Applied Materials, Inc.

Revenue $7.10 billion, up 7 percent year over year GAAP gross margin 49.1 percent and non-GAAP gross margin 49.2 percent GAAP operating margin 30.5 percent and non-GAAP operating margin 30.7 percent Record GAAP EPS $2.63 and record non-GAAP EPS $2.39, up 28 percent and 14 percent year over year, respectively Generated $1.57 billion in cash from operations and distributed $2.00 billion to shareholders including $1.67 billion in share repurchases and $325 million in dividends

SANTA CLARA, Calif., May 15, 2025 (GLOBE NEWSWIRE) -- Applied Materials, Inc. (NASDAQ: AMAT) today reported results for its second quarter ended Apr. 27, 2025.

“Applied Materials’ broad capabilities and connected product portfolio are driving strong results in 2025 amidst a highly dynamic macro environment,” said Gary Dickerson, President and CEO. “High-performance, energy-efficient AI computing remains the dominant driver of semiconductor innovation, and Applied is working closely with our customers and partners to accelerate the industry’s roadmap. We are very well positioned at major technology inflections in fast-growing areas of the market, which supports our multi-year growth trajectory.”

“We delivered strong performance in our second fiscal quarter with seven percent year-over-year revenue growth, record earnings per share and shareholder distributions of nearly $2 billion,” said Brice Hill, Senior Vice President and CFO. “Despite the dynamic economic and trade environment, we have not seen significant changes to customer demand and are well-equipped to navigate evolving conditions with our robust global supply chain and diversified manufacturing footprint.”

Results Summary

Q2 FY2025  Q2 FY2024  Change (In millions, except per share amounts and percentages) Net revenue $ 7,100   $ 6,646   7% Gross margin  49.1 %   47.4 %  1.7 points Operating margin  30.5 %   28.8 %  1.7 points Net income $ 2,137   $ 1,722   24% Diluted earnings per share $ 2.63   $ 2.06   28% Non-GAAP Results  Non-GAAP gross margin  49.2 %   47.5 %  1.7 points Non-GAAP operating margin  30.7 %   29.0 %  1.7 points Non-GAAP net income $ 1,940   $ 1,744   11% Non-GAAP diluted EPS $ 2.39   $ 2.09   14% Non-GAAP free cash flow $ 1,061   $ 1,135   (7)%

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.

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Business Outlook

Applied’s total net revenue, non-GAAP gross margin and non-GAAP diluted EPS for the third quarter of fiscal 2025 are expected to be approximately as follows:

Q3 FY2025 (In millions, except percentage and per share amounts)  Total net revenue $ 7,200  +/-  $ 500  Non-GAAP gross margin  48.3 %  Non-GAAP diluted EPS $ 2.35  +/-  $ 0.20

This outlook for non-GAAP diluted EPS excludes known charges related to completed acquisitions of $0.01 per share, and includes a net income tax benefit related to intra-entity intangible asset transfers of $0.04 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.

Second Quarter Reportable Segment Information

Semiconductor Systems Q2 FY2025  Q2 FY2024 (in millions, except percentages)  Net revenue $ 5,255   $ 4,901  Foundry, logic and other  65 %   65 % DRAM  27 %   32 % Flash memory  8 %   3 % Operating income $ 1,900   $ 1,701  Operating margin  36.2 %   34.7 % Non-GAAP Results  Non-GAAP operating income $ 1,911   $ 1,711  Non-GAAP operating margin  36.4 %   34.9 %

Applied Global Services Q2 FY2025  Q2 FY2024 (in millions, except percentages)  Net revenue $ 1,566   $ 1,530  Operating income $ 446   $ 436  Operating margin  28.5 %   28.5 % Non-GAAP Results  Non-GAAP operating income $ 446   $ 436  Non-GAAP operating margin  28.5 %   28.5 %

Display Q2 FY2025  Q2 FY2024 (in millions, except percentages)  Net revenue $ 259   $ 179  Operating income $ 68   $ 5  Operating margin  26.3 %   2.8 % Non-GAAP Results  Non-GAAP operating income $ 68   $ 5  Non-GAAP operating margin  26.3 %   2.8 %

Corporate and Other Q2 FY2025  Q2 FY2024 (in millions)  Unallocated net revenue $ 20   $ 36  Unallocated cost of products sold and expenses  (265 )   (266 ) Total $ (245 )  $ (230 )

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 certain items related to mergers and acquisitions; restructuring and severance charges and any associated adjustments; 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.

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, our business outlook for the third quarter of fiscal 2025 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; the implementation of additional export regulations and license requirements and their interpretation, and their impact on our ability to export products and provide services to customers and on our results of operations; global trade issues and changes in trade and export license policies and our ability to obtain licenses or authorizations on a timely basis, if at all; imposition of new or increases in tariffs and any retaliatory measures, including their impact on demand for our products and services; our ability to effectively 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 our information systems or information contained in them, or affecting our operations, 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; the effects of regional or global health epidemics; 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 SEC filings, including our recent Forms 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 used to produce virtually every new chip and advanced display in the world. Our expertise in modifying materials at atomic levels and on an industrial scale enables customers to transform possibilities into reality. At Applied Materials, our innovations make possible a better future. Learn more at www.appliedmaterials.com.

Investor Relations Contact:
Liz Morali (408) 986-7977
[email protected]

Media Contact:
Ricky Gradwohl (408) 235-4676
[email protected]

APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS  Three Months Ended  Six Months Ended (In millions, except per share amounts) April 27,
2025  April 28,
2024  April 27,
2025  April 28,
2024 Net revenue $ 7,100   $ 6,646   $ 14,266   $ 13,353  Cost of products sold  3,615    3,493    7,285    6,996  Gross profit  3,485    3,153    6,981    6,357  Operating expenses:  Research, development and engineering  893    785    1,752    1,539  Marketing and selling  216    209    422    416  General and administrative  207    247    463    523  Total operating expenses  1,316    1,241    2,637    2,478  Income from operations  2,169    1,912    4,344    3,879  Interest expense  68    59    132    118  Interest and other income (expense), net  221    141    229    536  Income before income taxes  2,322    1,994    4,441    4,297  Provision for income taxes  185    272    1,119    556  Net income $ 2,137   $ 1,722   $ 3,322   $ 3,741  Earnings per share:  Basic $ 2.64   $ 2.08   $ 4.10   $ 4.50  Diluted $ 2.63   $ 2.06   $ 4.08   $ 4.47  Weighted average number of shares:  Basic  809    830    811    831  Diluted  812    836    815    837

APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS  (In millions) April 27,
2025  October 27,
2024 ASSETS  Current assets:  Cash and cash equivalents $ 6,169   $ 8,022  Short-term investments  578    1,449  Accounts receivable, net  6,187    5,234  Inventories  5,656    5,421  Other current assets  1,118    1,094  Total current assets  19,708    21,220  Long-term investments  3,638    2,787  Property, plant and equipment, net  3,832    3,339  Goodwill  3,748    3,732  Purchased technology and other intangible assets, net  249    249  Deferred income taxes and other assets  2,457    3,082  Total assets $ 33,632   $ 34,409  LIABILITIES AND STOCKHOLDERS’ EQUITY  Current liabilities:  Short-term debt $ 799   $ 799  Accounts payable and accrued expenses  4,706    4,820  Contract liabilities  2,491    2,849  Total current liabilities  7,996    8,468  Long-term debt  5,462    5,460  Income taxes payable  321    670  Other liabilities  892    810  Total liabilities  14,671    15,408  Total stockholders’ equity  18,961    19,001  Total liabilities and stockholders’ equity $ 33,632   $ 34,409

APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS  Three Months Ended  Six Months Ended (In millions) April 27,
2025  April 28,
2024 April 27,
2025  April 28,
2024 Cash flows from operating activities:  Net income $ 2,137   $ 1,722   $ 3,322   $ 3,741  Adjustments required to reconcile net income to cash provided by operating activities:  Depreciation and amortization  103    96    208    187  Share-based compensation  159    134    354    304  Deferred income taxes  4    (134 )   672    (206 ) Other  (109 )   (12 )   (14 )   (247 ) Net change in operating assets and liabilities  (723 )   (414 )   (2,046 )   (62 ) Cash provided by operating activities  1,571    1,392    2,496    3,717  Cash flows from investing activities:  Capital expenditures  (510 )   (257 )   (891 )   (486 ) Cash paid for acquisitions, net of cash acquired  (1 )   —    (29 )   —  Proceeds from asset sale  33    —    33    —  Proceeds from sales and maturities of investments  1,921    582    3,144    1,113  Purchases of investments  (1,222 )   (474 )   (2,933 )   (1,223 ) Cash provided by (used in) investing activities  221    (149 )   (676 )   (596 ) Cash flows from financing activities:  Proceeds from issuance of commercial paper  100    100    300    200  Repayments of commercial paper  (100 )   (100 )   (300 )   (200 ) Proceeds from common stock issuances  129    119    129    119  Common stock repurchases  (1,670 )   (820 )   (2,988 )   (1,520 ) Tax withholding payments for vested equity awards  (35 )   (41 )   (177 )   (233 ) Payments of dividends to stockholders  (325 )   (266 )   (651 )   (532 ) Payments of debt issuance costs  (2 )   —    (2 )   —  Repayments of principal on finance leases  —    (14 )   —    (13 ) Cash used in financing activities  (1,903 )   (1,022 )   (3,689 )   (2,179 ) Increase (decrease) in cash, cash equivalents and restricted cash equivalents  (111 )   221    (1,869 )   942  Cash, cash equivalents and restricted cash equivalents—beginning of period  6,355    6,954    8,113    6,233  Cash, cash equivalents and restricted cash equivalents — end of period $ 6,244   $ 7,175   $ 6,244   $ 7,175   Reconciliation of cash, cash equivalents, and restricted cash equivalents  Cash and cash equivalents $ 6,169   $ 7,085   $ 6,169   $ 7,085  Restricted cash equivalents included in deferred income taxes and other assets  75    90    75    90  Total cash, cash equivalents, and restricted cash equivalents $ 6,244   $ 7,175   $ 6,244   $ 7,175   Supplemental cash flow information:  Cash payments for income taxes $ 763   $ 467   $ 833   $ 606  Cash refunds from income taxes $ 5   $ 3   $ 75   $ 5  Cash payments for interest $ 68   $ 68   $ 120   $ 102

Additional Information

Q2 FY2025  Q2 FY2024 Net Revenue by Geography (In millions)  United States $ 808   $ 853  % of Total  11 %   13 % Europe $ 252   $ 289  % of Total  4 %   4 % Japan $ 572   $ 453  % of Total  8 %   7 % Korea $ 1,562   $ 988  % of Total  22 %   15 % Taiwan $ 1,997   $ 1,019  % of Total  28 %   15 % Southeast Asia $ 135   $ 213  % of Total  2 %   3 % China $ 1,774   $ 2,831  % of Total  25 %   43 %  Employees(In thousands)  Regular Full Time  36.0    34.8

APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS  Three Months Ended  Six Months Ended (In millions, except percentages) April 27,
2025  April 28,
2024  April 27,
2025  April 28,
2024 Non-GAAP Gross Profit  GAAP reported gross profit $ 3,485   $ 3,153   $ 6,981   $ 6,357  Certain items associated with acquisitions1  6    7    13    14  Non-GAAP gross profit $ 3,491   $ 3,160   $ 6,994   $ 6,371  Non-GAAP gross margin  49.2 %   47.5 %   49.0 %   47.7 % Non-GAAP Operating Income  GAAP reported operating income $ 2,169   $ 1,912   $ 4,344   $ 3,879  Certain items associated with acquisitions1  11    10    23    21  Acquisition integration and deal costs  —    5    3    8  Non-GAAP operating income $ 2,180   $ 1,927   $ 4,370   $ 3,908  Non-GAAP operating margin  30.7 %   29.0 %   30.6 %   29.3 % Non-GAAP Net Income  GAAP reported net income $ 2,137   $ 1,722   $ 3,322   $ 3,741  Certain items associated with acquisitions1  11    10    23    21  Acquisition integration and deal costs  —    5    3    8  Realized loss (gain), dividends and impairments on strategic investments, net  (18 )   (3 )   (27 )   (4 ) Unrealized loss (gain) on strategic investments, net  (80 )   (20 )   26    (300 ) Foreign exchange loss (gain) related to purchase of strategic investment  23    —    23    —  Loss (gain) on asset sale  (44 )   —    (44 )   —  Income tax effect of share-based compensation2  4    11    (6 )   (15 ) Income tax effects related to intra-entity intangible asset transfers3  32    18    706    40  Resolution of prior years’ income tax filings and other tax items  (124 )   —    (140 )   33  Income tax effect of non-GAAP adjustments4  (1 )   1    —    2  Non-GAAP net income $ 1,940   $ 1,744   $ 3,886   $ 3,526

1  These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.  2  GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis.  3  Amount for the six months ended April 27, 2025, included changes to income tax provision of $62 million from amortization of intangibles and a $644 million remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore in the first quarter of fiscal 2025.  4  Adjustment to provision for income taxes related to non-GAAP adjustments reflected in income before income taxes.

APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS  Three Months Ended  Six Months Ended (In millions, except per share amounts) April 27,
2025  April 28,
2024  April 27,
2025  April 28,
2024 Non-GAAP Earnings Per Diluted Share  GAAP reported earnings per diluted share $ 2.63   $ 2.06   $ 4.08   $ 4.47  Certain items associated with acquisitions  0.01    0.01    0.02    0.02  Acquisition integration and deal costs  —    0.01    —    0.01  Realized loss (gain), dividends and impairments on strategic investments, net  (0.02 )   —    (0.03 )   —  Unrealized loss (gain) on strategic investments, net  (0.10 )   (0.02 )   0.03    (0.36 ) Foreign exchange loss (gain) related to purchase of strategic investment  0.03    —    0.03    —  Loss (gain) on asset sale  (0.05 )   —    (0.05 )   —  Income tax effect of share-based compensation  —    0.01    (0.01 )   (0.02 ) Income tax effects related to intra-entity intangible asset transfers1  0.04    0.02    0.87    0.05  Resolution of prior years’ income tax filings and other tax items  (0.15 )   —    (0.17 )   0.04  Non-GAAP earnings per diluted share $ 2.39   $ 2.09   $ 4.77   $ 4.21  Weighted average number of diluted shares  812    836    815    837

1  Amount for the six months ended April 27, 2025, included changes to income tax provision of $0.08 per diluted share from amortization of 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.

APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS  Three Months Ended  Six Months Ended (In millions, except percentages) April 27,
2025  April 28,
2024  April 27,
2025  April 28,
2024 Semiconductor Systems Non-GAAP Operating Income  GAAP reported operating income $ 1,900   $ 1,701   $ 3,886   $ 3,445  Certain items associated with acquisitions1  11    10    23    20  Non-GAAP operating income $ 1,911   $ 1,711   $ 3,909   $ 3,465  Non-GAAP operating margin  36.4 %   34.9 %   36.8 %   35.3 % Applied Global Services Non-GAAP Operating Income  GAAP reported operating income $ 446   $ 436   $ 893   $ 853  Non-GAAP operating income $ 446   $ 436   $ 893   $ 853  Non-GAAP operating margin  28.5 %   28.5 %   28.3 %   28.4 % Display Non-GAAP Operating Income  GAAP reported operating income $ 68   $ 5   $ 82   $ 30  Non-GAAP operating income $ 68   $ 5   $ 82   $ 30  Non-GAAP operating margin  26.3 %   2.8 %   18.6 %   7.1 %

1  These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.

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 corporate and other and included in consolidated operating income.

APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE  Three Months Ended (In millions, except percentages) April 27, 2025  GAAP provision for income taxes (a) $ 185  Income tax effect of share-based compensation  (4 ) Income tax effects related to intra-entity intangible asset transfers  (32 ) Resolutions of prior years’ income tax filings and other tax items  124  Income tax effect of non-GAAP adjustments  1  Non-GAAP provision for income taxes (b) $ 274   GAAP income before income taxes (c) $ 2,322  Certain items associated with acquisitions  11  Realized loss (gain), dividends and impairments on strategic investments, net  (18 ) Unrealized loss (gain) on strategic investments, net  (80 ) Foreign exchange loss (gain) related to purchase of strategic investment  23  Loss (gain) on asset sale  (44 ) Non-GAAP income before income taxes (d) $ 2,214   GAAP effective income tax rate (a/c)  8.0 %  Non-GAAP effective income tax rate (b/d)  12.4 %

UNAUDITED RECONCILIATION OF NON-GAAP FREE CASH FLOW  Three Months Ended  Six Months Ended (In millions) April 27,
2025  April 28,
2024  April 27,
2025  April 28,
2024 Cash provided by operating activities $ 1,571   $ 1,392   $ 2,496   $ 3,717  Capital expenditures  (510 )   (257 )   (891 )   (486 ) Non-GAAP free cash flow $ 1,061   $ 1,135   $ 1,605   $ 3,231

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