Applied Materials Inc. AMAT reported second-quarter fiscal 2025 non-GAAP earnings of $2.39 per share, which beat the Zacks Consensus Estimate by 3.5%. This company reported earnings of $2.09 per share a year ago.

AMAT reported revenues of $7.1 billion for the quarter ended April 2025, missing the Zacks Consensus Estimate by 0.28%. This top line increased from the year-ago quarter’s $6.65 billion.

AMAT shares have plunged 18.4% in the past year against the Zacks Electronics - Semiconductors industry’s growth of 20.7%.

AMAT’s Segments in Detail

Semiconductor Systems generated revenues worth $5.26 billion, which contributed 74.1% to its net revenues, reflecting growth of 7.2% from the year-ago quarter. The figure missed the Zacks Consensus Estimate of $5.3 billion.

Applied Materials, Inc. Price, Consensus and EPS SurpriseApplied Materials, Inc. Price, Consensus and EPS Surprise

Applied Materials, Inc. price-consensus-eps-surprise-chart | Applied Materials, Inc. Quote

Applied Global Services reported revenues of $1.57 billion (22.1% of net revenues), up 2.4% from the prior-year quarter. The figure surpassed the Zacks Consensus Estimate of $1.547 billion.

Revenues from Display and Adjacent Markets were $259 million (3.6% of net revenues), up 44.7% from the year-ago quarter. The figure beat the consensus estimate of $250.2 billion.

Corporate and Other revenues were $20 million (0.3% of revenues), down 44.4% year over year.

Revenues by Geography

Revenues in the United States, Europe, Japan, Korea, Taiwan, Southeast Asia and China were $808 million, $252 million, $572 million, $1.56 billion, $1.997 billion, $135 million and $1.774 billion, contributing 11%, 4%, 8%, 22%, 28%, 2% and 25% to net sales, respectively.

Revenues in Japan, Korea, and Taiwan increased 26.3%, 58.1% and 96%, respectively, from the year-ago quarter. Revenues in the United States and Southeast Asia decreased 5.3% and 36.6%, respectively. Revenues in Europe and China fell 12.8% and 37.4%, respectively, from the year-ago quarter.

Operating Results

The non-GAAP gross margin was 49.2%, which expanded 170 basis points (bps) from the year-ago quarter.

Operating expenses were $1.31 billion, up 6.3% from the year-ago quarter. As a percentage of sales, the figure contracted 10 bps from the year-earlier quarter to 18.5%.

The non-GAAP operating margin of 30.7% expanded 170 bps year over year.

Balance Sheet & Cash Flow of AMAT

As of April 27, 2025, cash, cash equivalent balances and short-term investments were $6.75 billion, down from $8.02 billion as of Jan. 28, 2025.
Inventories were $5.66 billion in the fiscal second quarter compared with $5.5 billion in first-quarter fiscal 2025. Accounts receivables increased to $6.19 billion from $5.9 billion in the previous quarter.

Story Continues

The long-term debt was $5.46 billion at the end of the quarter, which remained unchanged from the previous quarter.
Applied Materials generated a free cash flow of $1.06 billion, up from $544 million in the prior quarter.

AMAT returned $2.00 billion to its shareholders, of which share repurchases were worth $1.67 billion and dividend payments amounted to $325 million.

Guidance

For the fiscal third quarter, Applied Materials expects net sales of $7.2 billion (+/-$500 million). The Zacks Consensus Estimate is pegged at $7.21 billion.
Semiconductor Systems, AGS and Display sales are anticipated to be $5.40 billion, $1.55 billion and $250 million, respectively.

Applied Materials expects a non-GAAP gross margin of 48.3% and non-GAAP operating expenses of $1.34 billion. It projects a non-GAAP tax rate of 13%.
Management expects non-GAAP earnings per share of $2.35 (+/-$0.20). The Zacks Consensus Estimate is pegged at $2.32.

Zacks Rank and Stocks to Consider

Currently, AMAT carries a Zacks Rank #3 (Hold).

Amphenol APH, Juniper Networks JNPR and Upwork UPWK are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. APH, JNPR and UPWK sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

APH shares have gained 26.4% for the past year. The Zacks Consensus Estimate for APH’s full-year 2025 earnings is pegged at $2.62 per share, up by 4 cents over the past seven days, suggesting a growth of 38.6% from the year-ago quarter’s reported figure.

JNPR shares have gained 4.8% in the past year. The Zacks Consensus Estimate for JNPR’s full-year fiscal 2025 earnings has been revised upward to $2.09 in the past 30 days, suggesting year-over-year growth of 21.5%.

UPWK shares have gained 38% over the past year. The Zacks Consensus Estimate for UPWK’s full-year 2025 earnings is pegged at $1.14 per share, implying a rise of 9.62% from the year-ago quarter’s levels.

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