Investor Relations Contact:
• GAAP EPS $3.17 and record non-GAAP EPS $3.50, up 43 percent and 41 percent year over year, respectively
• EPIC Center R&D partnerships expand to 11 engagements with leading chipmakers, universities and innovation partners
Applied generated record revenue of $9.12 billion. On a GAAP basis, the company reported gross margin of 50.3 percent, record operating income of $3.08 billion or 33.7 percent of revenue, and earnings per share (EPS) of $3.17.
On a non-GAAP basis, the company reported gross margin of 50.4 percent, record operating income of $3.10 billion or 34.0 percent of revenue, and record EPS of $3.50.
The company generated record cash from operations of $3.04 billion and distributed $860 million to shareholders through $440 million in share repurchases and $420 million in dividends.
“Applied Materials delivered another record-breaking quarter, including the highest sequential revenue growth in the company’s history,” said Gary Dickerson, President and CEO. “As the rapid global adoption of AI drives unprecedented demand for our materials engineering solutions, we are further raising our Semiconductor Systems revenue expectations for calendar 2026 and are confident we will grow faster than the market this year. Based on the increased demand visibility we are receiving from our customers, we expect another strong growth year for Applied Materials in 2027.”
“Applied Materials achieved its 13th consecutive quarter of year-over-year gross margin expansion, demonstrating the increasing value we create by enabling better chips, systems and fab returns,” said Brice Hill, Senior Vice President and CFO. “We expect continued strong revenue growth in the second half of the calendar year, particularly in DRAM as well as leading-edge foundry-logic and advanced packaging. Looking further ahead, we are making additional manufacturing capacity investments to support projected demand through the end of the decade.” Applied Materials, Inc.
A reconciliation of the GAAP and non-GAAP results is provided in the financial tables included in this release. See also “Use of Non-GAAP Financial Measures” section.
• Enhanced Centura™ Prime™ Epi: selectively grows doped silicon germanium and silicon phosphorous in transistor source/drain regions, combining advanced strain engineering with precise doping control. The result is higher drive current and transistor efficiency, enabling faster, more power-efficient DRAM and high bandwidth memory (HBM).
• Opta™ Quad CMP: engineered specifically for advanced packaging, the Opta Quad continuously monitors wafer conditions during polish and dynamically adjusts in real time, improving within-wafer uniformity and total thickness variation control, which is particularly critical for hybrid bonding.
• Nokota™ VMax™ 2 ECD: high-precision copper plating across a broad range of applications for next-generation packaging, from TSV fill for 3D stacking to fine-pitch interconnects such as microbump formation. Nokota VMax 2 introduces Adaptive Pattern Tuning (APT), which dynamically shapes the electric field to correct for layout-driven variation and improve plating uniformity across the wafer.
• Producer™ Avila™ 2 PECVD: improves the mechanical stability of ultra-thin DRAM dies by depositing stress-balanced dielectric films around TSVs, enabling reliable stacking of 12, 16 and future high-layer-count HBM designs.
• VeritySEM™ 7AP Metrology: critical dimension eBeam metrology enables precise measurement of features on thick, heterogeneous and highly warped substrates common in HBM and chiplet architectures. VeritySEM AP systems automatically reconfigure to support a range of sizes and materials, while delivering sub-10nm sensitivity—orders of magnitude better than optical tools.
• SEMVision™ G7AP Defect Analysis: extends Applied’s leadership in eBeam defect analysis into advanced packaging, enabling high-resolution defect review and automated classification across silicon, organic and glass substrates. The system can accelerate yield learning by helping customers quickly distinguish critical defects from nuisance signals. Applied Materials, Inc.
Page 3 of 14 • Introduced new deposition and etch systems that help chipmakers extend scaling in logic and memory to deliver higher performance, improved energy efficiency and better manufacturing yield for next-generation AI chips.
• Centris™ Spectral™ SiN ALD: leverages innovative microwave plasma technology to deliver uniform silicon nitride deposition in challenging 3D structures.
• Producer™ Selectra™ Mo Etch: selectively removes molybdenum for wordline separation to enable 3D NAND scaling.
• Unveiled SENZ™, an integrated ambient visual platform that combines waveguide optics, light engine, sensing, vision correction and electronic dimming technology in a single system designed for AI-powered next-generation display smart glasses.
• Announced three additional EPIC Center partnerships. The EPIC Center is designed to dramatically reduce the time it takes to commercialize breakthrough technologies from early-stage research to full-scale manufacturing.
• Broadcom Inc. will join EPIC as an innovation partner to accelerate development of advanced chip packaging technologies critical to next-generation AI systems.
• The University of California, Berkeley will join the EPIC Center as a research collaborator. Working side by side with Applied’s scientists and engineers, UC Berkeley faculty and students will pursue high-impact research programs to accelerate the material and process innovations that are foundational to AI computing.
• SCREEN Semiconductor Solutions Co., Ltd. (SCREEN SPE) will join the EPIC Center as an innovation partner, bringing together SCREEN SPE’s expertise in wafer cleaning technology with Applied's leadership in materials engineering to develop co-optimized process solutions for the world’s most advanced chips.
• Expanded our manufacturing and R&D operations in Singapore to support the global build-out of AI infrastructure. The new US$500 million Tampines Campus more than doubles Applied’s advanced cleanroom capacity in Singapore and strengthens the company’s global manufacturing footprint.
• Announced a long-term joint development agreement with EssilorLuxottica to accelerate the commercialization of next-generation intelligent optical systems for augmented reality and AI-powered smart eyewear.
• Published our latest Impact Report highlighting how Applied is progressing toward its sustainability goals and helping reduce the resources required to manufacture the semiconductors and technologies that support more energy- efficient computing in use. Applied Materials, Inc.
Applied’s total revenue and non-GAAP diluted EPS for the fourth quarter of fiscal 2026 are expected to be as follows:
This outlook for non-GAAP diluted EPS excludes known charges related to completed acquisitions of $0.01 per share, includes the normalized tax benefit of share-based compensation of $0.01 per share and includes a net income tax benefit related to intra-entity intangible asset transfers of $0.05 per share, but does not reflect any items that are unknown at this time, such as any additional charges related to acquisitions or other non-operational or unusual items, as well as other tax-related items, which we are not able to predict without unreasonable efforts due to their inherent uncertainty.
Effective in the first quarter of fiscal 2026, management moved our 200-millimeter equipment business to Semiconductor Systems. The business was previously included in Applied Global Services. Additionally, effective in the first quarter of fiscal 2026, management began fully allocating corporate support costs to our operating segments. Prior-period numbers have been recast to conform to the current-year presentation. Display operating segment financial results are included in the Other category balances below.
Applied provides investors with certain non-GAAP financial measures, which are adjusted for the impact of certain costs, expenses, gains and losses, including, as applicable, certain items related to mergers and acquisitions; restructuring and severance charges and any associated adjustments; legal settlement charges; impairments of assets; gain or loss, dividends and impairments on strategic investments; certain income tax items; and other discrete adjustments. On a non- GAAP basis, the tax effect related to share-based compensation is recognized ratably over the fiscal year. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release.
Management uses these non-GAAP financial measures to evaluate the company’s operating and financial performance and for planning purposes, and as performance measures in its executive compensation program. Applied believes these measures enhance an overall understanding of its performance and investors’ ability to review the company’s business from the same perspective as the company’s management, and facilitate comparisons of this period’s results with prior periods on a consistent basis by excluding items that management does not believe are indicative of Applied's ongoing operating performance. There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles, may be different from non-GAAP financial measures used by other companies, and may exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.
Applied Materials will discuss these results during an earnings call that begins at 1:30 p.m. Pacific Time today. A live webcast and related slide presentation will be available at https://ir.appliedmaterials.com . A replay will be available on the website beginning at 5:00 p.m. Pacific Time today. Applied Materials, Inc.
This press release contains forward-looking statements, including those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, technology transitions, our business and financial performance and market share positions, our capital allocation and cash deployment strategies, our investment and growth strategies, our development of new products and technologies, the plans and expectations for the EPIC Center, legal matters, our business outlook for the fourth quarter of fiscal 2026 and beyond, and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products; global economic, political and industry conditions, including changes in interest rates and prices for goods and services; global trade issues, changes in trade and export regulations, license requirements, and their interpretation, and our ability to obtain licenses or authorizations on a timely basis, if at all; changes in tariffs, any retaliatory measures, and our ability to mitigate the impact of tariffs; the effects of geopolitical turmoil or conflicts; demand for semiconductor chips and electronic devices; customers’ technology and capacity requirements; the introduction of new and innovative technologies, and the timing of technology transitions; our ability to develop, deliver and support new products and technologies; our ability to meet customer demand, and our suppliers’ ability to meet our demand requirements; the concentrated nature of our customer base; our ability to expand our current markets, increase market share and develop new markets; market acceptance of existing and newly developed products; our ability to obtain and protect intellectual property rights in key technologies; cybersecurity incidents affecting us or our suppliers, customers or vendors; our ability to achieve the objectives of operational and strategic initiatives, align our resources and cost structure with business conditions, and attract, motivate and retain key employees; acquisitions, investments and divestitures; changes in income tax laws; the variability of operating expenses and results among products and segments, and our ability to accurately forecast future results, market conditions, customer requirements and business needs; our ability to ensure compliance with applicable law, rules and regulations; and other risks and uncertainties described in our filings with the Securities and Exchange Commission, including our most recent Forms 10-K, 10-Q and 8-K. All forward-looking statements are based on management’s current estimates, projections and assumptions, and we assume no obligation to update them.
Applied Materials, Inc. (Nasdaq: AMAT) is the leader in materials engineering solutions that are at the foundation of virtually every new semiconductor and advanced display in the world. The technology we create is essential to advancing AI and accelerating the commercialization of next-generation chips. At Applied, we push the boundaries of science and engineering to deliver material innovation that changes the world. Learn more at www.appliedmaterials.com . Applied Materials, Inc.
July 26, October 26, (In millions) 2026 2025 ────────────────────────────────────────────────────────────────────────────── ASSETS Current assets: Cash and cash equivalents $ 7,037 $ 7,241 Short-term investments 2,196 1,332 Accounts receivable, net 7,691 5,185 Inventories 6,564 5,915 Other current assets 1,607 1,208 Total current assets 25,095 20,881 Long-term investments 5,268 4,327 Property, plant and equipment, 5,606 4,610 net Goodwill 3,873 3,707 Purchased technology and other 315 226 intangible assets, net Deferred income taxes and 3,365 2,548 other assets Total assets $ 43,522 $ 36,299 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Short-term debt $ 1,299 $ 100 Accounts payable and accrued 5,787 5,333 expenses Contract liabilities 3,271 2,566 Total current liabilities 10,357 7,999 Long-term debt 5,245 6,455 Income taxes payable 880 356 Other liabilities 1,414 1,074 Total liabilities 17,896 15,884 Total stockholders’ equity 25,626 20,415 Total liabilities and stockholders’ $ 43,522 $ 36,299 equity
These items are incremental charges attributable to completed 1 acquisitions, consisting of amortization of purchased intangible assets. Charge of $253 million for settlement with the U.S. Commerce Department 2 Bureau of Industry and Security to resolve a previously disclosed export controls compliance matter. 3 The restructuring charges related to a workforce reduction plan announced in the fourth quarter of fiscal 2025. 4 GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis. Amount for the nine months ended July 27, 2025, included changes to the income tax provision of $94 million from amortization of intangibles 5 and a $644 million remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore in the first quarter of fiscal 2025. Amounts for the three and nine months ended July 27, 2025 included the 6 impact of the recognition of a $410 million valuation allowance against deferred tax assets related to corporate alternative minimum tax credits. 7 Adjustment to provision for income taxes related to non-GAAP adjustments reflected in income before income taxes.
Amount for the nine months ended July 27, 2025, included changes to the income tax provision of $0.12 per diluted share from amortization of 1 intangibles and $0.79 per diluted share from a remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore in the first quarter of fiscal 2025. Amounts for the three and nine months ended July 27, 2025 included a 2 $0.51 per diluted share impact of the recognition of a valuation allowance against deferred tax assets related to corporate alternative minimum tax credits.
These items are incremental charges attributable to completed 1 acquisitions, consisting of amortization of purchased intangible assets. Charge of $253 million for settlement with the U.S. Commerce Department 2 Bureau of Industry and Security to resolve a previously disclosed export controls compliance matter.
Note: The reconciliation of GAAP and non-GAAP segment results above does not include certain revenues, costs of products sold and operating expenses that are reported within other and included in consolidated operating income. Applied Materials, Inc.
Three Months Ended (In millions, except percentages) July 26, 2026 ───────────────────────────────────────────────────────────────────────── GAAP provision for income taxes(a) $ 369 Income tax effect of share-based -10 compensation Income tax effects related to -33 intra-entity intangible asset transfers Resolutions of prior years’ income tax 46 filings and other tax items Income tax effect of non-GAAP -26 adjustments Non-GAAP provision for income taxes(b) $ 346 GAAP income before income taxes(c) $ 2,907 Certain items associated with 16 acquisitions Acquisition integration and deal costs 5 Realized loss (gain), dividends and impairments on strategic investments, -7 net Unrealized loss (gain) on strategic 220 investments, net Non-GAAP income before income taxes(d) $ 3,141 GAAP effective income tax rate(a/c) 12.7 % Non-GAAP effective income tax rate(b/d) 11.0 %
Full text with the tables
Exhibit 99.1
Investor Relations Contact:
Mike Sullivan (408) 986-7977
mike_sullivan@amat.com
Media Contact:
Ricky Gradwohl (408) 235-4676
ricky_gradwohl@amat.com
APPLIED MATERIALS ANNOUNCES THIRD QUARTER 2026 RESULTS
• Record revenue $9.12 billion, up 25 percent year over year
• GAAP gross margin 50.3 percent and non-GAAP gross margin 50.4 percent
• GAAP EPS $3.17 and record non-GAAP EPS $3.50, up 43 percent and 41 percent
year over year, respectively
• EPIC Center R&D partnerships expand to 11 engagements with leading chipmakers,
universities and innovation partners
SANTA CLARA, Calif., Aug. 13, 2026 — Applied Materials, Inc. (NASDAQ: AMAT)
today reported results for its third quarter ended July 26, 2026.
Third Quarter Results
Applied generated record revenue of $9.12 billion. On a GAAP basis, the company
reported gross margin of 50.3 percent, record operating income of $3.08 billion
or 33.7 percent of revenue, and earnings per share (EPS) of $3.17.
On a non-GAAP basis, the company reported gross margin of 50.4 percent, record
operating income of $3.10 billion or 34.0 percent of revenue, and record EPS of
$3.50.
The company generated record cash from operations of $3.04 billion and
distributed $860 million to shareholders through $440 million in share
repurchases and $420 million in dividends.
“Applied Materials delivered another record-breaking quarter, including the
highest sequential revenue growth in the company’s history,” said Gary
Dickerson, President and CEO. “As the rapid global adoption of AI drives
unprecedented demand for our materials engineering solutions, we are further
raising our Semiconductor Systems revenue expectations for calendar 2026 and are
confident we will grow faster than the market this year. Based on the increased
demand visibility we are receiving from our customers, we expect another strong
growth year for Applied Materials in 2027.”
“Applied Materials achieved its 13th consecutive quarter of year-over-year gross
margin expansion, demonstrating the increasing value we create by enabling
better chips, systems and fab returns,” said Brice Hill, Senior Vice President
and CFO. “We expect continued strong revenue growth in the second half of the
calendar year, particularly in DRAM as well as leading-edge foundry-logic and
advanced packaging. Looking further ahead, we are making additional
manufacturing capacity investments to support projected demand through the end
of the decade.”
Applied Materials, Inc.
Page 2 of 14
Results Summary
Q3 FY2026
(In millions,
except per
share amounts
and
percentages) Q3 FY2025 Change
──────────────────────────────────────────────────────────────────────────────
Revenue $ 9,115 $ 7,302 25%
Gross margin 50.3 % 48.8 % 1.5 points
Operating 33.7 % 30.6 % 3.1 points
margin
Net income $ 2,538 $ 1,779 43%
Diluted
earnings per $ 3.17 $ 2.22 43%
share
Non-GAAP
Results
Non-GAAP 50.4 % 48.9 % 1.5 points
gross margin
Non-GAAP
operating 34.0 % 30.7 % 3.3 points
margin
Non-GAAP net $ 2,795 $ 1,989 41%
income
Non-GAAP $ 3.50 $ 2.48 41%
diluted EPS
Non-GAAP
free cash $ 2,330 $ 2,050 14%
flow
A reconciliation of the GAAP and non-GAAP results is provided in the financial
tables included in this release. See also “Use of Non-GAAP Financial Measures”
section.
Recent Highlights
New Products and Technologies
• Introduced six new chipmaking systems for DRAM and advanced packaging.
• Enhanced Centura™ Prime™ Epi: selectively grows doped silicon germanium and
silicon phosphorous in transistor source/drain regions, combining advanced
strain engineering with precise doping control. The result is higher drive
current and transistor efficiency, enabling faster, more power-efficient DRAM
and high bandwidth memory (HBM).
• Opta™ Quad CMP: engineered specifically for advanced packaging, the Opta Quad
continuously monitors wafer conditions during polish and dynamically adjusts in
real time, improving within-wafer uniformity and total thickness variation
control, which is particularly critical for hybrid bonding.
• Nokota™ VMax™ 2 ECD: high-precision copper plating across a broad range of
applications for next-generation packaging, from TSV fill for 3D stacking to
fine-pitch interconnects such as microbump formation. Nokota VMax 2 introduces
Adaptive Pattern Tuning (APT), which dynamically shapes the electric field to
correct for layout-driven variation and improve plating uniformity across the
wafer.
• Producer™ Avila™ 2 PECVD: improves the mechanical stability of ultra-thin DRAM
dies by depositing stress-balanced dielectric films around TSVs, enabling
reliable stacking of 12, 16 and future high-layer-count HBM designs.
• VeritySEM™ 7AP Metrology: critical dimension eBeam metrology enables precise
measurement of features on thick, heterogeneous and highly warped substrates
common in HBM and chiplet architectures. VeritySEM AP systems automatically
reconfigure to support a range of sizes and materials, while delivering sub-10nm
sensitivity—orders of magnitude better than optical tools.
• SEMVision™ G7AP Defect Analysis: extends Applied’s leadership in eBeam defect
analysis into advanced packaging, enabling high-resolution defect review and
automated classification across silicon, organic and glass substrates. The
system can accelerate yield learning by helping customers quickly distinguish
critical defects from nuisance signals.
Applied Materials, Inc.
Page 3 of 14
• Introduced new deposition and etch systems that help chipmakers extend scaling
in logic and memory to deliver higher performance, improved energy efficiency
and better manufacturing yield for next-generation AI chips.
• Centris™ Spectral™ SiN ALD: leverages innovative microwave plasma technology
to deliver uniform silicon nitride deposition in challenging 3D structures.
• Producer™ Selectra™ Mo Etch: selectively removes molybdenum for wordline
separation to enable 3D NAND scaling.
• Unveiled SENZ™, an integrated ambient visual platform that combines waveguide
optics, light engine, sensing, vision correction and electronic dimming
technology in a single system designed for AI-powered next-generation display
smart glasses.
Corporate Initiatives
• Announced three additional EPIC Center partnerships. The EPIC Center is
designed to dramatically reduce the time it takes to commercialize breakthrough
technologies from early-stage research to full-scale manufacturing.
• Broadcom Inc. will join EPIC as an innovation partner to accelerate
development of advanced chip packaging technologies critical to next-generation
AI systems.
• The University of California, Berkeley will join the EPIC Center as a research
collaborator. Working side by side with Applied’s scientists and engineers, UC
Berkeley faculty and students will pursue high-impact research programs to
accelerate the material and process innovations that are foundational to AI
computing.
• SCREEN Semiconductor Solutions Co., Ltd. (SCREEN SPE) will join the EPIC
Center as an innovation partner, bringing together SCREEN SPE’s expertise in
wafer cleaning technology with Applied's leadership in materials engineering to
develop co-optimized process solutions for the world’s most advanced chips.
• Expanded our manufacturing and R&D operations in Singapore to support the
global build-out of AI infrastructure. The new US$500 million Tampines Campus
more than doubles Applied’s advanced cleanroom capacity in Singapore and
strengthens the company’s global manufacturing footprint.
• Announced a long-term joint development agreement with EssilorLuxottica to
accelerate the commercialization of next-generation intelligent optical systems
for augmented reality and AI-powered smart eyewear.
• Published our latest Impact Report highlighting how Applied is progressing
toward its sustainability goals and helping reduce the resources required to
manufacture the semiconductors and technologies that support more energy-
efficient computing in use.
Applied Materials, Inc.
Page 4 of 14
Business Outlook
Applied’s total revenue and non-GAAP diluted EPS for the fourth quarter of
fiscal 2026 are expected to be as follows:
(In millions, except per share amounts) Q4 FY2026
──────────────────────────────────────────────────────────────────────────────
Total revenue $ 10,250 +/- $ 500
Non-GAAP diluted EPS $ 4.02 +/- $ 0.20
This outlook for non-GAAP diluted EPS excludes known charges related to
completed acquisitions of $0.01 per share, includes the normalized tax benefit
of share-based compensation of $0.01 per share and includes a net income tax
benefit related to intra-entity intangible asset transfers of $0.05 per share,
but does not reflect any items that are unknown at this time, such as any
additional charges related to acquisitions or other non-operational or unusual
items, as well as other tax-related items, which we are not able to predict
without unreasonable efforts due to their inherent uncertainty.
Third Quarter Reportable Segment Information
Effective in the first quarter of fiscal 2026, management moved our
200-millimeter equipment business to Semiconductor Systems. The business was
previously included in Applied Global Services. Additionally, effective in the
first quarter of fiscal 2026, management began fully allocating corporate
support costs to our operating segments. Prior-period numbers have been recast
to conform to the current-year presentation. Display operating segment financial
results are included in the Other category balances below.
Semiconductor Systems
(in millions, except
percentages) Q3 FY2026 Q3 FY2025
──────────────────────────────────────────────────────────────────────────────
Revenue $ 7,040 $ 5,564
Foundry, logic and other 67 % 69 %
DRAM 26 % 22 %
Flash memory 7 % 9 %
Gross margin 55.3 % 53.4 %
Operating income $ 2,657 $ 1,837
Operating margin 37.7 % 33.0 %
Non-GAAP Results
Non-GAAP gross margin 55.4 % 53.5 %
Non-GAAP operating income $ 2,673 $ 1,849
Non-GAAP operating margin 38.0 % 33.2 %
Applied Global Services
(in millions, except
percentages) Q3 FY2026 Q3 FY2025
──────────────────────────────────────────────────────────────────────────────
Revenue $ 1,781 $ 1,463
Gross margin 35.6 % 33.8 %
Operating income $ 536 $ 400
Operating margin 30.1 % 27.3 %
Non-GAAP Results
Non-GAAP gross margin 35.6 % 33.8 %
Non-GAAP operating income $ 536 $ 400
Non-GAAP operating margin 30.1 % 27.3 %
Other
(in millions) Q3 FY2026 Q3 FY2025
──────────────────────────────────────────────────────────────────────────
Revenue $ 294 $ 275
Cost of products sold and expenses -412 -279
Operating income (loss) $ -118 $ -4
Applied Materials, Inc.
Page 5 of 14
Use of Non-GAAP Financial Measures
Applied provides investors with certain non-GAAP financial measures, which are
adjusted for the impact of certain costs, expenses, gains and losses, including,
as applicable, certain items related to mergers and acquisitions; restructuring
and severance charges and any associated adjustments; legal settlement charges;
impairments of assets; gain or loss, dividends and impairments on strategic
investments; certain income tax items; and other discrete adjustments. On a non-
GAAP basis, the tax effect related to share-based compensation is recognized
ratably over the fiscal year. Reconciliations of these non-GAAP measures to the
most directly comparable financial measures calculated and presented in
accordance with GAAP are provided in the financial tables included in this
release.
Management uses these non-GAAP financial measures to evaluate the company’s
operating and financial performance and for planning purposes, and as
performance measures in its executive compensation program. Applied believes
these measures enhance an overall understanding of its performance and
investors’ ability to review the company’s business from the same perspective as
the company’s management, and facilitate comparisons of this period’s results
with prior periods on a consistent basis by excluding items that management does
not believe are indicative of Applied's ongoing operating performance. There are
limitations in using non-GAAP financial measures because the non-GAAP financial
measures are not prepared in accordance with generally accepted accounting
principles, may be different from non-GAAP financial measures used by other
companies, and may exclude certain items that may have a material impact upon
our reported financial results. The presentation of this additional information
is not meant to be considered in isolation or as a substitute for the directly
comparable financial measures prepared in accordance with GAAP.
Webcast Information
Applied Materials will discuss these results during an earnings call that begins
at 1:30 p.m. Pacific Time today. A live webcast and related slide presentation
will be available at https://ir.appliedmaterials.com . A replay will be
available on the website beginning at 5:00 p.m. Pacific Time today.
Applied Materials, Inc.
Page 6 of 14
Forward-Looking Statements
This press release contains forward-looking statements, including those
regarding anticipated growth and trends in our businesses and markets, industry
outlooks and demand drivers, technology transitions, our business and financial
performance and market share positions, our capital allocation and cash
deployment strategies, our investment and growth strategies, our development of
new products and technologies, the plans and expectations for the EPIC Center,
legal matters, our business outlook for the fourth quarter of fiscal 2026 and
beyond, and other statements that are not historical facts. These statements and
their underlying assumptions are subject to risks and uncertainties and are not
guarantees of future performance. Factors that could cause actual results to
differ materially from those expressed or implied by such statements include,
without limitation: the level of demand for our products; global economic,
political and industry conditions, including changes in interest rates and
prices for goods and services; global trade issues, changes in trade and export
regulations, license requirements, and their interpretation, and our ability to
obtain licenses or authorizations on a timely basis, if at all; changes in
tariffs, any retaliatory measures, and our ability to mitigate the impact of
tariffs; the effects of geopolitical turmoil or conflicts; demand for
semiconductor chips and electronic devices; customers’ technology and capacity
requirements; the introduction of new and innovative technologies, and the
timing of technology transitions; our ability to develop, deliver and support
new products and technologies; our ability to meet customer demand, and our
suppliers’ ability to meet our demand requirements; the concentrated nature of
our customer base; our ability to expand our current markets, increase market
share and develop new markets; market acceptance of existing and newly developed
products; our ability to obtain and protect intellectual property rights in key
technologies; cybersecurity incidents affecting us or our suppliers, customers
or vendors; our ability to achieve the objectives of operational and strategic
initiatives, align our resources and cost structure with business conditions,
and attract, motivate and retain key employees; acquisitions, investments and
divestitures; changes in income tax laws; the variability of operating expenses
and results among products and segments, and our ability to accurately forecast
future results, market conditions, customer requirements and business needs; our
ability to ensure compliance with applicable law, rules and regulations; and
other risks and uncertainties described in our filings with the Securities and
Exchange Commission, including our most recent Forms 10-K, 10-Q and 8-K. All
forward-looking statements are based on management’s current estimates,
projections and assumptions, and we assume no obligation to update them.
About Applied Materials
Applied Materials, Inc. (Nasdaq: AMAT) is the leader in materials engineering
solutions that are at the foundation of virtually every new semiconductor and
advanced display in the world. The technology we create is essential to
advancing AI and accelerating the commercialization of next-generation chips. At
Applied, we push the boundaries of science and engineering to deliver material
innovation that changes the world. Learn more at www.appliedmaterials.com .
Applied Materials, Inc.
Page 7 of 14
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In
milli…
except
per Three July Nine July July July
share Months 26, Months 27, 26, 27,
amoun… Ended 2026 Ended 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Reve… $ 9,115 $ 7,302 $ 24,037 $ 21,568
Cost
of 4,529 3,740 12,069 11,025
prod…
sold
Gross 4,586 3,562 11,968 10,543
prof…
Oper…
expe…
Rese…
deve… 1,100 901 3,055 2,653
and
engi…
Mark…
and 249 224 704 646
sell…
Gene…
and 162 204 515 667
admi…
Legal — — 253 —
sett…
Rest… — — 12 —
char…
Total
oper… 1,511 1,329 4,539 3,966
expe…
Inco…
from 3,075 2,233 7,429 6,577
oper…
Inte… 68 66 206 198
expe…
Inte…
and
other -100 396 1,237 625
inco…
(exp…
net
Inco…
befo… 2,907 2,563 8,460 7,004
inco…
taxes
Prov…
for 369 784 1,090 1,903
inco…
taxes
Net $ 2,538 $ 1,779 $ 7,370 $ 5,101
inco…
Earn…
per
shar…
Basic $ 3.20 $ 2.23 $ 9.29 $ 6.32
Dilu… $ 3.17 $ 2.22 $ 9.22 $ 6.29
Weig…
aver…
numb…
of
shar…
Basic 794 798 794 807
Dilu… 800 802 799 811
Applied Materials, Inc.
Page 8 of 14
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
July 26, October 26,
(In millions) 2026 2025
──────────────────────────────────────────────────────────────────────────────
ASSETS
Current assets:
Cash and cash equivalents $ 7,037 $ 7,241
Short-term investments 2,196 1,332
Accounts receivable, net 7,691 5,185
Inventories 6,564 5,915
Other current assets 1,607 1,208
Total current assets 25,095 20,881
Long-term investments 5,268 4,327
Property, plant and equipment, 5,606 4,610
net
Goodwill 3,873 3,707
Purchased technology and other 315 226
intangible assets, net
Deferred income taxes and 3,365 2,548
other assets
Total assets $ 43,522 $ 36,299
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Short-term debt $ 1,299 $ 100
Accounts payable and accrued 5,787 5,333
expenses
Contract liabilities 3,271 2,566
Total current liabilities 10,357 7,999
Long-term debt 5,245 6,455
Income taxes payable 880 356
Other liabilities 1,414 1,074
Total liabilities 17,896 15,884
Total stockholders’ equity 25,626 20,415
Total liabilities and
stockholders’ $ 43,522 $ 36,299
equity
Applied Materials, Inc.
Page 9 of 14
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Nine
(In Mont…
mil… Ended
July Three July July July
26, Mont… 27, 26, 27,
2026 Ended 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Cash
flo…
from
ope…
act…
Net $ 2,538 $ 1,779 $ 7,370 $ 5,101
inc…
Adj…
req…
to
rec…
net
inc…
to
cash
pro…
by
ope…
act…
Dep…
and 151 113 413 321
amo…
Res… — — 12 —
cha…
(Ga…
/
loss
and 229 -294 -909 -270
imp…
on
inv…
Sha… 169 158 545 512
com…
Def…
inc… -49 280 25 952
tax…
Oth… -15 10 -11 -28
Net
cha…
in
ope… 14 588 -1,877 -1,4…
ass…
and
lia…
Cash
pro…
by 3,037 2,634 5,568 5,130
ope…
act…
Cash
flo…
from
inv…
act…
Cap… -707 -584 -1,988 -1,4…
exp…
Cash
paid
for
acq… -87 — -262 -29
net
of
cash
acq…
Pro…
from — — 6 33
ass…
sale
Pro…
from
sal…
and 1,351 793 4,585 3,937
mat…
of
inv…
Pur…
of -1,9… -2,176 -5,493 -5,1…
inv…
Cash
pro…
by
(us… -1,4… -1,967 -3,152 -2,6…
in)
inv…
act…
Cash
flo…
from
fin…
act…
Pro…
from
iss… 99 100 399 400
of
com…
pap…
Rep…
of — -100 -400 -400
com…
pap…
Pro…
from
com… — — 131 129
sto…
iss…
Com…
sto… -440 -1,056 -1,177 -4,0…
rep…
Tax
wit…
pay…
for -128 -33 -437 -210
ves…
equ…
awa…
Pay…
of
div… -420 -368 -1,150 -1,0…
to
sto…
Pay…
of
debt — — — -2
iss…
cos…
Cash
used
in -889 -1,457 -2,634 -5,1…
fin…
act…
Inc…
(de…
in
cas…
cash 735 -790 -218 -2,6…
equ…
and
res…
cash
equ…
Cas…
cash
equ…
and
res… 6,359 6,244 7,312 8,113
cash
equ…
of
per…
Cas…
cash
equ…
and
res…
cash $ 7,094 $ 5,454 $ 7,094 $ 5,454
equ…
—
end
of
per…
Rec…
of
cas…
cash
equ…
and
res…
cash
equ…
Cash
and $ 7,037 $ 5,384 $ 7,037 $ 5,384
cash
equ…
Res…
cash
equ…
inc…
in
def… 57 70 57 70
inc…
tax…
and
oth…
ass…
Tot…
cas…
cash
equ… $ 7,094 $ 5,454 $ 7,094 $ 5,454
and
res…
cash
equ…
Sup…
cash
flow
inf…
Cash
pay…
for $ 169 $ 436 $ 819 $ 1,269
inc…
tax…
Cash
ref…
from $ 6 $ 4 $ 22 $ 79
inc…
tax…
Cash
pay… $ 73 $ 51 $ 192 $ 171
for
int…
Applied Materials, Inc.
Page 10 of 14
Additional Information
Revenue by Geography (In
millions) Q3 FY2026 Q3 FY2025
──────────────────────────────────────────────────────────────────────────────
United States $ 1,367 $ 683
% of Total 15 % 9 %
Europe $ 483 $ 160
% of Total 5 % 2 %
Japan $ 839 $ 713
% of Total 9 % 10 %
Korea $ 1,521 $ 1,160
% of Total 17 % 16 %
Taiwan $ 2,025 $ 1,843
% of Total 22 % 25 %
Southeast Asia $ 374 $ 195
% of Total 4 % 3 %
China $ 2,506 $ 2,548
% of Total 28 % 35 %
Employees(In thousands)
Regular Full Time 38.9 36.1
Applied Materials, Inc.
Page 11 of 14
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In
mill… Three July Nine July July July
exce… Mont… 26, Mont… 27, 26, 27,
perc… Ended 2026 Ended 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Non…
Gro…
Pro…
GAAP
rep… $ 4,586 $ 3,562 $ 11,… $ 10,5…
gro…
pro…
Cer…
ite…
ass… 11 7 24 20
with
acq…
Non…
gro… $ 4,597 $ 3,569 $ 11,… $ 10,5…
pro…
Non…
gro… 50.4 % 48.9 % 49.9 % 49.0 %
mar…
Non…
Ope…
Inc…
GAAP
rep… $ 3,075 $ 2,233 $ 7,4… $ 6,577
ope…
inc…
Cer…
ite…
ass… 16 11 37 34
with
acq…
Acq…
int…
and 5 1 8 4
deal
cos…
Leg… — — 253 —
set…
Res… — — 12 —
cha…
Non…
ope… $ 3,096 $ 2,245 $ 7,7… $ 6,615
inc…
Non…
ope… 34.0 % 30.7 % 32.2 % 30.7 %
mar…
Non…
Net
Inc…
GAAP
rep… $ 2,538 $ 1,779 $ 7,3… $ 5,101
net
inc…
Cer…
ite…
ass… 16 11 37 34
with
acq…
Acq…
int…
and 5 1 8 4
deal
cos…
Leg… — — 253 —
set…
Res… — — 12 —
cha…
Rea…
loss
(ga…
div…
and -7 16 22 -11
imp…
on
str…
inv…
net
Unr…
loss
(ga…
on 220 -314 -949 -288
str…
inv…
net
For…
exc…
loss
(ga…
rel… — — — 23
to
pur…
of
str…
inv…
Loss
(ga…
on — — — -44
ass…
sale
Inc…
tax
eff… 10 7 -4 1
of
sha…
com…
Inc…
tax
eff…
rel…
to 33 32 96 738
int…
int…
ass…
tra…
Res…
of
pri…
yea…
inc…
tax -46 460 3 320
fil…
and
oth…
tax
ite…
Inc…
tax
eff… 26 -3 132 -3
of
non…
adj…
Non…
net $ 2,795 $ 1,989 $ 6,9… $ 5,875
inc…
These items are incremental charges attributable to completed
1 acquisitions, consisting of amortization of purchased intangible
assets.
Charge of $253 million for settlement with the U.S. Commerce Department
2 Bureau of Industry and Security to resolve a previously disclosed
export controls compliance matter.
3 The restructuring charges related to a workforce reduction plan
announced in the fourth quarter of fiscal 2025.
4 GAAP basis tax benefit related to share-based compensation is
recognized ratably over the fiscal year on a non-GAAP basis.
Amount for the nine months ended July 27, 2025, included changes to the
income tax provision of $94 million from amortization of intangibles
5 and a $644 million remeasurement of deferred tax assets resulting from
new tax incentive agreements in Singapore in the first quarter of
fiscal 2025.
Amounts for the three and nine months ended July 27, 2025 included the
6 impact of the recognition of a $410 million valuation allowance against
deferred tax assets related to corporate alternative minimum tax
credits.
7 Adjustment to provision for income taxes related to non-GAAP
adjustments reflected in income before income taxes.
Applied Materials, Inc.
Page 12 of 14
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In
milli…
except
per Three July Nine July July July
share Months 26, Months 27, 26, 27,
amoun… Ended 2026 Ended 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Non-…
Earn…
Per
Dilu…
Share
GAAP
repo…
earn… $ 3.17 $ 2.22 $ 9.22 $ 6.29
per
dilu…
share
Cert…
items
asso… 0.02 0.01 0.04 0.04
with
acqu…
Acqu…
inte…
and 0.01 — 0.01 —
deal
costs
Legal — — 0.32 —
sett…
Rest… — — 0.01 —
char…
Real…
loss
(gai…
divi…
and -0.01 0.02 0.02 -0.02
impa…
on
stra…
inve…
net
Unre…
loss
(gai…
on 0.31 -0.39 -1.01 -0.36
stra…
inve…
net
Fore…
exch…
loss
(gai…
rela… — — — 0.03
to
purc…
of
stra…
inve…
Loss
(gai…
on — — — -0.04
asset
sale
Inco…
tax
effe… 0.02 0.01 — —
of
shar…
comp…
Inco…
tax
effe…
rela…
to 0.04 0.04 0.12 0.91
intr…
inta…
asset
tran…
Reso…
of
prior
year…
inco…
tax -0.06 0.57 — 0.40
fili…
and
other
tax
item…
Non-…
earn…
per $ 3.50 $ 2.48 $ 8.73 $ 7.25
dilu…
share
Weig…
aver…
numb… 800 802 799 811
of
dilu…
shar…
Amount for the nine months ended July 27, 2025, included changes to the
income tax provision of $0.12 per diluted share from amortization of
1 intangibles and $0.79 per diluted share from a remeasurement of
deferred tax assets resulting from new tax incentive agreements in
Singapore in the first quarter of fiscal 2025.
Amounts for the three and nine months ended July 27, 2025 included a
2 $0.51 per diluted share impact of the recognition of a valuation
allowance against deferred tax assets related to corporate alternative
minimum tax credits.
Applied Materials, Inc.
Page 13 of 14
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In
mill… Three July Nine July July July
exce… Mont… 26, Mont… 27, 26, 27,
perc… Ended 2026 Ended 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Sem…
Sys…
Non…
Gro…
Pro…
GAAP
rep… $ 3,892 $ 2,970 $ 9,9… $ 8,845
gro…
pro…
Cer…
ite…
ass… 11 7 24 20
with
acq…
Non…
gro… $ 3,903 $ 2,977 $ 9,9… $ 8,865
pro…
Non…
gro… 55.4 % 53.5 % 55.0 % 53.5 %
mar…
App…
Glo…
Ser…
Non…
Gro…
Pro…
GAAP
rep… $ 634 $ 494 $ 1,7… $ 1,407
gro…
pro…
Non…
gro… $ 634 $ 494 $ 1,7… $ 1,407
pro…
Non…
gro… 35.6 % 33.8 % 34.9 % 33.2 %
mar…
Sem…
Sys…
Non…
Ope…
Inc…
GAAP
rep… $ 2,657 $ 1,837 $ 6,1… $ 5,479
ope…
inc…
Cer…
ite…
ass… 16 11 37 34
with
acq…
Acq…
int…
and — 1 — 3
deal
cos…
Leg… — — 253 —
set…
Non…
ope… $ 2,673 $ 1,849 $ 6,4… $ 5,516
inc…
Non…
ope… 38.0 % 33.2 % 35.6 % 33.3 %
mar…
App…
Glo…
Ser…
Non…
Ope…
Inc…
GAAP
rep… $ 536 $ 400 $ 1,4… $ 1,114
ope…
inc…
Acq…
int…
and — — — 1
deal
cos…
Non…
ope… $ 536 $ 400 $ 1,4… $ 1,115
inc…
Non…
ope… 30.1 % 27.3 % 29.2 % 26.3 %
mar…
These items are incremental charges attributable to completed
1 acquisitions, consisting of amortization of purchased intangible
assets.
Charge of $253 million for settlement with the U.S. Commerce Department
2 Bureau of Industry and Security to resolve a previously disclosed
export controls compliance matter.
Note: The reconciliation of GAAP and non-GAAP segment results above does not
include certain revenues, costs of products sold and operating expenses that are
reported within other and included in consolidated operating income.
Applied Materials, Inc.
Page 14 of 14
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE
Three Months Ended
(In millions, except percentages) July 26, 2026
─────────────────────────────────────────────────────────────────────────
GAAP provision for income taxes(a) $ 369
Income tax effect of share-based -10
compensation
Income tax effects related to -33
intra-entity intangible asset transfers
Resolutions of prior years’ income tax 46
filings and other tax items
Income tax effect of non-GAAP -26
adjustments
Non-GAAP provision for income taxes(b) $ 346
GAAP income before income taxes(c) $ 2,907
Certain items associated with 16
acquisitions
Acquisition integration and deal costs 5
Realized loss (gain), dividends and
impairments on strategic investments, -7
net
Unrealized loss (gain) on strategic 220
investments, net
Non-GAAP income before income taxes(d) $ 3,141
GAAP effective income tax rate(a/c) 12.7 %
Non-GAAP effective income tax rate(b/d) 11.0 %
UNAUDITED RECONCILIATION OF NON-GAAP FREE CASH FLOW
Three July Nine July July July
(In Months 26, Months 27, 26, 27,
milli… Ended 2026 Ended 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Cash
prov…
by $ 3,037 $ 2,634 $ 5,568 $ 5,130
oper…
acti…
Capi… -707 -584 -1,988 -1,475
expe…
Non-…
free $ 2,330 $ 2,050 $ 3,580 $ 3,655
cash
flow