Applied Materials, Inc. (AMAT)

Business

From the fiscal 2025 Form 10-K, accession 0001628280-25-056742.

Applied Materials supplies the materials engineering equipment, services and software used to manufacture semiconductors. It designs, develops, manufactures and services the wafer fabrication tools chipmakers use to convert patterns into device structures, build transistors and interconnects, inspect and measure them, and package finished die. Its customers' output goes into personal computing, mobile phones, AI and data center servers, automobiles, connected devices, industrial applications and consumer electronics. Incorporated in Delaware in 1967, its fiscal year ends on the last Sunday in October.

Segments. Applied reports two segments: Semiconductor Systems and Applied Global Services (AGS).

• Semiconductor Systems, capital equipment for etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging and ion implantation. It is by a wide margin the largest revenue contributor. Sales are tracked against three end markets: foundry, logic and other (split between leading edge, defined as 7 nanometers and smaller, and non-leading-edge nodes serving IoT, communications, automotive, power and sensors); DRAM; and NAND flash.
• Applied Global Services, services, spares and factory automation software sold into the installed base of semiconductor and other equipment, delivered through a global distribution system and field engineers stationed near customer sites. The strategy is to shift service and spares toward a subscription agreement model for a more predictable revenue stream.
• Residual businesses, operating segments that do not meet the reportable-segment threshold, principally the display business. In the fiscal 2025 Form 10-K these were reported as "Corporate and Other." Management concluded as of October 26, 2025 that Display was no longer a significant operating segment for separate reporting, and prior-year Corporate and Other balances were recast to include Display.

Fiscal 2026 segment recast. Effective the first quarter of fiscal 2026, Applied moved its 200 millimeter (200mm) equipment business out of AGS and into Semiconductor Systems, and began fully allocating corporate support costs to the reportable segments. Prior-period segment balances were recast to conform. In the Form 10-Q the residual category is now labeled simply "Other." Restructuring charges, including severance and asset impairments, remain unallocated to the reportable segments unless they pertain to a specific segment, as do interest and income taxes.

Fiscal 2025 segment mix (10-K):

Semiconductor Systems fiscal 2025 revenue by market was 67% foundry, logic and other; 26% DRAM; 7% NAND.

Backlog. As of October 26, 2025, total backlog was $15,002 million, Semiconductor Systems $7,105 million (47%), AGS $7,141 million (48%), Corporate and Other $756 million (5%). Approximately 31% of that total was not reasonably expected to be filled within the next 12 months. Backlog is defined as accepted written order authorizations (or shipments not yet recognized as revenue) plus contractual service revenue and maintenance fees, and is explicitly not treated as indicative of future sales given cancellations, amendments and changes in export rules.

Customer and geographic concentration. In fiscal 2025, two customers accounted for approximately 19% and 15% of net revenue, and roughly 89% of net revenue came from customers outside the United States. Regional mix in fiscal 2025: China $8,529M (30%, down 16% year over year), Taiwan $6,857M (24%, up 71%), Korea $5,608M (20%, up 25%), Japan $2,273M (8%), Southeast Asia $1,076M (4%), United States $3,063M (11%, down 20%), Europe $962M (3%, down 33%).

Competition and go-to-market. Products are marketed and sold almost entirely through a direct sales force because of their technical nature. Competitors range from single-product regional firms to global diversified equipment makers. The 10-K explicitly flags increased competition from domestic Chinese equipment manufacturers benefiting from local incentives and funding, and notes that U.S. export controls restricting sales into China can also advantage non-U.S. competitors. In AGS, competition includes third-party service providers and customers that self-service.

Operations, R&D and IP. Manufacturing follows a distributed model across the United States, Singapore, Japan, China, Korea, Taiwan, Israel and other countries in Asia and Europe, and consists primarily of assembly, integration and test. Some key parts are single-sourced or available only from a limited group of qualified suppliers. Product development and engineering is performed primarily in the United States, India and Israel; customer demonstrations primarily in the United States, China, Taiwan, Israel and South Korea. Applied holds more than 23,500 active patents worldwide, and states it is not materially dependent on any single patent. As of October 26, 2025 the company employed approximately 36,500 regular full-time employees across 25 countries, approximately 46% in Asia-Pacific, 42% in North America and 12% in Europe/Middle East.

Risk factors

Condensed from the fiscal 2025 Form 10-K (accession 0001628280-25-056742) and the risk factors as updated in the Form 10-Q, accession 0001628280-26-058235. The 10-Q's risk factors supersede the 10-K's where they differ; the differences are noted below.

Cyclicality and demand forecasting. The semiconductor industry is historically cyclical. Demand turns on technology inflections, customers' capacity utilization and the timing of fab investment. AI is singled out as a significant demand driver whose timing and magnitude are hard to forecast, the 10-Q sharpens this, adding that failure to meet the level of customer demand "may result in a loss of business or customer trust," and that the company may incur costs in anticipation of demand that is never realized or sustained. Gross and operating margins can be pressured in either direction of a demand swing.

Export controls and China. This is the company's most concrete, already-realized risk. Successive U.S. rules have expanded export license requirements for semiconductor technology sold into China, added Chinese entities to the Entity List, and eliminated license exceptions, the 10-K states these have already "limited the market for certain of our products and services, adversely impacted our revenues and increased our exposure to foreign and Chinese domestic competition." Licenses may not be granted on a timely basis or at all. Since 2022 the company has received multiple subpoenas relating to China customer shipments and export controls compliance from the Department of Justice, the Commerce Department's Bureau of Industry and Security (BIS) and the SEC, plus subpoenas relating to certain federal award applications. That BIS matter has since been settled (see Regulatory and legal, below); the 10-Q risk factors now carry the settlement's ongoing condition, failure to comply with its terms "could result in significant penalties, including the loss of the suspension of the denial order which would prohibit us from exporting certain of our products outside of the United States."

Tariffs and trade disputes. Announced U.S. tariff increases have drawn retaliatory measures, followed by partial exemptions, pauses and country frameworks. Tariffs raise input costs and the cost to customers of importing Applied's tools, complicate the supply chain and can delay customer capital plans. The 10-K specifically flags Chinese export controls on rare earth minerals implemented in 2025 that are used in certain of Applied's products.

Customer concentration. A small number of customers drive a substantial share of revenue, concentrated geographically in China, Taiwan and Korea. Products are configured to customer specification, so changed, rescheduled or cancelled orders create significant non-recoverable costs.

Supply chain. Single- or limited-source parts, transportation interruptions, export-license delays for imports, cybersecurity incidents at suppliers, and limited availability of critical materials (including rare earths and regulated substances such as hydrofluorocarbons and PFAS) can interrupt manufacturing, raise costs, or leave excess and obsolete inventory if forecast demand fails to materialize.

Competition and technology transitions. Innovation cycles are short and capital-intensive; failure to secure development-tool-of-record and production-tool-of-record positions, or to anticipate an inflection, can cost market position durably. The 10-Q adds an explicit execution risk on completing the new Equipment and Process Innovation and Commercialization Center (EPIC) and other major infrastructure projects on schedule and on budget and realizing their anticipated benefits.

Taxes. OECD-based global minimum tax regimes began taking effect in fiscal 2025; the 10-Q states the currently enacted legislation materially increases foreign taxes beginning in the first quarter of fiscal 2026, primarily because of Singapore's implementation. The One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, accelerates tax deductions in a way that impaired the company's ability to use its corporate alternative minimum tax (CAMT) credit deferred tax asset, against which a full valuation allowance was recorded in fiscal 2025. Conditional reduced tax rates in Singapore begin expiring in fiscal 2030 and may not be renewed.

Indebtedness. $6.5 billion of senior unsecured notes were outstanding as of both October 26, 2025 and July 26, 2026, with a change-of-control-plus-downgrade repurchase obligation at 101% of principal. Revolving capacity was approximately $4.1 billion at fiscal 2025 year end and approximately $4.0 billion at July 26, 2026, undrawn in both cases.

Acquisitions, investments and divestitures. A long risk list covering failure to close, regulatory conditions including post-closing review of non-notified transactions, integration failure, goodwill and intangible impairment, and undisclosed liabilities. Applied also holds minority equity investments, including in joint ventures, whose value depends on factors outside its control.

Other named risks. Intellectual property enforcement in jurisdictions with weaker protection; cybersecurity incidents across IT and operational technology systems, with AI and quantum computing named as escalating threat vectors; goodwill and long-lived asset impairment; dependence on key employees; the discretionary nature of dividends and buybacks; display-industry volatility; risks from government incentive agreements with investment, capital-spending and milestone conditions whose breach can trigger clawback, debarment or penalties; sustainability commitments and the California, EU CSRD and ISSB disclosure regimes; and environmental, health and safety regulation. The 10-Q adds a standalone risk on the company's own use of AI, cost, flawed outputs, IP leakage, reliance on third-party AI providers, and prospective AI regulation.

Management's discussion, fiscal 2025

From the fiscal 2025 Form 10-K, accession 0001628280-25-056742. Fiscal 2025 and fiscal 2024 each contained 52 weeks.

Revenue set a record and gross margin expanded on higher volume, favorable customer and product mix, higher average selling prices and lower material and manufacturing costs. Semiconductor Systems grew as customers invested in new capacity and technology transitions, with foundry and logic driven by leading-edge spending and memory driven by NAND fabrication equipment upgrades. AGS grew on long-term service agreements and spares, partly offset by lower 200mm equipment spending.

Operating expenses. RD&E $3,570M (up $337M on headcount for product development and higher depreciation); marketing and selling $858M (up $22M on employee costs); G&A $910M (down $51M on lower professional services, partly offset by a $41 million goodwill impairment recognized in the fourth quarter); restructuring charges $181M (nil in fiscal 2024).

Restructuring. In the fourth quarter of fiscal 2025 the Board approved a workforce reduction plan (the Fiscal 2025 Restructuring Plan) expected to affect approximately 4% of the global workforce. $181 million of charges, primarily cash severance and other termination benefits, plus non-cash items, were recognized in that quarter, with completion expected in fiscal 2026. In a Form 8-K filed October 23, 2025 (accession 0001628280-25-046107) the company had estimated total charges of $160 million to $180 million.

Below the line. Interest expense $269M (up $22M following the June 2024 note issuance). Interest and other income, net $1,251M versus $532M, driven by higher net gains on equity investments and partly offset by lower interest income on lower cash balances and falling market rates.

Taxes. Provision $2,273M at a 24.5% effective rate, versus $975M and 12.0% in fiscal 2024. The 12.5-point increase came from a $659 million remeasurement of deferred tax assets following new Singapore tax incentive agreements and a $407 million valuation allowance against CAMT credit deferred tax assets that are no longer expected to be realized after OBBBA. This is why net income fell despite record revenue and higher operating income.

Segment profit. Semiconductor Systems operating income $7,379M at a 35.5% margin (up 0.4 points); AGS $1,792M at 28.1% (down 1.0 point, on lower 200mm equipment revenue, higher headcount cost and higher excess-and-obsolete inventory charges); Corporate and Other a $(882)M loss.

Cash and capital. Operating cash flow was $8.0 billion, down year over year on higher income tax and inventory payments. Investing used $2.8 billion, including $2.3 billion of capital expenditures (versus $1.2 billion in fiscal 2024), $526 million of net investment purchases, $29 million net cash paid for an acquisition and $33 million of net asset-sale proceeds. Financing used $6.0 billion: $4.9 billion of buybacks, $1.4 billion of dividends, repayment of $700 million of senior notes and $248 million of tax withholding on vested equity, offset by $991 million of net proceeds from new senior notes and $261 million from employee stock purchases. Working capital was $12.9 billion; days sales outstanding 69 days versus 68. The company sold $501 million of accounts receivable during fiscal 2025 ($444 million in fiscal 2024).

Balance sheet obligations at October 26, 2025. $6.5 billion of senior unsecured notes with $2.9 billion of future interest ($246 million due within 12 months); $10.6 billion of purchase obligations ($7.3 billion within 12 months); $565 million of operating lease obligations; $100 million of commercial paper outstanding under a program increased to $4.0 billion during the fourth quarter; a final $255 million Tax Act transition-tax installment payable in February 2026; and a $452 million gross unrecognized tax benefit liability not expected to be paid within a year. CHIPS Act investment tax credits had reduced current income taxes payable by $233 million with a further $548 million to reduce future payables. In March 2025 the Board authorized an additional $10.0 billion of buybacks, leaving approximately $14.0 billion available at fiscal year end.

Current quarter, Q3 fiscal 2026

From the Form 10-Q for the quarter ended July 26, 2026, accession 0001628280-26-058235, and the earnings release furnished as Exhibit 99.1 to the Form 8-K filed August 13, 2026, accession 0001628280-26-056699. Fiscal 2026 and 2025 each contain 52 weeks; the first nine months of each contained 39 weeks.

Revenue was a record. The earnings release described it as the highest sequential revenue growth in company history and the 13th consecutive quarter of year-over-year gross margin expansion. On a non-GAAP basis the quarter produced gross margin of 50.4%, operating income of $3.10 billion (34.0% margin), net income of $2,795 million and EPS of $3.50, with free cash flow of $2,330 million. The $257 million gap between GAAP net income of $2,538 million and non-GAAP net income is set out in the earnings release reconciliation and is dominated by investment marks and tax items rather than operating costs: $220 million of unrealized loss on strategic investments and $(7) million of realized gains, dividends and impairments on them; $16 million of amortization of purchased intangibles attributable to completed acquisitions (of which $11 million sits in cost of products sold, the whole of the 0.1-point gross margin difference) and $5 million of acquisition integration and deal costs; and, on the tax side, $33 million related to intra-entity intangible asset transfers, $10 million for ratable recognition of the share-based compensation tax benefit, $(46) million from resolution of prior years' tax filings and other tax items, and a $26 million tax effect of the non-GAAP adjustments themselves. There were no restructuring or legal settlement add-backs in the quarter, both fall in the nine-month figures only. Operating cash flow of $3.04 billion was a record, and $860 million was returned to shareholders, $440 million of cash paid for share repurchases and $420 million of dividends.

By segment (recast presentation; the residual category is now "Other"):

Semiconductor Systems' margin rose 4.7 points year over year on higher revenue, favorable product mix, higher average selling prices and lower material and manufacturing costs, partly offset by higher RD&E. AGS' margin rose 2.8 points on higher services and spares revenue and favorable mix. For the nine months, Semiconductor Systems revenue was $18,146M with $6,176M of operating income (34.0% margin) and AGS $5,005M with $1,461M (29.2%); the Other category's operating loss widened to $(208)M from $(16)M, reflecting the fiscal 2026 change in corporate cost allocation as well as the unallocated restructuring charge.

Semiconductor Systems by market. Q3 FY2026: foundry, logic and other 67% (from 69%); DRAM 26% (from 22%); NAND 7% (from 9%). Nine months: 65% / 29% / 6%. Foundry and logic strength came from leading-edge demand; for the nine months this was partly offset by weaker trailing-edge logic. Memory strength came from DRAM technology transitions.

By geography (Q3): Taiwan $2,025M (22%, +10%), China $2,506M (28%, −2%), Korea $1,521M (17%, +31%), Japan $839M (9%, +18%), Southeast Asia $374M (4%, +92%), United States $1,367M (15%, +100%), Europe $483M (5%, +202%). Asia Pacific in aggregate was 80% of revenue, down from 89% a year earlier. Approximately 85% of quarterly revenue came from customers outside the United States. Two customers accounted for approximately 20% and 14% of nine-month revenue.

Operating expenses. Q3: RD&E $1,100M (up $199M), marketing and selling $249M (up $25M), G&A $162M (down $42M on lower corporate support costs), no legal settlement or restructuring charge in the quarter. Nine months: RD&E $3,055M, marketing and selling $704M, G&A $515M, legal settlement $253M, restructuring $12M.

Below the line. Q3 interest expense $68M; interest and other income (expense), net was $(100)M versus $396M a year earlier, driven by higher unrealized losses on equity investments. For the nine months that line was a positive $1,237M versus $625M, driven by higher net unrealized gains on equity investments, a volatile, mark-to-market contributor to reported earnings in both directions.

Taxes. Q3 provision $369M at a 12.7% effective rate versus $784M and 30.6% a year earlier; nine months $1,090M at 12.9% versus $1,903M and 27.2%. Both declines are against prior-year comparatives inflated by the fiscal 2025 CAMT valuation allowance and, for the nine-month figure, the Singapore deferred tax remeasurement. The effective rate is therefore flattered by base effects rather than by a structural rate reduction, and the company separately states that enacted global minimum tax rules materially increase its foreign taxes beginning in fiscal 2026.

Restructuring. The Fiscal 2025 Restructuring Plan is essentially wound down. $12 million of severance and other employee-related charges were recognized in the first nine months of fiscal 2026 (none in Q3). The reserve fell from $165 million at October 26, 2025 to $12 million at July 26, 2026, with $139 million consumed in the first quarter, $16 million in the second and $11 million in the third. One inconsistency within the filing is worth noting: the Note 10 reserve rollforward records $13 million of restructuring charges in the first quarter, $1 million more than the $12 million shown on the income statement, in the Note 10 charge table, in management's discussion and in the segment allocation. The $12 million figure is the one carried everywhere else, and the rollforward's own arithmetic only foots on the $13 million charge: $165 million opening, plus $13 million of charges, less $139 million, $16 million and $11 million consumed, gives the $12 million closing balance; on a $12 million charge it would close at $11 million.

Balance sheet and liquidity at July 26, 2026. Cash, cash equivalents and investments totaled $14,501M (from $12,900M at October 26, 2025): cash and equivalents $7,037M, short-term investments $2,196M, long-term investments $5,268M. Accounts receivable rose to $7,691M from $5,185M, with days sales outstanding at 77 days versus 72 a year earlier, attributed to higher down-payment invoices on revenue not yet recognized and less receivable factoring. Inventories were $6,564M. Total assets $43,522M; total stockholders' equity $25,626M. Contract liabilities rose to $3,271M from $2,566M; contract assets were $227M. Remaining unsatisfied performance obligations on contracts with an original duration of one year or more were approximately $1.0 billion, roughly 73% expected within 12 months. Working capital was $14.7 billion.

Debt. Senior unsecured notes remained $6.5 billion of principal, but $1.2 billion of 3.300% notes due 2027 moved into the current portion, leaving $5.3 billion long-term. $100 million of commercial paper was outstanding at a 3.78% weighted-average rate. Revolving capacity of approximately $4.0 billion, a $2.0 billion five-year facility expiring February 2030, a $2.0 billion 364-day facility expiring September 2026, and approximately $49 million of Japanese bank facilities, was entirely undrawn, and the company was in compliance with the facility covenants.

Cash flows, nine months. Operating activities provided $5,568M (versus $5,130M), on higher net income and lower income tax payments, partly offset by higher receivables and vendor payments. Investing used $3,152M: $2.0 billion of capital expenditures, $908 million of net investment purchases and $262 million of net cash paid for acquisitions ($87 million of that in Q3 alone), against $6 million of asset-sale proceeds. Financing used $2,634M: $1.2 billion of buybacks, $1.2 billion of dividends, $437 million of tax withholding on vested equity and $1 million of net commercial paper repayment, offset by $131 million of employee stock purchase proceeds. Approximately $12.8 billion remained available under the repurchase authorization.

Capital returns. Quarterly dividends of $0.46 (declared December 2025), $0.53 (March 2026) and $0.53 (June 2026) per share; the June declaration is payable in September 2026. Nine-month dividends paid were $1.2 billion. On repurchases, the 10-Q reports the cost of stock repurchased in Q3 at $400 million including excise tax, at an average price paid per share of $455.43 including excise tax, implying roughly 0.9 million shares, which the note rounds to 1 million, versus $1,038 million at an average $164.47 (6 million shares) a year earlier. That $400 million trade-date cost basis differs from the $440 million of cash paid for repurchases in the quarter reported in the earnings release's financing activities, and neither filing explains the $40 million difference. A settlement lag does not account for it: the note's nine-month cost of $1,137 million less the $400 million recorded in the third quarter leaves $737 million for the first six months, and the second-quarter fiscal 2026 earnings release (accession 0001628280-26-035071) reports cash paid for repurchases over those six months of exactly $737 million, so no unsettled balance was carried into the third quarter, and cash paid could not exceed recorded cost on that basis. Capital expenditures remain elevated at $707 million in the quarter and approximately $2.0 billion for the nine months, of which $1,563 million, the nine-month, not the quarterly, figure, sat in the Other category, reflecting corporate infrastructure build rather than segment capacity. Capital-expenditure-related government incentives had reduced gross property, plant and equipment by $1.8 billion as of July 26, 2026, and $1.2 billion of investment tax credits were recorded on the balance sheet, of which $41 million offsets fiscal 2026 tax liabilities and $1.2 billion is expected to be refunded in cash.

Outlook. For the fourth quarter of fiscal 2026 the company guided to total revenue of $10.25 billion plus or minus $500 million and non-GAAP diluted EPS of $4.02 plus or minus $0.20. That EPS outlook excludes $0.01 per share of known acquisition-related charges, includes a $0.01 normalized share-based compensation tax benefit and includes a $0.05 net income tax benefit related to intra-entity intangible asset transfers. Management said it was raising its Semiconductor Systems revenue expectations for calendar 2026, expected to grow faster than the market this year, expected another strong growth year in 2027, and expected second-half calendar strength particularly in DRAM, leading-edge foundry-logic and advanced packaging. The CFO also flagged additional manufacturing capacity investments to support projected demand through the end of the decade. Announced alongside the quarter: EPIC Center R&D partnerships expanded to 11 engagements, adding Broadcom, UC Berkeley and SCREEN Semiconductor Solutions; a US$500 million Tampines Campus in Singapore more than doubling advanced cleanroom capacity there; a long-term joint development agreement with EssilorLuxottica for intelligent optical systems; and six new chipmaking systems for DRAM and advanced packaging.

Regulatory and legal

BIS export-controls settlement. On February 11, 2026 Applied entered into a settlement agreement with the Commerce Department's Bureau of Industry and Security resolving its inquiry into certain China customer shipments and export controls compliance. The Form 10-Q (Note 13, Legal Matters) states the company agreed to pay BIS $253 million, which it paid in full during the second quarter of fiscal 2026, and must conduct internal audits of its export controls compliance program and maintain export compliance training and reporting mechanisms. The settlement includes a denial order that is suspended and will be waived three years after the date of the order, provided the audit requirements are timely completed, meaning the export-license consequence remains contingent on continued compliance rather than fully resolved. The charge was recorded as a $253 million legal settlement expense in the first nine months of fiscal 2026, allocated to the Semiconductor Systems segment. The Form 8-K filed February 12, 2026 (accession 0001628280-26-007444) reported the settlement amount as $252.5 million and stated that the Department of Justice and the SEC, which had also been investigating, closed their related inquiries without enforcement action.

BIS Affiliates Rule. In a Form 8-K filed October 2, 2025 (accession 0001628280-25-043753), Applied disclosed that a BIS rule issued September 29, 2025 expanding the list of companies subject to U.S. export restrictions would further restrict its ability to export certain products and supply parts and services to specific China-based customers without a license. The company estimated the rule would reduce net revenue by approximately $110 million in the fourth quarter of fiscal 2025 and by approximately $600 million in fiscal 2026. Neither the Form 10-K nor the Form 10-Q updates or quantifies that estimate; the 10-Q's discussion of export regulation is qualitative. Against that backdrop, China revenue of $2,506 million in the quarter was down 2% year over year while total revenue rose 25%, and China fell from 35% to 28% of revenue.

Other legal matters. Both the 10-K and 10-Q state that the company does not believe the matters described in its Legal Matters note will have a material effect on consolidated financial condition or results of operations. As of October 26, 2025 the 10-K disclosed continuing subpoenas from the Department of Justice, BIS and the SEC relating to China customer shipments and export controls compliance, and separate Department of Justice subpoenas relating to certain federal award applications and information submitted to the federal government. The 10-Q's Legal Matters note no longer describes those subpoenas separately; it describes the BIS settlement.

Subsequent events

Applied Materials does not present a subsequent-events note. Neither the Form 10-Q for the quarter ended July 26, 2026 (accession 0001628280-26-058235) nor the fiscal 2025 Form 10-K (accession 0001628280-25-056742) contains one, the 10-Q's notes run from Note 1 through Note 14 (Industry Segment Operations) with no subsequent-events disclosure, and the 10-K's run through Note 15. There is accordingly no disclosed post-period acquisition, divestiture, financing, borrowing or litigation outcome from the company itself for the period between July 26, 2026 and the August 20, 2026 filing date. What is on the record for that window, and what remains open as of the filing date:

• Third-quarter results and fourth-quarter guidance were furnished on August 13, 2026 (accession 0001628280-26-056699), after the quarter closed: Q4 FY2026 revenue guidance of $10.25 billion ± $500 million and non-GAAP diluted EPS of $4.02 ± $0.20, with the Semiconductor Systems calendar-2026 revenue outlook raised. No new financing, acquisition or litigation development was announced with those results.
• Declared dividend payable after period end. The $0.53 per share quarterly dividend declared in June 2026 is payable in September 2026; $421 million of dividends payable sat on the July 26, 2026 balance sheet.
• The 364-day revolving credit agreement expires in September 2026, shortly after the filing date. It was undrawn at July 26, 2026. If loans were outstanding at maturity the company may convert them to term loans maturing September 2027, subject to a fee.
• NEXX acquisition from ASMPT, signed, no closing confirmed in the filings. In the earnings release furnished with the Form 8-K filed May 14, 2026 (accession 0001628280-26-035071, Exhibit 99.1) Applied disclosed that it had "entered into an agreement with ASMPT Limited to acquire its NEXX business, a leading supplier of large-area advanced packaging deposition equipment for the semiconductor industry," intended to broaden its panel-level advanced packaging portfolio. No purchase price was disclosed. The transaction is not mentioned anywhere in the Form 10-Q, not in the notes, not in management's discussion, and not in the August 13, 2026 third-quarter earnings release. The 10-Q contains no business-combination note. What the 10-Q does disclose is that net cash paid for acquisitions was $262 million for the nine months ended July 26, 2026, of which $87 million was paid in the third quarter (per the cash flow statement in the third-quarter earnings release), that goodwill rose to $3,873 million from $3,707 million at October 26, 2025, and that purchased technology and other intangible assets, net rose to $315 million from $226 million. The third-quarter earnings release adds two further signs of acquisition activity inside the period without naming a target: its GAAP-to-non-GAAP reconciliation adds back $5 million of acquisition integration and deal costs in the quarter ($8 million for the nine months, against $1 million and $4 million in the year-earlier periods), and the fourth-quarter outlook excludes $0.01 per share of known charges related to completed acquisitions. The company does not attribute any of those amounts to a named target, so the status of the NEXX transaction as of the August 20, 2026 filing date cannot be established from the filings, it has been announced as signed and has not been reported as closed.

Filings that contain financial statements

The primary financial statements for the periods covered here are filed in the Form 10-K for fiscal 2025 (accession 0001628280-25-056742) and the Form 10-Q for the quarter ended July 26, 2026 (accession 0001628280-26-058235). Applied Materials also furnishes its unaudited quarterly (and Q4/full-year) results, including condensed consolidated statements of operations, balance sheets and cash flows, in the Exhibit 99.1 press release attached to each quarterly-earnings Form 8-K; these six exhibits carry condensed quarterly figures used where a Form 10-Q presents only year-to-date columns:

• Q3 FY2026 (quarter ended July 26, 2026): 8-K filed August 13, 2026, accession 0001628280-26-056699 (Exhibit 99.1).
• Q2 FY2026 (quarter ended April 26, 2026): 8-K filed May 14, 2026, accession 0001628280-26-035071 (Exhibit 99.1).
• Q1 FY2026 (quarter ended January 25, 2026): 8-K filed February 12, 2026, accession 0001628280-26-007661 (Exhibit 99.1).
• Q4 and full fiscal year 2025 (quarter/year ended October 26, 2025): 8-K filed November 13, 2025, accession 0001628280-25-051998 (Exhibit 99.1).
• Q3 FY2025 (quarter ended July 27, 2025): 8-K filed August 14, 2025, accession 0000006951-25-000032 (Exhibit 99.1).
• Q2 FY2025 (quarter ended April 27, 2025): 8-K filed May 15, 2025, accession 0000006951-25-000017 (Exhibit 99.1).

Earnings and guidance

Q3 FY2026 (reported August 13, 2026; accession 0001628280-26-056699). Applied Materials reported record quarterly revenue of $9.12 billion, up 25% year over year, with GAAP EPS of $3.17 and record non-GAAP EPS of $3.50. GAAP operating margin was 33.7%. The company generated record operating cash flow of $3.04 billion and returned $860 million to shareholders ($440 million in buybacks, $420 million in dividends). Management raised its Semiconductor Systems revenue outlook for calendar 2026 and guided Q4 FY2026 revenue to $10.25 billion (+/- $500 million) and non-GAAP EPS to $4.02 (+/- $0.20).

Q2 FY2026 (reported May 14, 2026; accession 0001628280-26-035071). Revenue reached a record $7.91 billion, up 11% year over year, with record GAAP EPS of $3.51 and record non-GAAP EPS of $2.86. The company raised its quarterly dividend 15%, from $0.46 to $0.53 per share, its ninth consecutive year of dividend increases. It also disclosed it had entered into an agreement with ASMPT Limited to acquire ASMPT's NEXX business, a supplier of large-area advanced packaging deposition equipment, to broaden its panel-level advanced packaging portfolio. Guidance for Q3 FY2026 was $8.95 billion (+/- $500 million) revenue and $3.36 (+/- $0.20) non-GAAP EPS.

Q1 FY2026 (reported February 12, 2026; accession 0001628280-26-007661). Revenue was $7.01 billion, down 2% year over year, with GAAP EPS of $2.54 (up 75%, aided by a year-earlier tax item) and non-GAAP EPS flat at $2.38. Results included the $253 million charge for the BIS export-controls settlement described below. Guidance for Q2 FY2026 was $7.65 billion (+/- $500 million) revenue and $2.64 (+/- $0.20) non-GAAP EPS.

Q4 and full fiscal year 2025 (reported November 13, 2025; accession 0001628280-25-051998). Fiscal 2025 revenue was a record $28.37 billion, up 4% year over year, with record GAAP EPS of $8.66 and record non-GAAP EPS of $9.42. Fourth-quarter revenue was $6.80 billion, down 3% year over year; GAAP EPS was $2.38, non-GAAP EPS $2.17. The quarter's results absorbed $181 million of restructuring charges tied to the workforce reduction described below. Guidance for Q1 FY2026 was $6.85 billion (+/- $500 million) revenue and $2.18 (+/- $0.20) non-GAAP EPS.

Q3 FY2025 (reported August 14, 2025; accession 0000006951-25-000032). and Q2 FY2025 (reported May 15, 2025; accession 0000006951-25-000017) were routine quarterly earnings announcements; no guidance change, restructuring or legal item was called out beyond normal segment results.

Regulatory and legal

BIS export-controls settlement (February 11, 2026; accession 0001628280-26-007444). Applied Materials entered into a settlement agreement with the U.S. Commerce Department's Bureau of Industry and Security (BIS) resolving allegations that certain customer shipments to China between November 2020 and July 2022 did not comply with U.S. export regulations. The company agreed to pay $252.5 million to BIS and to conduct internal export-compliance audits. The Department of Justice and the SEC, which had also been investigating the matter, notified the company that they had closed their related inquiries without taking enforcement action. The associated $253 million charge was recorded in the fiscal first quarter of 2026.

Expanded China export restrictions (October 2, 2025; accession 0001628280-25-043753). Following a new Bureau of Industry and Security rule (the "BIS Affiliates Rule") issued September 29, 2025 that expanded the list of China-based entities subject to U.S. export restrictions, Applied Materials estimated the rule would reduce net revenue by approximately $110 million in its fiscal fourth quarter of 2025 and by approximately $600 million in fiscal 2026.

Capital structure and financing

Revolving credit facility (September 25, 2025; accession 0001628280-25-042933). Applied Materials entered into a new 364-day, $2.0 billion unsecured revolving credit agreement with Bank of America, N.A. as administrative agent, expandable to $3.0 billion, maturing September 24, 2026 (with a one-year term-loan conversion option). No borrowings had been made under the facility as of the filing date.

Senior notes offering (September 18, 2025 (offering completed); underwriting agreement September 15, 2025; accession 0001193125-25-209109). Applied Materials completed a registered offering of $550 million of 4.000% senior unsecured notes due 2031 and $450 million of 4.600% senior unsecured notes due 2036. Proceeds were intended partly to repay, at maturity, the company's outstanding $700 million of 3.900% senior notes due October 1, 2025, with the remainder for general corporate purposes.

Workforce and restructuring

Workforce reduction plan (October 23, 2025; accession 0001628280-25-046107). Applied Materials approved a global workforce reduction affecting approximately 4% of its workforce, expecting to incur $160 million to $180 million in charges, mainly severance and other termination benefits. Most charges were expected in the fiscal fourth quarter of 2025, with completion targeted for the fiscal first quarter of 2026, subject to local legal requirements.

Board and governance

Annual meeting results (March 12, 2026; accession 0001193125-26-106339). Shareholders elected all ten director nominees, approved (on an advisory basis) named-executive compensation for fiscal 2025, and ratified KPMG LLP as independent auditor for fiscal 2026.

Director resignation (September 12, 2025; accession 0001193125-25-202820). Yvonne McGill resigned from the Board of Directors effective September 12, 2025; the filing states the resignation was not due to any disagreement with the company.

Director appointment (July 18, 2025; accession 0001193125-25-162237). James R. Anderson, CEO of Coherent Corp. and former CEO of Lattice Semiconductor, was elected to the Board and its Strategy and Investment Committee.

Strategic investment

EPIC Center research and industry partnerships (Q1–Q3 FY2026 earnings releases). Applied Materials disclosed a series of engagements tied to its new EPIC Center in Silicon Valley, designed to accelerate commercialization of next-generation semiconductor technologies. Samsung Electronics was announced as the first partner (Q1 FY2026 release, accession 0001628280-26-007661). The company then added innovation and research partnerships with TSMC, SK hynix, Micron and Advantest, plus inaugural research partners Arizona State University, Rensselaer Polytechnic Institute and Stanford University (Q2 FY2026 release, accession 0001628280-26-035071). In the third quarter it announced three more partnerships, Broadcom, the University of California, Berkeley, and SCREEN Semiconductor Solutions, bringing the total to 11 EPIC Center engagements; it also disclosed a US$500 million expansion of its Tampines Campus in Singapore to more than double advanced cleanroom capacity there, and a long-term joint development agreement with EssilorLuxottica to commercialize next-generation AI-powered smart eyewear optics (Q3 FY2026 release, accession 0001628280-26-056699).

Investment in BE Semiconductor Industries (April 14, 2025; accession 0001193125-25-080269). Applied Materials purchased 9% of the outstanding shares of BE Semiconductor Industries N.V. (Besi) through market transactions, building on an existing collaboration on hybrid-bonding technology for advanced packaging. The company stated the purchase was not subject to regulatory approval and that it did not intend to seek board representation at Besi or purchase additional shares.

Notes on pending items

The NEXX acquisition from ASMPT Limited, disclosed only as "entered into an agreement to acquire" in the Q2 FY2026 earnings release, was not restated as completed in any subsequent quarterly release or in the most recent quarterly report; no separate 8-K announcing signing or closing of that transaction has been filed to date.

About this file

AMAT annual income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

• Source form, FY2025. 10-K filed 2025-12-12
• Source form, FY2024. 10-K filed 2025-12-12 (prior-year comparative columns)
• Source form, FY2023. 10-K filed 2025-12-12 (earliest comparative column on the income statement and cash flow statement)
• Balance sheet: note, FY2023. The FY2025 10-K (accession 0001628280-25-056742) presents balance sheets only as of October 26, 2025 and October 27, 2024, so fiscal 2023 total assets and total debt are not available from that filing. The fiscal 2023 balance-sheet amounts it does disclose are included above: cash and cash equivalents from the cash-flow statement's cash reconciliation; accounts receivable, inventories and goodwill from the segment note's fiscal 2023 table; and total stockholders' equity and period-end shares outstanding from the consolidated statements of stockholders' equity, which roll forward from October 30, 2022 and show a balance at October 29, 2023 of $16,349 million of total equity on 833 million shares outstanding.

AMAT quarterly income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

• Source form, FY2026 Q3 (three months ended July 26, 2026). 10-Q filed 2026-08-20
• Source form, FY2025 Q3 (three months ended July 27, 2025). 10-Q filed 2026-08-20 (prior-year comparative columns)
• Balance sheet: note, FY2025 Q3 (three months ended July 27, 2025). The FY26Q3 10-Q (accession 0001628280-26-058235) presents balance sheets only as of July 26, 2026 and October 26, 2025, so there is no full July 27, 2025 balance sheet in it. The amounts above are the July 27, 2025 balance-sheet items that filing does disclose: accounts receivable, inventories and goodwill from the segment note, and total stockholders' equity and shares outstanding from the consolidated condensed statements of stockholders' equity. Total assets and total debt at that date are not shown in this filing.
• Cash flow note, FY2026 Q3 (three months ended July 26, 2026). The 10-Q presents cash flows only for the nine months ended July 26, 2026; no stand-alone three-month cash-flow statement is given. See the year-to-date block.
• Cash flow note, FY2025 Q3 (three months ended July 27, 2025). The 10-Q presents cash flows only for the nine-month periods; no stand-alone three-month cash-flow statement is given for the quarter ended July 27, 2025.
• Segments note, FY2025 Q3 (three months ended July 27, 2025). Recast presentation. Effective in the first quarter of fiscal 2026 Applied Materials moved its 200 millimeter equipment business from Applied Global Services into Semiconductor Systems and began fully allocating corporate support costs to the reportable segments. The prior-year segment figures above are the recast figures as presented in the FY26Q3 10-Q, and therefore do not tie to the segment tables in the FY2025 10-K.

AMAT year-to-date income statement and cash flow

Taken from the SEC filings and normalized to actual dollars.

AMAT trailing twelve month income statement and cash flow

Derived by AI from the figures the filings report. No filing prints these, so none of them is linked.

• Source form. calculated from the FY26Q3 10-Q (accession 0001628280-26-058235) and the FY2025 10-K (accession 0001628280-25-056742)
• Basis. Fiscal 2025 as reported in the FY2025 10-K, plus the nine months ended July 26, 2026, less the nine months ended July 27, 2025, both from the FY26Q3 10-Q. Neither filing presents a trailing-twelve-month column.

Adjustments

Prior year to date

Taken from the SEC filings and normalized to actual dollars.

• Source form. 10-Q filed 2026-08-20 (prior-year comparative columns)
• Segments note. Recast presentation, as described for the fiscal 2025 third quarter above.

Notes

• All figures are stated in actual dollars. Both filings present their statements in millions (per-share amounts in dollars), so every dollar amount taken from a statement was multiplied by one million; share counts on the face of the statements are also in millions and were scaled the same way. The one exception is the share count on the 10-Q cover page (793,597,443 shares outstanding at July 26, 2026), which the filing states as an exact number of shares and which is carried through unscaled.
• Annual figures for fiscal 2025, 2024 and 2023 come from the FY2025 10-K (accession 0001628280-25-056742), which presents three years of income statement and cash flow but only two balance-sheet dates. Fiscal 2023 therefore has no complete balance sheet here; the fiscal 2023 balance-sheet amounts that filing does disclose are included and labelled.
• Quarterly, nine-month and balance-sheet figures for fiscal 2026 come from the FY26Q3 10-Q (accession 0001628280-26-058235) for the three and nine months ended July 26, 2026, with the prior-year three- and nine-month comparatives as presented in that same filing.
• This record covers the periods those two filings put on their face: fiscal 2025, 2024 and 2023 as full years, the third quarters of fiscal 2026 and fiscal 2025, and the first nine months of each of those years. The first and second quarters of fiscal 2026 are not shown separately, because this 10-Q presents only the three- and nine-month columns.
• Applied Materials uses a 52/53-week fiscal year ending on the last Sunday of October. Fiscal 2025 (52 weeks) ended October 26, 2025; fiscal 2024 ended October 27, 2024; fiscal 2023 ended October 29, 2023. Fiscal 2026 and 2025 each contain 52 weeks, each quarter contains 13 weeks, and the first nine months of each year contained 39 weeks. Period-end dates therefore shift by a few days year to year.
• Revenue is labelled 'Net revenue' in the 10-K and 'Revenue' in the 10-Q; the two are the same line and both are reported here as revenue.
• Free cash flow is calculated as cash provided by operating activities less capital expenditures, both taken directly from the cash flow statement. Neither filing presents free cash flow as a line item.
• Total debt is the sum of short-term debt and long-term debt as carried on the balance sheet. At July 26, 2026 that is $1,299 million of short-term debt, the $1,199 million current portion of the 3.300% senior notes due 2027 plus $100 million of commercial paper, and $5,245 million of long-term debt. Aggregate principal of senior unsecured notes outstanding was $6.5 billion at both July 26, 2026 and October 26, 2025.
• Segment presentation changed in fiscal 2026: the 200 millimeter equipment business moved from Applied Global Services into Semiconductor Systems, and corporate support costs are now fully allocated to the reportable segments. Prior-period segment figures were recast in the 10-Q. Because of this, the fiscal 2026 and recast fiscal 2025 quarterly and nine-month segment tables are not directly comparable to the annual segment tables in the FY2025 10-K, which use the older presentation (with a 'Corporate and Other' category that carried unallocated costs and the Display business). Both presentations are reported here as each filing gives them, and are labelled accordingly.
• In the FY2025 10-K the Display operating segment is no longer reported separately; its results sit inside the 'Corporate and Other' category, which is also where unallocated corporate expense and restructuring charges are carried. That is why 'Corporate and Other' shows revenue alongside a large operating loss.
• Fiscal 2025 includes $181 million of restructuring charges tied to a fourth-quarter workforce reduction plan affecting roughly 4% of the global workforce; a further $12 million of severance and other employee-related charges under the same plan was recorded in the first nine months of fiscal 2026, none of it in the third quarter. There were no restructuring charges in fiscal 2024 or 2023 or in the third quarter of either fiscal 2026 or fiscal 2025.
• The nine months ended July 26, 2026 include a $253 million legal settlement charge, and the third quarter includes none of it. On February 11, 2026 the company settled the U.S. Commerce Department Bureau of Industry and Security inquiry into certain China customer shipments and export controls compliance for $253 million, paid in full during the second quarter of fiscal 2026. The charge is allocated to the Semiconductor Systems segment.
• Interest and other income (expense), net is large and volatile: income of $1,251 million in fiscal 2025 (which included a $792 million net gain and impairment reversal on investments) and income of $1,237 million for the nine months ended July 26, 2026 (the cash flow statement shows $909 million of net investment gains in that period), but a net expense of $100 million in the third quarter of fiscal 2026 against income of $396 million in the year-ago quarter. This line is investment-portfolio result, not operating profit, and it moves net income and earnings per share around independently of operating income.
• The effective tax rate swings materially by period, 11.1% in fiscal 2023, 12.0% in fiscal 2024, 24.5% in fiscal 2025, 12.7% in the third quarter of fiscal 2026 (against 30.6% in the year-ago quarter) and 12.9% for the first nine months of fiscal 2026 (against 27.2%). Effective tax rates shown here are calculated from the provision for income taxes divided by income before income taxes as reported.
• Dividends declared per share are taken from the statements of stockholders' equity: $1.22 in fiscal 2023, $1.52 in fiscal 2024, $1.78 in fiscal 2025, $0.53 in the third quarter of fiscal 2026 ($0.46 a year earlier), $1.52 for the first nine months of fiscal 2026 and $1.32 for the first nine months of fiscal 2025. Dividends paid in the cash flow statement differ slightly from dividends declared because of timing.
• Book value per share is calculated as total stockholders' equity divided by shares outstanding at the period end; neither filing presents it as a line item. For July 26, 2026 the exact cover-page share count is used; for July 27, 2025 only the share count rounded to millions on the statement of stockholders' equity is available.
• No stock splits, no ADR ratio and no currency conversion apply: the company reports in U.S. dollars and no split occurred in or between any of the periods presented.

Uncertainties

• Fiscal 2023 total assets and total debt are left empty. The FY2025 10-K (accession 0001628280-25-056742) presents balance sheets only as of October 26, 2025 and October 27, 2024, so neither figure is available from it, and no older filing was used to fill the gap. Fiscal 2023 total stockholders' equity and period-end shares outstanding are reported, taken from that same filing's consolidated statements of stockholders' equity.
• There is no balance sheet as of July 27, 2025 in the FY26Q3 10-Q, which shows only July 26, 2026 and October 26, 2025. The third quarter of fiscal 2025 therefore carries only the balance-sheet items that filing discloses elsewhere for that date (accounts receivable, inventories and goodwill from the segment note; total stockholders' equity and shares outstanding from the statements of stockholders' equity). Its total assets, total debt and cash balances are not stated in this filing and are left out.
• The 10-Q does not present a three-month cash flow statement, so there is no stand-alone operating cash flow, capital expenditure or free cash flow figure for either the quarter ended July 26, 2026 or the quarter ended July 27, 2025. Cash flow is reported here only for the nine-month periods and the fiscal years.
• The trailing-twelve-month block is a calculation (fiscal 2025 plus the fiscal 2026 first nine months, less the fiscal 2025 first nine months), not a figure either filing presents. The trailing diluted earnings per share shown, $11.59, is the arithmetic sum of the period earnings per share and will differ slightly from net income divided by a trailing share count because the weighted-average share count changed across the periods; no trailing share count is reported for that reason.
• The first and second quarters of fiscal 2026 are not broken out separately here, because the third-quarter 10-Q presents only the three- and nine-month periods; a first-half figure would have to be derived by subtraction rather than read from a statement.
• Segment figures for the fiscal 2025 quarterly and nine-month comparatives are the recast versions presented in the FY26Q3 10-Q. They will not reconcile to segment figures published in the FY2025 10-K or in filings made before the fiscal 2026 recast.
• Gross margin, operating margin, effective tax rate and book value per share are calculated from reported figures rather than read from the filings, and may differ in the last decimal from percentages the company shows in its own tables because of rounding at the millions level. Segment gross and operating margins are the percentages the filings print.
• Accounts receivable for the 'Other' category in the third quarter of fiscal 2025 is a negative $23 million as the segment note prints it; it is a reconciling balance, not a receivables balance.

Company details

Fiscal period