APPLIED MATERIALS INC /DE (AMAT): Results of Operations and Financial Condition
APPLIED MATERIALS INC /DE (AMAT) filed an SEC Form 8-K — Results of Operations and Financial Condition. 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 •
How this was made
The 30-second read
Why it matters
The filing combines record financial performance with management’s raised Semiconductor Systems revenue expectations for calendar 2026 and confidence in 2027 growth, plus detailed product and capacity initiatives.
Market read
Traders can update AMAT earnings power and forward estimates based on the disclosed record quarter, margin expansion, cash generation, and explicit demand-driven outlook for 2026 and 2027.
What to watch
The release emphasizes demand visibility and capacity investments, but it does not quantify order backlog or specific customer concentration, which can matter for forward risk.
Record revenue $9.12 billion, up 25 percent year over year; GAAP EPS $3.17 and record non-GAAP EPS $3.50.
Applied reported record revenue, operating income, operating cash flow and non-GAAP EPS, alongside year-over-year margin expansion and fourth-quarter revenue and non-GAAP EPS outlook above third-quarter reported levels.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $9,115 million | – | 25% |
| Gross profitGAAP | $4,586 million | – | – |
| Gross marginGAAP | 50.3 % | – | 1.5 points |
| Income from operationsGAAP | $3,075 million | – | – |
| Operating marginGAAP | 33.7 % | – | 3.1 points |
| Net incomeGAAP | $2,538 million | – | 43% |
| Diluted earnings per shareGAAP | $3.17 | – | 43% |
| Basic earnings per shareGAAP | $3.20 | – | – |
| GAAP effective income tax rateGAAP | 12.7 % | – | – |
| Non-GAAP gross profitnon-GAAP | $4,597 million | – | – |
| Non-GAAP gross marginnon-GAAP | 50.4 % | – | 1.5 points |
| Non-GAAP operating incomenon-GAAP | $3,096 million | – | – |
| Non-GAAP operating marginnon-GAAP | 34.0 % | – | 3.3 points |
| Non-GAAP net incomenon-GAAP | $2,795 million | – | 41% |
| Non-GAAP diluted EPSnon-GAAP | $3.50 | – | 41% |
| Non-GAAP effective income tax ratenon-GAAP | 11.0 % | – | – |
| Cash provided by operating activitiesother | $3,037 million | – | – |
| Capital expendituresother | $(707) million | – | – |
| Non-GAAP free cash flownon-GAAP | $2,330 million | – | 14% |
| Cash and cash equivalentsother | $7,037 million | – | – |
| Short-term investmentsother | $2,196 million | – | – |
| Long-term investmentsother | $5,268 million | – | – |
| Short-term debtother | $1,299 million | – | – |
| Long-term debtother | $5,245 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Semiconductor SystemsFoundry, logic and other represented 67 % of revenue, DRAM represented 26 %, and Flash memory represented 7 %. GAAP gross margin was 55.3 % and GAAP operating margin was 37.7 %. | $7,040 million | – | – |
| Applied Global ServicesGAAP gross margin was 35.6 % and GAAP operating margin was 30.1 %. | $1,781 million | – | – |
| OtherCost of products sold and expenses were $(412) million, and operating income (loss) was $(118) million. Display operating segment financial results are included in Other. | $294 million | – | – |
Q4 FY2026 outlook
- Revenue$10,250 million +/- $500 million
- NoteNon-GAAP diluted EPS $4.02 +/- $0.20
- NoteThis outlook for non-GAAP diluted EPS excludes known charges related to completed acquisitions of $0.01 per share.
- NoteIncludes the normalized tax benefit of share-based compensation of $0.01 per share.
- NoteIncludes a net income tax benefit related to intra-entity intangible asset transfers of $0.05 per share.
Capital returns
- $860 million distributed to shareholders through $440 million in share repurchases and $420 million in dividends.
- Common stock repurchases $(440) million.
- Payments of dividends to stockholders $(420) million.
What drove it
- Management cited rapid global adoption of AI and unprecedented demand for its materials engineering solutions.
- Management expects continued strong revenue growth in the second half of the calendar year, particularly in DRAM, leading-edge foundry-logic and advanced packaging.
- Semiconductor Systems revenue mix was 67 % Foundry, logic and other, 26 % DRAM and 7 % Flash memory.
- The company introduced six new chipmaking systems for DRAM and advanced packaging.
- EPIC Center R&D partnerships expanded to 11 engagements with leading chipmakers, universities and innovation partners.
Concerns
- Other reported an operating loss of $(118) million, compared with $(4) million in Q3 FY2025.
- China represented 28 % of Q3 FY2026 revenue, compared with 35 % in Q3 FY2025.
- Q4 FY2026 non-GAAP diluted EPS guidance does not reflect items that are unknown at this time, including any additional charges related to acquisitions or other non-operational or unusual items and other tax-related items.
- The company identified risks including demand levels, trade and export regulations, tariffs, geopolitical turmoil, customer technology and capacity requirements, supply availability and customer concentration.
What to watch
- Delivery against Q4 FY2026 total revenue guidance of $10,250 million +/- $500 million.
- Delivery against Q4 FY2026 non-GAAP diluted EPS guidance of $4.02 +/- $0.20.
- Revenue growth in DRAM, leading-edge foundry-logic and advanced packaging.
- Semiconductor Systems revenue expectations for calendar 2026, which management said it is further raising.
- Additional manufacturing capacity investments to support projected demand through the end of the decade.
- The effect of trade, export regulation and tariff developments on demand and operations.
Balance sheet and cash flow
- Cash and cash equivalents $7,037 million as of July 26, 2026.
- Short-term investments $2,196 million and long-term investments $5,268 million as of July 26, 2026.
- Short-term debt $1,299 million and long-term debt $5,245 million as of July 26, 2026.
- Cash provided by operating activities $3,037 million.
- Capital expenditures $(707) million.
- Non-GAAP free cash flow $2,330 million.
- Cash, cash equivalents and restricted cash equivalents — end of period $7,094 million.
Analysis
Applied delivered a record Q3 FY2026, with revenue of $9,115 million, up 25%, and GAAP net income of $2,538 million, up 43%. GAAP diluted earnings per share were $3.17, while non-GAAP diluted EPS reached a record $3.50 and increased 41%. Management characterized the quarter as the company’s highest sequential revenue growth in its history and tied demand to the rapid global adoption of AI.
Profitability expanded on both reported bases. GAAP gross margin was 50.3 %, compared with 48.8 %, and GAAP operating margin was 33.7 %, compared with 30.6 %. Non-GAAP gross margin was 50.4 %, compared with 48.9 %, while non-GAAP operating margin was 34.0 %, compared with 30.7 %. Management said this was its 13th consecutive quarter of year-over-year gross margin expansion.
Semiconductor Systems was the principal business, reporting revenue of $7,040 million, gross margin of 55.3 % and operating income of $2,657 million. Foundry, logic and other accounted for 67 % of segment revenue, DRAM for 26 %, and Flash memory for 7 %. Applied Global Services reported revenue of $1,781 million and operating income of $536 million. Management specifically identified DRAM, leading-edge foundry-logic and advanced packaging as areas expected to support strong second-half calendar-year growth.
Cash generation was also strong, with cash provided by operating activities of $3,037 million and non-GAAP free cash flow of $2,330 million. The company returned $860 million to shareholders through $440 million in share repurchases and $420 million in dividends. At July 26, 2026, cash and cash equivalents were $7,037 million, short-term debt was $1,299 million and long-term debt was $5,245 million.
For Q4 FY2026, Applied guided total revenue to $10,250 million +/- $500 million and non-GAAP diluted EPS to $4.02 +/- $0.20. The EPS outlook includes specified tax benefits and excludes known completed-acquisition charges of $0.01 per share, while excluding unknown future items. Management also said it is raising Semiconductor Systems revenue expectations for calendar 2026 and expects another strong growth year in 2027, while making additional manufacturing capacity investments for projected demand through the end of the decade.
Management, verbatim
Applied Materials delivered another record-breaking quarter, including the highest sequential revenue growth in the company’s history.
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.
Gary Dickerson, President and CEO
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.
Brice Hill, Senior Vice President and CFO
Not in the filing
stated, not guessed- Previous-quarter comparative figures and quarter-over-quarter changes for Q3 FY2026 operating results and segments were not reported.
- Prior-quarter outlook was not provided, so no actual-versus-prior-guidance comparison is available.
- Q4 FY2026 guidance for gross margin, operating expenses and tax rate was not reported.
- GAAP EPS guidance for Q4 FY2026 was not reported.
- Per-share dividend information was not reported.
- Year-over-year percentage changes for individual reportable-segment revenue, gross margin and operating income were not printed.
- Free cash flow was presented only as a non-GAAP measure.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC 8-K with the company’s Q3 FY2026 results release (Exhibit 99.1).
Ticker impact
Applied Materials reported Q3 FY2026 results with record revenue of $9.12B, GAAP EPS $3.17, and raised 2026 Semiconductor Systems expectations.
Likely positive near-term bias as traders price in higher 2026 Semiconductor Systems growth and continued 2027 strength.
The filing discloses multiple fresh, decision-relevant datapoints: record revenue/EPS, gross margin expansion, large cash return, and management guidance to raise 2026 expectations with confidence in 2027 growth.
Market effects
Signals continued strength in semiconductor capex demand, particularly DRAM, leading-edge foundry-logic, and advanced packaging, which can lift sentiment across equipment peers.
Singapore capacity expansion (US$500M Tampines Campus) reinforces ongoing build-out tied to AI infrastructure demand.
Demand visibility tied to AI adoption suggests broader global wafer-fab spending resilience into 2027.
Counterpoint
Raised expectations may already be partially anticipated; upside could fade if subsequent order commentary or customer capex timing disappoints.
Key entities
- companyApplied Materials, Inc.
Reported Q3 FY2026 record revenue and EPS, expanded margins, returned cash to shareholders, and raised 2026 Semiconductor Systems expectations.
- programEPIC Center
Expanded to 11 engagements, including Broadcom, UC Berkeley, and SCREEN SPE, aimed at accelerating commercialization of chipmaking technologies.
- partnerEssilorLuxottica
Long-term joint development agreement for next-generation intelligent optical systems for AR and AI smart eyewear.
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