# CMC Materials Inc. (CCMP) — Financial Analysis

**Exchange:** NASDAQ  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/CCMP/thesis · /stocks/CCMP/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: CCMP
step: "04"
title: Financial Snapshot — FY2019 through FY2022
created: 2026-05-29
---

### Step 04: Financial Snapshot

#### Income Statement Summary

| Metric | FY2018 | FY2019 | FY2020 | FY2021 | Q1 FY2022 |
|--------|--------|--------|--------|--------|-----------|
| Revenue ($M) | $474.9 | $982.5 | $1,074.2 | $1,224.7 | ~$320M |
| Gross Profit ($M) | ~$218 | ~$411 | ~$455 | ~$520 | ~$138M |
| Gross Margin | ~45.9% | ~41.8% | ~42.4% | ~42.5% | ~43.1% |
| R&D ($M) | ~$43 | ~$58 | ~$60 | ~$65 | — |
| SG&A ($M) | ~$55 | ~$95 | ~$98 | ~$105 | — |
| EBIT (adj.) ($M) | ~$120 | ~$205 | ~$240 | ~$275 | — |
| EBIT Margin (adj.) | ~25.3% | ~20.9% | ~22.3% | ~22.5% | — |
| Adj. EBITDA ($M) | ~$140 | ~$280 | ~$320 | ~$355 | ~$95M |
| Adj. EBITDA Margin | ~29.5% | ~28.5% | ~29.8% | ~29.0% | ~29.7% |
| Net Income (GAAP) ($M) | ~$102 | ~$81 | ~$131 | ~$134 | — |
| EPS (diluted, GAAP) | ~$3.73 | ~$2.93 | ~$4.77 | ~$4.87 | — |
| Adj. EPS | ~$4.85 | ~$6.20 | ~$7.50 | ~$9.30 | — |

*FY2018 = fiscal year ended September 30, 2018 (pre-KMG close). FY2019 = first full year with KMG. Note: CMC changed fiscal year to calendar year for FY2022.*

#### Key Margin Analysis

##### Gross Margin Dynamics
CMC Materials maintained **42-46% gross margins** throughout the coverage period. Post-KMG, gross margin declined slightly from the pure-play CMP level (~46%) due to the lower-margin electronic chemicals and pipeline performance chemicals that KMG brought. However, the CMP segment itself showed continued gross margin strength:
- CMP slurries: estimated ~52-55% gross margin
- CMP pads: estimated ~40-45% gross margin
- Electronic chemicals: estimated ~30-35% gross margin
- Pipeline chemicals: estimated ~25-30% gross margin

The blended gross margin stabilized at ~42-43% as KMG integration matured.

##### Operating Leverage
The company demonstrated meaningful operating leverage post-KMG integration:
- EBIT margin expanded from ~20.9% (FY2019) to ~22.5% (FY2021) despite flat gross margins
- SG&A as % of revenue declined from ~9.7% (FY2019) to ~8.6% (FY2021)
- Integration of KMG's back-office onto CMC systems drove efficiencies

##### GAAP vs. Adjusted Earnings
The large gap between GAAP and adjusted EPS reflects:
1. **Amortization of acquired intangibles** from KMG acquisition (~$90-100M/year)
2. **Acquisition-related costs** (integration expenses, deal fees)
3. **Stock-based compensation** (~$20-25M/year)

Adjusting only for amortization, CMC's economic earnings were significantly above GAAP, making the business appear more expensive on GAAP P/E than it actually was.

#### Pre-KMG Standalone Financial Profile (FY2017-FY2018)

The pure-play CMP company was a pristine capital-light specialty chemicals business:
- Revenue: ~$430-475M
- Gross margin: ~45-47% (CMP formulations = high value-add chemistry)
- EBIT margin: ~25-27%
- ROIC: ~18-22%
- Net cash position (no debt)
- Free cash flow conversion >90% of EBIT

The KMG acquisition fundamentally changed the financial profile: added leverage ($1.5B+ debt), lowered blended margins, and reduced ROIC — but added scale and electronic chemicals exposure as a strategic hedge.

#### Revenue Growth Analysis

| Period | Revenue Growth | Organic CMP Growth | Note |
|--------|---------------|-------------------|------|
| FY2018→FY2019 | +107% | ~8% | KMG acquisition |
| FY2019→FY2020 | +9.3% | ~7-8% | First full KMG year; COVID resilience |
| FY2020→FY2021 | +14.0% | ~12-13% | Strong semi cycle; TSMC/Samsung capex surge |
| FY2021→Acq. | N/A | ~15% annualized | Last public quarter pre-acquisition |

The organic CMP business grew at 7-13% annually through this period, driven by:
- TSMC's aggressive 5nm/3nm node ramp
- Samsung HBM and DRAM technology transitions
- Intel's 10nm+ ramp (finally gaining traction)
- 3D NAND layer count expansion (SK Hynix, Micron, WDC)

#### Cash Flow Statement Highlights (FY2021)

| Item | FY2021 |
|------|--------|
| Operating Cash Flow | ~$270M |
| Capital Expenditures | ~$65-70M |
| Free Cash Flow | ~$200-205M |
| FCF Margin | ~16.5% |
| FCF Conversion (vs. adj. EBITDA) | ~57% |

FCF conversion was below the pure-play CMP levels due to:
- Higher interest expense from KMG acquisition debt ($60-70M/year)
- Elevated integration capex
- Working capital build from rapid revenue growth

#### Valuation Context at Acquisition

At the $133/share acquisition price (Dec 15, 2021 announcement):

| Metric | Value |
|--------|-------|
| Enterprise Value | ~$6.5B |
| EV/Revenue (FY2021) | ~5.3x |
| EV/EBITDA (adj., FY2021) | ~18.3x |
| EV/EBITDA (forward, FY2022E) | ~16-17x |
| P/E (adj., FY2021) | ~14.3x |
| P/FCF (FY2021) | ~32x |

The acquisition multiple represented a premium to where CCMP had historically traded (12-16x EBITDA) and reflected Entegris' conviction in the long-term secular CMP demand story and strategic synergy value.

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/CCMP/fundamental

## Navigation

- Overview: /stocks/CCMP
- Financials (this page): /stocks/CCMP/financials
- Thesis: /stocks/CCMP/thesis
- Investment Memo: /stocks/CCMP/memo
- Coverage universe: /stocks