management objectives include maintaining an adequate level of diversification to reduce interest rate and market risk, while providing adequate liquidity to meet immediate and future benefit payment requirements. The Company’s Israeli plans account for the deferred vested benefits using the shut-down method of accounting, which resulted in assets of $ 27 and vested benefit obligations of $ 29 as of December 31, 2025 and assets of $ 22 and vested benefit obligations of $ 24 as of December 31, 2024. Under the shut-down method, the liability is calculated as if it were payable as of the balance sheet date, on an undiscounted basis. Other Pension-Related Assets As of December 31, 2025 and 2024, the Company had assets with an aggregate market value of $ 6 for each period, for one of its German pension plans. These assets are invested in group insurance contracts through the insurance companies administering these plans, in accordance with applicable pension laws. These group insurance contracts have a guaranteed minimum rate of return ranging from 2.25 % to 4.00 % in 2025 and 2024 , depending on the contract. Because these assets were not separate legal assets of the pension plan, they were not included in the Company’s plan assets shown above. However, the Company has designated such assets to pay pension benefits. Such assets are included in other assets in the accompanying consolidated balance sheet. (20) Business Segment, Geographic Area, Product Information and Significant Customer Information Reportable Segments and Products The Company’s Chief Operating Decision Maker (the “CODM”), which is the Company’s Chief Executive Officer , utilizes financial information to make decisions about allocating resources and assessing performance for the entire Company, which is used in the decision-making process to assess performance. The Company has a diverse base of customers across its three end markets, semiconductor, electronics and packaging, and specialty industrial. Segment gross margin is the primary measure used by the CODM to assess segment performance and allocate resources. Gross margin, among other measures, is utilized when making decisions about capital and personnel allocations across segments. The Company has three reporting segments, VSD, PSD and MSD as described below. VSD delivers foundational technology solutions for semiconductor manufacturing, electronics and packaging, and specialty industrial applications. VSD products are derived from the Company’s core competencies in vacuum technologies, including pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, electronic control technology, reactive gas generation and delivery, power generation and delivery, and fiber optic temperature and position sensing. PSD provides a broad range of instruments, components and subsystems to leading edge semiconductor manufacturing, electronics and packaging and specialty industrial applications. PSD products are derived from our core competencies in lasers, photonics, optics, precision motion control and vibration control. MSD develops leading process and manufacturing technologies for advanced surface modification, electroless and electrolytic plating, and surface finishing. Applying a comprehensive systems-and-solutions approach, MSD’s portfolio 102 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) includes chemistry, equipment and services for innovative and high-technology applications in the electronics and packaging and specialty industrial markets. The Company derives its segment results directly from the manner in which results are reported in its management reporting system. The accounting policies that the Company uses to derive reportable segment results are substantially the same as those used for external reporting purposes. The Company groups its product offerings by its reportable segments, VSD, PSD, and MSD. For each reportable segment, the Company also provides services relating to the maintenance and repair of its products, installation services and training. Unallocated corporate expenses represent those costs not specifically related to the operations of each segment and are managed separately at the corporate level and primarily relate to labor costs of global functions such as supply chain, quality control and operations. The following tables set forth the details of gross profit by reportable segment and the reconciliation to income (loss) before income taxes: Year Ended December 31, 2025 VSD PSD MSD Total Product $ 1,290 $ 872 $ 1,274 $ 3,436 Services 289 157 49 495 Revenues by segment 1,579 1,029 1,323 3,931 Total cost of revenues (exclusive of amortization shown separately below) (1) 894 582 607 2,083 Segment gross profit 685 447 716 1,848 Segment gross profit percentage 43.3 % 43.5 % 54.1 % 47.0 % Reconciliation to income before income taxes Operating expenses: Research and development 299 Selling, general and administrative 724 Restructuring and other 37 Fees and expenses related to amendments to the Term Loan Facility 2 Amortization of intangible assets 247 Unallocated corporate expenses 11 Income from operations 528 Interest income ( 14 ) Interest expense 212 Loss on extinguishment of debt 10 Other expense (income), net 16 Income before income taxes $ 304 103 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Year Ended December 31, 2024 VSD PSD MSD Total Product $ 1,144 $ 856 $ 1,124 $ 3,124 Services 240 165 57 462 Revenues by segment 1,384 1,021 1,181 3,586 Total cost of revenues (exclusive of amortization shown separately below) (1) 790 563 519 1,872 Segment gross profit 594 458 662 1,714 Segment gross profit percentage 42.9 % 44.9 % 56.1 % 47.8 % Reconciliation to income before income taxes Operating expenses: Research and development 271 Selling, general and administrative 674 Acquisition and integrated costs 9 Restructuring and other 6 Fees and expenses related to amendments to the Term Loan Facility 5 Amortization of intangible assets 245 Unallocated corporate expenses 6 Income from operations 498 Interest income ( 21 ) Interest expense 284 Loss on extinguishment of debt 57 Other (income) expense, net ( 2 ) Income before income taxes $ 180 Year Ended December 31, 2023 VSD PSD MSD Total Product $ 1,222 $ 824 $ 1,154 $ 3,200 Services 218 152 52 422 Revenues by segment 1,440 976 1,206 3,622 Total cost of revenues (exclusive of amortization shown separately below) (1) 827 552 586 1,965 Segment gross profit 613 424 620 1,657 Segment gross profit percentage 42.6 % 43.4 % 51.4 % 45.7 % Reconciliation to loss before income taxes Operating expenses: Research and development 288 Selling, general and administrative 675 Acquisition and integrated costs 16 Restructuring and other 20 Fees and expenses related to amendments to the Term Loan Facility 2 Amortization of intangible assets 295 Goodwill and intangible asset impairment 1,902 Gain on sale of long-lived assets ( 2 ) Unallocated corporate expenses 15 Loss from operations ( 1,554 ) Interest income ( 17 ) Interest expense 356 Loss on extinguishment of debt 8 Other expense (income), net 27 Loss before income taxes $ ( 1,928 ) 104 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) (1) The significant expense category and amount aligns with the segment-level information that is regularly provided to the CODM. The following table sets forth capital expenditures by reportable segment: Years Ended December 31, 2025 2024 2023 VSD $ 87 $ 36 $ 26 PSD 21 36 29 MSD 40 53 32 Total capital expenditures $ 148 $ 125 $ 87 The following table sets forth depreciation and amortization by reportable segment: Years Ended December 31, 2025 2024 2023 VSD $ 40 $ 44 $ 43 PSD 49 50 60 MSD 255 254 294 Total depreciation and amortization $ 344 $ 348 $ 397 The following table sets forth segment assets by reportable segment: Accounts receivable, net Inventories Total December 31, 2025 VSD $ 190 $ 475 $ 665 PSD 163 270 433 MSD 298 176 474 Total segment assets $ 651 $ 921 $ 1,572 Accounts receivable, net Inventories Total December 31, 2024 VSD $ 200 $ 488 $ 688 PSD 168 260 428 MSD 247 145 392 Total segment assets $ 615 $ 893 $ 1,508 The following table reconciles total segment assets to total assets: December 31, 2025 2024 Total segment assets $ 1,572 $ 1,508 Cash and cash equivalents 675 714 Other current assets 263 252 Property, plant and equipment, net 810 771 Right-of-use assets 270 238 Goodwill and intangible assets, net 4,714 4,751 Other assets 492 356 Total assets $ 8,796 $ 8,590 105 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Geographic Area Information about the Company’s operations by geographic area is presented in the tables below. Net revenues from unaffiliated customers are based on the shipped-to location of the end customer. I ntercompany sales between geographic areas are at tax transfer prices and have been eliminated from consolidated revenues. Years Ended December 31, 2025 2024 2023 Net revenues: United States $ 760 $ 804 $ 893 China 931 775 745 South Korea 440 358 359 Singapore 265 229 239 Taiwan 260 234 248 Japan 240 250 280 Other 1,035 936 858 $ 3,931 $ 3,586 $ 3,622 Long-lived assets include property, plant and equipment, net, right-of-use assets, net and certain other assets. December 31, 2025 2024 Long-lived assets: United States $ 354 $ 458 China 199 172 Germany 175 125 Other 435 349 $ 1,163 $ 1,104 The Company sells products and services to thousands of customers worldwide, in a wide range of end markets. The Company’s top ten customers accounted for 35 % , 32 % and 30 % of net revenues for 2025, 2024, and 2023 , respectively. (21) Restructuring The Company recorded $ 23 of restructuring charges in restructuring and other in 2025 primarily related to severance costs incurred as a result of a global cost saving initiative implemented during the first quarter of 2025, mainly in the general metal finishing business within MSD. The Company recorded $ 4 of restructuring charges in restructuring and other in 2024 primarily related to severance costs incurred as a result of a global cost-saving initiative implemented in the fourth quarter of 2023. The activity related to the Company’s restructuring accrual is shown below: Years Ended December 31, 2025 2024 Beginning of period $ 3 $ 9 Charged to expense 23 4 Payments and adjustments ( 20 ) ( 10 ) End of period $ 6 $ 3 (22) Commitments and Contingencies As of December 31, 2025 , the Company has entered into purchase commitments for certain inventory components and other equipment and services used in its normal operations. The majority of the purchase commitments covered by these arrangements are for periods of less than one year and aggregate to approximately $ 490 . 106 MKS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions, except per share data) Legal Proceedings The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s results of operations, financial condition or cash flows. (23) Subsequent Events 2026 Amendment and Prepayment of Credit Facilities On February 4, 2026 (the “Sixth Amendment Effective Date”), the Company entered into the Sixth Amendment to Credit Agreement (the “Sixth Amendment”). Pursuant to the Sixth Amendment, the Company (i) refinanced its existing USD Tranche B loan and Euro Tranche B loan with a new $ 914 USD Tranche B loan and a new € 587 Euro Tranche B loan, (ii) refinanced and increased the commitments under its existing Revolving Credit Facility with a new $ 1,000 Revolving Facility, (iii) decreased the applicable margin for the USD Tranche B from 2.00 % to 1.75 % with respect to Term SOFR borrowings and from 1.00 % to 0.75 % with respect to base rate borrowings, (iv) decreased the applicable margin for the Euro Tranche B from 2.50 % to 2.00 %, (v) decreased the applicable margin under the Revolving Facility from 2.50 % to 1.75 % with respect to SOFR borrowings and from 1.50 % to 0.75 % with respect to base rate borrowings, (vi) eliminated the credit spread adjustment applicable to SOFR borrowings of the Revolving Facility, (vii) extended the maturity of the Term Loan Facility to February 2033 and (viii) extended the maturity of the Revolving Facility to February 2031. Additionally, pursuant to the Sixth Amendment, the Company (a) extended the period during which a 1.00 % prepayment premium may be required if the Company prepays any loans under the USD Tranche B or the Euro Tranche B in connection with a repricing transaction until the date that is six months following the Sixth Amendment Effective Date, and (b) reduced the amount of scheduled quarterly principal payments the Company is required to make with respect to the USD Tranche B to approximately $ 2 . The repriced USD Tranche B loan and Euro Tranche B loan were issued without original issue discount. 2034 Notes On February 4, 2026, the Company completed a private offering (the “2034 Notes Offering”) of € 1,000 aggregate principal amount of 4.25 % senior notes due 2034 (the “2034 Notes”) with interest payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2026. The 2034 Notes were sold in a private placement to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act. The Company used the net proceeds from the 2034 Notes Offering, together with cash on hand, to prepay approximately $ 1,274 of the USD Tranche B. The 2034 Notes are unconditionally guaranteed, on a senior unsecured basis, jointly and severally, by the Company’s existing and future subsidiaries that guarantee the Credit Agreement or are required to become guarantors under certain circumstances and subject to certain exceptions (the “Guarantors”). The 2034 Notes and the guarantees are general senior unsecured obligations of the Company and the Guarantors. 107 Item 9. Changes in and Disagreements with Acco untants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s (“SEC”) rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2025, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to our management, including our Chief Executive Office and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of our Chief Executive Officer and Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: • Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures of the Company are being made only in accordance with authorization of our management and directors of the Company; and • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management including our Chief Executive Officer and Chief Financial Officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, we used the criteria set forth in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that, as of December 31, 2025, our internal control over financial reporting was effective. Our internal control over financial reporting as of December 31, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report, which appears in Item 8 of this Annual Report on Form 10-K. 108 Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Othe r Information For the three months ended December 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a trading arrangement for the sale or purchase of Company securities that is either (1) a contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or (2) a “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K). Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 109 PART III Item 10. Directors, Executive Of ficers and Corporate Governance The information required by this item will be set forth under the captions “Proposal One — Election of Directors,” “Directors,” “Corporate Governance,” “Executive Officers,” “Corporate Governance — Code of Business Conduct and Ethics” and “Corporate Governance — Board of Directors Meetings and Committees of the Board of Directors — Audit Committee” in our definitive proxy statement for the 2026 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission (“SEC”) no later than 120 days after the end of our fiscal year, and is incorporated herein by reference. We are also required under Item 405 of Regulation S-K to provide information concerning delinquent filers of reports under Section 16 of the Securities and Exchange Act of 1934, as amended. This information will be set forth under the caption “Delinquent Section 16(a) Reports,” if applicable, in our definitive proxy statement for the 2026 Annual Meeting of Stockholders, to be filed with the SEC no later than 120 days after the end of our fiscal year, and is incorporated herein by reference. Item 11. Executi ve Compensation The information required by this item will be set forth under the captions “Executive Officers,” “Executive Compensation – Compensation Discussion and Analysis,” “Corporate Governance – Board of Director Meetings and Committees of the Board of Directors – Compensation Committee - Compensation Committee Interlocks and Insider Participation,” “Compensation Committee Report” and “Director Compensation” in our definitive proxy statement for the 2026 Annual Meeting of Stockholders, to be filed with the SEC no later than 120 days after the end of our fiscal year, and, other than the information required by Item 402(v) of Regulation S-K, is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Ow ners and Management and Related Stockholder Matters The information required by Item 403 of Regulation S-K will be set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” in our definitive proxy statement for the 2026 Annual Meeting of Stockholders, to be filed with the SEC no later than 120 days after the end of our fiscal year, and is incorporated herein by reference. The information required by Item 201(d) of Regulation S-K will be set forth under the caption “Equity Compensation Plan Information” in our definitive proxy statement for the 2026 Annual Meeting of Stockholders, to be filed with the SEC no later than 120 days after the end of our fiscal year, and is incorporated herein by reference. Item 13. Certain Relationships and Relate d Transactions and Director Independence The information required by this item will be set forth under the captions “Corporate Governance – Board Independence” and “Corporate Governance – Transactions with Related Persons” in our definitive proxy statement for the 2026 Annual Meeting of Stockholders, to be filed with the SEC no later than 120 days after the end of our fiscal year, and is incorporated herein by reference. Item 14. Principal Accou ntant Fees and Services The information required by this item will be set forth under the caption “Audit and Financial Accounting Oversight — Principal Accountant Fees and Services” in our definitive proxy statement for the 2026 Annual Meeting of Stockholders, to be filed with the SEC no later than 120 days after the end of our fiscal year, and is incorporated herein by reference. 110 PART IV Item 15. Exhibits and Fina ncial Statement Schedules (a) The following documents are filed as a part of this Annual Report on Form 10-K: 1. Financial Statements . The following Consolidated Financial Statements are included under Item 8 of this Annual Report on Form 10-K. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Financial Statements: Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 63 Consolidated Balance Sheets at December 31, 2025 and 2024 65 Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2025, 2024 and 2023 66 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023 67 Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 68 Notes to Consolidated Financial Statements 69 2. Financial Statement Schedules. The following consolidated financial statement schedule is included in this Annual Report on Form 10-K. Schedule II – Valuation and Qualifying Accounts Schedules other than those listed above have been omitted since they are either not required or information is otherwise included. 3. Exhibits. The following exhibits are filed as part of this Annual Report on Form 10-K. Exhibit No. Title +3.1(1) Restated Articles of Organization of the Registrant +3.2(2) Second Amended and Restated By-Laws of the Registrant +3.3(1) Amendments to Second Amended and Restated By-Laws of the Registrant +4.1(3) Specimen certificate representing the Common Stock +4.2(4) Description of Capital Stock Registered Under Section 12 of the Exchange Act +4.3(5) Indenture, dated May 16, 2024, between the Registrant and U.S. Bank Trust Company, National Association, as trustee +4.4(5) Form of Global Note (included with Exhibit 4.3) +4.5(6) Indenture, dated February 4, 2026, by and among the Registrant, the guarantors listed therein and U.S. Bank Trust Company, National Association, as trustee +4.6(6) Form of Global Note (included with Exhibit 4.5) +10.1(7) Credit Agreement, dated as of August 17, 2022, by and among the Registrant, the lenders and letter of credit issuers party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent +10.2(8) First Amendment to Credit Agreement, dated as of October 3, 2023, by and among the Registrant, as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender party thereto 111 Exhibit No. Title +10.3(9) Second Amendment to Credit Agreement, dated as of January 22, 2024, by and among the Registrant, as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender party thereto +10.4(10) Third Amendment to Credit Agreement, dated as of February 13, 2024, by and among the Registrant, as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender and letter of credit issuer party thereto +10.5(11) Fourth Amendment to Credit Agreement, dated as of July 23, 2024, by and among the Registrant, as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender thereto +10.6(12) Fifth Amendment to Credit Agreement, dated as of January 24, 2025, by and among the Registrant, as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each lender party thereto +10.7(6) Sixth Amendment to Credit Agreement, dated as of February 4, 2026, by and among the Registrant, as parent borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A. and J.P. Morgan SE, as administrative agent, JPMorgan Chase Bank, N.A., as collateral agent, and each lender and letter of credit issuer party thereto +10.8(13)* 2022 Stock Incentive Plan +10.9(14)* Form of Restricted Stock Unit Agreement for Non-Employee Directors under the 2022 Stock Incentive Plan for 2025-2026 +10.10(15)* Form of Restricted Stock Unit Agreement for Employees under the 2022 Stock Incentive Plan for 2023 +10.11(16)* Form of Restricted Stock Unit Agreement for Employees under the 2022 Stock Incentive Plan for 2024-2026 (Standard) +10.12(16)* Form of Restricted Stock Unit Agreement for Employees under the 2022 Stock Incentive Plan for 2024-2026 (rTSR) +10.13(17)* 2014 Stock Incentive Plan +10.14(17)* 2014 Employee Stock Purchase Plan +10.15(18)* Form of Restricted Stock Unit Agreement for Employees under the 2014 Stock Incentive Plan +10.16(19)* Employment Agreement, dated October 22, 2013, between Gerald G. Colella and the Registrant +10.17(20)* Amendment, dated March 27, 2018, to Employment Agreement, dated as of October 22, 2013, between Gerald G. Colella and the Registrant +10.18(21)* Second Amendment, dated October 29, 2018, to Employment Agreement, dated as of October 22, 2013, between Gerald G. Colella and the Registrant +10.19(22)* Employment Agreement, dated as of November 18, 2019, between John T.C. Lee and the Registrant +10.20(23)* Employment Agreement, effective August 1, 2016, between Kathleen Burke and the Registrant, as amended on October 29, 2018 +10.21(4)* Employment Agreement, effective September 16, 2019, between James A. Schreiner and the Registrant +10.22(24)* Amendment, dated October 25, 2021, to Employment Agreement, effective September 16, 2019, between James A. Schreiner and the Registrant +10.23(25)* Second Amendment, dated May 7, 2024, to Employment Agreement, dated as of September 16, 2019, between James A. Schreiner and the Registrant +10.24(26)* Employment Agreement, effective January 1, 2020, between David Henry and the Registrant +10.25(26)* Employment Agreement, effective February 17, 2021, between Eric Taranto and the Registrant +10.26(27)* Employment Agreement, effective April 30, 2024, between John Williams and the Registrant 112 Exhibit No. Title +10.27(28)* Employment Agreement, effective August 9, 2024, between Ramakumar Mayampurath and the Registrant +10.28(29)* Management Incentive Plan +19.1(14) Insider Trading Policy 21.1 Subsidiaries of the Registrant 23.1 Consent of PricewaterhouseCoopers LLP 31.1 Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934 31.2 Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934 32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97.1 Dodd-Frank Compensation Recovery Policy 101.INS** Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH** Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents 104 Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101) + Previously filed * Management contract or compensatory plan arrangement ** Filed with this Annual Report on Form 10-K for the year ended December 31, 2025 are the following documents formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations and Comprehensive Income (Loss); (iii) the Consolidated Statements of Stockholders’ Equity; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements. The following materials from MKS Inc.’s Annual Report on Form 10-K for the year ended December 31, 2025, are formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) the Consolidated Statements of Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements. (1) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on May 15, 2025. (2) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on December 3, 2024. (3) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (File No. 000-23621), filed with the Securities and Exchange Commission on August 7, 2025. (4) Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 000-23621), filed with the Securities and Exchange Commission on February 28, 2020. (5) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on May 16, 2024. (6) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on February 5, 2026. (7) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on August 17, 2022. (8) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on October 3, 2023. 113 (9) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on January 22, 2024. (10) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on February 14, 2024. (11) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on July 23, 2024. (12) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on January 24, 2025. (13) Incorporated by reference to the Registration Statement on Form S-8 (File No. 333-264817), filed with the Securities and Exchange Commission on May 10, 2022. (14) Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2024 (File No. 000-23621), filed with the Securities and Exchange Commission on February 25, 2025. (15) Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2022 (File No. 000-23621), filed with the Securities and Exchange Commission on March 14, 2023. (16) Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2023 (File No.000-23621), filed with the Securities and Exchange Commission on February 27, 2024. (17) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on May 6, 2014. (18) Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2018 (File No.000-23621), filed with the Securities and Exchange Commission on February 26, 2019. (19) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on October 24, 2013. (20) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 (File No. 000-23621), filed with the Securities and Exchange Commission on May 8, 2018. (21) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on November 1, 2018. (22) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on November 20, 2019. (23) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 (File No. 000-23621), filed with the Securities and Exchange Commission on August 7, 2019. (24) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on October 29, 2021. (25) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on May 8, 2024. (26) Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No.000-23621), filed with the Securities and Exchange Commission on February 23, 2021. (27) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (File No. 000-23621), filed with the Securities and Exchange Commission on August 8, 2024. (28) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 (File No. 000-23621), filed with the Securities and Exchange Commission on November 7, 2024. (29) Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-23621), filed with the Securities and Exchange Commission on February 11, 2022. (b) Exhibits MKS hereby files as exhibits to its Annual Report on Form 10-K those exhibits listed in Item 15(a) above. 114 Item 16. Form 10-K Summary Not applicable. 115 MKS Inc. SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (in millions) Additions Description Balance at Beginning of Year Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Year Valuation allowance on deferred tax asset: Years ended December 31, 2025 $ 151 $ 2 $ — $ ( 74 ) $ 79 2024 $ 190 $ 2 $ — $ ( 41 ) $ 151 2023 $ 181 $ 12 $ — $ ( 3 ) $ 190 116 SIGNA TURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this annual report on Form 10-K for the fiscal year ended December 31, 2025 to be signed on its behalf by the undersigned, thereunto duly authorized on the 24th day of February 2026. MKS INC. By: /s/ John T.C. Lee John T.C. Lee President and Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated. SIGNATURES TITLE DATE /s/ Gerald G. Colella Chairman of the Board of Directors February 24, 2026 Gerald G. Colella /s/ John T.C. Lee President, Chief Executive Officer and Director (Principal Executive Officer) February 24, 2026 John T.C. Lee /s/ Ramakumar Mayampurath Executive Vice President and Chief Financial Officer (Principal Financial Officer) February 24, 2026 Ramakumar Mayampurath /s/ Michelle M. McCarthy Vice President and Chief Accounting Officer (Principal Accounting Officer) Director February 24, 2026 Michelle M. McCarthy /s/ Rajeev Batra February 24, 2026 Rajeev Batra /s/ Peter J. Cannone III Director February 24, 2026 Peter J. Cannone III /s/ Joseph B. Donahue Director February 24, 2026 Joseph B. Donahue /s/ Wissam G. Jabre Director February 24, 2026 Wissam G. Jabre /s/ Jacqueline F. Moloney Director February 24, 2026 Jacqueline F. Moloney /s/ Elizabeth A. Mora Director February 24, 2026 Elizabeth A. Mora 117