APPLIED MATERIALS ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2026 RESULTS
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 FOURTH QUARTER AND FISCAL YEAR 2026 RESULTS • Record quarterly revenue $10.41 billion, up
How this was made
The 30-second read
Why it matters
The earnings beat and forward guidance reinforce the company's positioning in AI‑related semiconductor equipment, likely supporting a price rally.
Market read
Strong earnings and AI‑focused outlook could lift AMAT and related fab equipment stocks.
What to watch
Capital intensity of new EPIC Center and share repurchase program may limit free cash flow flexibility.
Applied Materials Q4 FY2026 revenue of $10,409 million, up 53%; non-GAAP diluted EPS of $4.16, up 92%; FY2026 revenue of $34,446 million, up 21%
Q4 revenue rose 53% year over year to a record $10,409 million, GAAP operating margin expanded 9.9 points to 35.1%, and non-GAAP diluted EPS rose 92% to $4.16. Full-year revenue, operating income, net income and free cash flow all grew, and the Q1 FY2027 revenue outlook of $11,100 million +/- $500 million is above the Q4 revenue of $10,409 million. The filing prints no prior outlook, so no guidance comparison is possible.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, Q4 FY2026 (three months ended Oct 25, 2026)GAAP | $10.41B | – | 53% |
| Gross margin, Q4 FY2026GAAP | 50.4% | – | 2.4 points (240 basis points per release text) |
| Gross profit, Q4 FY2026GAAP | $5.25B | – | – |
| Cost of products sold, Q4 FY2026GAAP | $5.16B | – | – |
| Research, development and engineering, Q4 FY2026GAAP | $1.13B | – | – |
| Marketing and selling, Q4 FY2026GAAP | $250M | – | – |
| General and administrative, Q4 FY2026GAAP | $218M | – | – |
| Restructuring charges, Q4 FY2026GAAP | −$4M | – | – |
| Total operating expenses, Q4 FY2026GAAP | $1.59B | – | – |
| Income from operations, Q4 FY2026GAAP | $3.66B | – | – |
| Operating margin, Q4 FY2026GAAP | 35.1% | – | 9.9 points |
| Interest expense, Q4 FY2026GAAP | $68M | – | – |
| Interest and other income (expense), net, Q4 FY2026GAAP | −$513M | – | – |
| Provision for income taxes, Q4 FY2026GAAP | $359M | – | – |
| Effective income tax rate, Q4 FY2026GAAP | 11.7% | – | – |
| Net income, Q4 FY2026GAAP | $2.72B | – | 43% |
| Basic EPS, Q4 FY2026GAAP | $3.43 | – | – |
| Diluted EPS, Q4 FY2026GAAP | $3.40 | – | 43% |
| Non-GAAP gross margin, Q4 FY2026non-GAAP | 50.6% | – | 2.5 points (250 basis points per release text) |
| Non-GAAP gross profit, Q4 FY2026non-GAAP | $5.26B | – | – |
| Non-GAAP operating income, Q4 FY2026non-GAAP | $3.68B | – | – |
| Non-GAAP operating margin, Q4 FY2026non-GAAP | 35.3% | – | 6.7 points |
| Non-GAAP effective income tax rate, Q4 FY2026non-GAAP | 11.0% | – | – |
| Non-GAAP net income, Q4 FY2026non-GAAP | $3.32B | – | 92% |
| Non-GAAP diluted EPS, Q4 FY2026non-GAAP | $4.16 | – | 92% |
| Cash provided by operating activities, Q4 FY2026GAAP | $3.3B | – | – |
| Non-GAAP free cash flow, Q4 FY2026non-GAAP | $2.62B | – | 28% |
| Revenue, FY2026 (twelve months ended Oct 25, 2026)GAAP | $34.45B | – | 21% |
| Gross margin, FY2026GAAP | 50.0% | – | 1.3 points (130 basis points per release text) |
| Cost of products sold, FY2026GAAP | $17.23B | – | – |
| Gross profit, FY2026GAAP | $17.22B | – | – |
| Research, development and engineering, FY2026GAAP | $4.18B | – | – |
| Marketing and selling, FY2026GAAP | $954M | – | – |
| General and administrative, FY2026GAAP | $733M | – | – |
| Legal settlement, FY2026GAAP | $253M | – | – |
| Restructuring charges, FY2026GAAP | $8M | – | – |
| Total operating expenses, FY2026GAAP | $6.13B | – | – |
| Income from operations, FY2026GAAP | $11.09B | – | – |
| Operating margin, FY2026GAAP | 32.2% | – | 3.0 points |
| Interest expense, FY2026GAAP | $274M | – | – |
| Interest and other income (expense), net, FY2026GAAP | $724M | – | – |
| Provision for income taxes, FY2026GAAP | $1.45B | – | – |
| Net income, FY2026GAAP | $10.09B | – | 44% |
| Basic EPS, FY2026GAAP | $12.71 | – | – |
| Diluted EPS, FY2026GAAP | $12.62 | – | 46% |
| Non-GAAP gross margin, FY2026non-GAAP | 50.1% | – | 1.3 points |
| Non-GAAP operating income, FY2026non-GAAP | $11.41B | – | – |
| Non-GAAP operating margin, FY2026non-GAAP | 33.1% | – | 2.9 points |
| Non-GAAP net income, FY2026non-GAAP | $10.30B | – | 35% |
| Non-GAAP diluted EPS, FY2026non-GAAP | $12.89 | – | 37% |
| Cash provided by operating activities, FY2026GAAP | $8.87B | – | – |
| Non-GAAP free cash flow, FY2026non-GAAP | $6.20B | – | 9% |
| Total assets, balance sheet at Oct 25, 2026GAAP | $45.4B | – | – |
| Total stockholders' equity, balance sheet at Oct 25, 2026GAAP | $26.11B | – | – |
| Short-term debt, balance sheet at Oct 25, 2026GAAP | $1.30B | – | – |
| Long-term debt, balance sheet at Oct 25, 2026GAAP | $5.23B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Semiconductor Systems, Q4 FY2026Prior-year Q4 revenue $4,879 million. Q4 revenue mix: foundry and logic 58% (prior year 66%), DRAM 33% (28%), flash memory 9% (6%). Gross margin 55.0% (prior 52.7%). Operating income $3,101 million (prior $1,430 million), operating margin 38.8% (prior 29.3%). Non-GAAP operating income $3,115 million (prior $1,442 million), non-GAAP operating margin 39.0% (prior 29.6%). The 200-millimeter equipment business was moved into this segment in Q1 FY2026 and prior periods were recast. | $8.00B | – | – |
| Semiconductor Systems, FY2026Prior-year FY2025 revenue $21,441 million. FY revenue mix: foundry and logic 63% (prior 68%), DRAM 30% (26%), flash memory 7% (6%). Gross margin 54.9% (prior 53.2%). Operating income $9,277 million (prior $6,909 million), operating margin 35.5% (prior 32.2%). Non-GAAP operating income $9,581 million (prior $6,958 million), non-GAAP operating margin 36.6% (prior 32.5%). | $26.14B | – | – |
| Applied Global Services, Q4 FY2026Prior-year Q4 revenue $1,506 million. Gross margin 35.1% (prior 34.1%). Operating income $578 million (prior $433 million), operating margin 30.5% (prior 28.8%). Non-GAAP operating income $578 million (prior $434 million), non-GAAP operating margin 30.5% (prior 28.8%). | $1.90B | – | – |
| Applied Global Services, FY2026Prior-year FY2025 revenue $5,742 million. Gross margin 35.0% (prior 33.5%). Operating income $2,039 million (prior $1,547 million), operating margin 29.5% (prior 26.9%). Non-GAAP operating income $2,039 million (prior $1,549 million), non-GAAP operating margin 29.5% (prior 27.0%). | $6.90B | – | – |
| Other (includes display), Q4 FY2026Prior-year Q4 revenue $415 million. Cost of products sold and expenses $(542) million (prior $(385) million). Restructuring charges $4 million (prior $(181) million). Operating loss $(21) million (prior $(151) million). | $517M | – | – |
| Other (includes display), FY2026Prior-year FY2025 revenue $1,185 million. Cost of products sold and expenses $(1,624) million (prior $(1,171) million). Restructuring charges $(8) million (prior $(181) million). Operating loss $(229) million (prior $(167) million). | $1.40B | – | – |
| Revenue by geography, United States, Q4 FY2026Prior-year Q4 $655 million. 13% of total revenue (prior year 10%). | $1.32B | – | – |
| Revenue by geography, United States, FY2026Prior-year FY2025 $3,063 million. 12% of total (prior year 11%). | $4.28B | – | – |
| Revenue by geography, Europe, Q4 FY2026Prior-year Q4 $220 million. 5% of total (prior year 3%). | $520M | – | – |
| Revenue by geography, Europe, FY2026Prior-year FY2025 $962 million. 5% of total (prior year 3%). | $1.57B | – | – |
| Revenue by geography, Japan, Q4 FY2026Prior-year Q4 $448 million. 6% of total (prior year 6%). | $619M | – | – |
| Revenue by geography, Japan, FY2026Prior-year FY2025 $2,273 million. 8% of total (prior year 8%). | $2.61B | – | – |
| Revenue by geography, Korea, Q4 FY2026Prior-year Q4 $1,219 million. 17% of total (prior year 18%). | $1.81B | – | – |
| Revenue by geography, Korea, FY2026Prior-year FY2025 $5,608 million. 18% of total (prior year 20%). | $6.36B | – | – |
| Revenue by geography, Taiwan, Q4 FY2026Prior-year Q4 $1,834 million. 28% of total (prior year 27%). | $2.92B | – | – |
| Revenue by geography, Taiwan, FY2026Prior-year FY2025 $6,857 million. 26% of total (prior year 24%). | $8.82B | – | – |
| Revenue by geography, Southeast Asia, Q4 FY2026Prior-year Q4 $460 million. 6% of total (prior year 7%). | $581M | – | – |
| Revenue by geography, Southeast Asia, FY2026Prior-year FY2025 $1,076 million. 4% of total (prior year 4%). | $1.48B | – | – |
| Revenue by geography, China, Q4 FY2026Prior-year Q4 $1,964 million. 25% of total (prior year 29%). | $2.64B | – | – |
| Revenue by geography, China, FY2026Prior-year FY2025 $8,529 million. 27% of total (prior year 30%). | $9.33B | – | – |
Q1 FY2027 (quarter ending after fiscal 2026) outlook
- Revenue$11,100 million +/- $500 million
- NoteNon-GAAP diluted EPS $4.35 +/- $0.20
- NoteNon-GAAP EPS outlook excludes known charges related to completed acquisitions of $0.01 per share
- NoteNon-GAAP EPS outlook includes a net income tax benefit related to intra-entity intangible asset transfers of $0.04 per share
- NoteOutlook does not reflect items unknown at this time, such as additional acquisition charges, other non-operational or unusual items, or other tax-related items
Capital returns
- Q4 FY2026 share repurchases: $2,000 million per release text and cash flow line (2,000); prior-year Q4 (851). Release states this is the largest quarterly share buyback in more than eight years, per CFO quote.
- Q4 FY2026 dividends paid: $421 million (cash flow line (421)); prior-year Q4 (365).
- Q4 FY2026 total distributed to shareholders: $2.42 billion per release text.
- FY2026 share repurchases: $3,177 million (cash flow line (3,177)); FY2025 (4,895). Release text states $3.18 billion.
- FY2026 dividends paid: $1,571 million (cash flow line (1,571)); FY2025 (1,384). Release text states $1.57 billion.
- FY2026 total distributed to shareholders: $4.75 billion per release text.
- FY2026 tax withholding payments for vested equity awards: $(570) million; FY2025 $(248) million.
- Accelerated share purchase agreement entered to increase investment in Besi to approximately 20 percent of Besi's outstanding shares. The release states the purchase would add to the investment initially made in April 2025. No amount is printed.
What drove it
- CEO Gary Dickerson states that AI continues to fuel strong incremental demand for semiconductors. This is the company's explanation of demand.
- CFO Brice Hill attributes the year-over-year growth in Q4 revenue of 53% and non-GAAP EPS of 92% to technology leadership in the most critical areas of the wafer fab equipment market.
- Company states Semiconductor Systems is on track to grow more than 40 percent in calendar 2026, per CEO. The release gives no segment growth percentage for the quarter or year.
- EPIC Center in Silicon Valley was unveiled. The company states it enables parallel rather than sequential development, resulting in shorter learning cycles and faster commercialization. Intel, KIOXIA, Besi and UCLA Samueli School of Engineering are named as partners, bringing announced EPIC engagements to 15.
- Reconciliation shows GAAP net income of $2,718 million in Q4 FY2026 adjusted upward to non-GAAP net income of $3,321 million, including an unrealized loss on strategic investments, net of $653 million added back. Prior-year Q4 shows unrealized gain on strategic investments, net of $(467) million.
- Restructuring charges of $181 million in Q4 FY2025 relate, per the release, to a workforce reduction plan announced in Q4 FY2025. FY2026 restructuring charges are $8 million.
Concerns
- Legal settlement of $253 million in FY2026 (zero in the prior year). Per the release, this is a charge to settle with the U.S. Commerce Department Bureau of Industry and Security to resolve an export controls compliance matter.
- GAAP interest and other income (expense), net was $(513) million in Q4 FY2026 versus $626 million in Q4 FY2025. The filing does not explain this change, but the reconciliation shows the unrealized loss on strategic investments of $653 million in Q4 FY2026.
- Accounts receivable, net rose to $8,998 million from $5,185 million, and inventories rose to $6,889 million from $5,915 million. Net change in operating assets and liabilities was $(1,936) million for FY2026 versus $(200) million in FY2025. The filing does not explain these movements.
- Short-term debt rose to $1,299 million from $100 million, while long-term debt fell to $5,233 million from $6,455 million.
- China revenue rose in dollars to $2,642 million in Q4 from $1,964 million, but its share of total revenue fell to 25% from 29%. Taiwan's share rose to 28% from 27%.
- Forward-looking statements cite the concentrated nature of the customer base and changes in trade and export regulations, tariffs and licensing among key risk factors.
What to watch
- Q1 FY2027 revenue outlook of $11,100 million +/- $500 million and non-GAAP diluted EPS outlook of $4.35 +/- $0.20, against the Q4 FY2026 actuals of $10,409 million and $4.16.
- Semiconductor Systems growth, which the CEO says is on track to exceed 40 percent in calendar 2026.
- Whether the GAAP-to-non-GAAP gap in Q4 FY2026 continues to reflect strategic investment marks, given the $653 million unrealized loss added back.
- Completion and effect of the accelerated share purchase to raise Besi ownership to approximately 20 percent.
- Capital expenditures of $(2,672) million in FY2026 against the rise in property, plant and equipment to $5,854 million.
- Trade, export licensing and tariff developments, referenced in the forward-looking statements and in the BIS settlement.
Balance sheet and cash flow
- Cash and cash equivalents: $7,239 million at Oct 25, 2026 (Oct 26, 2025: $7,241 million).
- Short-term investments: $2,100 million (prior year $1,332 million). Long-term investments: $4,756 million (prior year $4,327 million).
- Accounts receivable, net: $8,998 million (prior year $5,185 million). Inventories: $6,889 million (prior year $5,915 million). Contract liabilities: $3,585 million (prior year $2,566 million).
- Property, plant and equipment, net: $5,854 million (prior year $4,610 million). Goodwill: $3,875 million (prior year $3,707 million).
- Total current liabilities: $11,580 million (prior year $7,999 million). Total liabilities: $19,294 million (prior year $15,884 million).
- Q4 FY2026 capital expenditures: $(684) million (prior-year Q4 $(785) million). FY2026 capital expenditures: $(2,672) million (FY2025 $(2,260) million).
- Q4 FY2026 cash paid for acquisitions, net of cash acquired: $4 million (prior-year Q4 nil). FY2026: $(258) million (FY2025 $(29) million).
- Q4 FY2026 net change in operating assets and liabilities: $(59) million (prior-year Q4 $1,258 million). FY2026: $(1,936) million (FY2025 $(200) million).
- Q4 FY2026 cash taxes paid: $113 million (prior-year Q4 $235 million). FY2026: $932 million (FY2025 $1,504 million).
- Cash, cash equivalents and restricted cash equivalents at end of FY2026: $7,296 million (FY2025 $7,312 million).
Analysis
Applied Materials reported record Q4 FY2026 revenue of $10,409 million, up 53% from $6,800 million, with GAAP gross margin of 50.4% against 48.0% and GAAP operating margin of 35.1% against 25.2%. Non-GAAP diluted EPS was $4.16 against $2.17, and GAAP diluted EPS was $3.40 against $2.38. Full-year revenue reached $34,446 million, up 21% from $28,368 million, and full-year GAAP net income was $10,088 million against $6,998 million. The company attributes demand to AI, stating that AI continues to fuel strong incremental demand for semiconductors. The filing does not give a numeric cause for the margin expansion.
Segment data show the mix shifting toward Semiconductor Systems. Q4 Semiconductor Systems revenue was $7,996 million against $4,879 million, and its operating margin was 38.8% against 29.3%. Its revenue mix moved toward DRAM (33% against 28%) and flash memory (9% against 6%), while foundry and logic fell to 58% from 66%. Applied Global Services grew to $1,896 million from $1,506 million, with operating margin of 30.5% against 28.8%. The Other category, which includes display, recorded an operating loss of $(21) million against $(151) million in the prior-year quarter.
Below the operating line, GAAP results were shaped by a swing in interest and other income. Q4 interest and other income (expense), net was $(513) million against $626 million. The reconciliation adds back a $653 million unrealized loss on strategic investments, which lifts non-GAAP net income to $3,321 million, and the GAAP effective tax rate for the quarter was 11.7% against a non-GAAP rate of 11.0%. Full-year FY2026 operating expenses include a $253 million legal settlement with the U.S. Commerce Department Bureau of Industry and Security over an export controls compliance matter, which the company treats as a non-GAAP adjustment.
Cash generation and capital returns were strong in the quarter. Cash from operations was $3,300 million against $2,828 million, and non-GAAP free cash flow was $2,616 million against $2,043 million. The company repurchased $2,000 million of shares and paid $421 million in dividends in Q4, which the CFO describes as the largest quarterly buyback in more than eight years. For the full year, repurchases were $3,177 million, down from $4,895 million, and dividends were $1,571 million. Balance sheet receivables rose to $8,998 million from $5,185 million, and inventories to $6,889 million from $5,915 million, while total assets rose to $45,400 million from $36,299 million.
The outlook for Q1 FY2027 calls for revenue of $11,100 million +/- $500 million and non-GAAP diluted EPS of $4.35 +/- $0.20. The EPS outlook excludes known charges from completed acquisitions of $0.01 per share and includes an income tax benefit of $0.04 per share from intra-entity intangible asset transfers. No prior outlook is printed in the filing, so the guide cannot be compared with earlier expectations within this document.
Management, verbatim
Applied Materials delivered record results in fiscal 2026, and we are on track to grow our Semiconductor Systems business more than 40 percent in our calendar 2026
Gary Dickerson, President and CEO
We generated record quarterly free cash flow of $2.6 billion and distributed over $2.4 billion to shareholders, including the largest quarterly share buyback in more than eight years.
Brice Hill, Senior Vice President and CFO
Not in the filing
stated, not guessed- No previous-quarter (Q3 FY2026) figures are printed, so all qoq_change and prior_quarter fields are null.
- No prior-year percentage change is printed for R&D, marketing and selling, G&A, interest expense, tax provision, cash from operations or cash flow lines, so those yoy_change fields are null.
- Segment prior-year percentage changes are not printed; prior-year segment revenue appears only in driver text.
- No prior outlook was provided, so vs_prior_guidance is empty.
- Guidance for gross margin, operating expenses and tax rate is not printed.
- No consensus estimates, analyst expectations or share-price reaction are in the document.
- Q4 and FY non-GAAP operating expense lines are not printed.
- Q1 FY2027 guidance is not compared with a prior-year Q1 figure, which is not printed.
- Exact percentage change for Q4 and FY restructuring and legal settlement lines is not printed.
- Debt total and net cash position are not printed and are not computed.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. 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
Applied Materials disclosed its FY2026 results via a Form 8‑K, highlighting record financial metrics and new EPIC Center partnerships.
Ticker impact
Applied Materials reported record Q4 and FY2026 revenue, EPS and cash flow, and issued FY2027 outlook in its 8‑K filing.
likely upward pressure as investors price in record results and issued outlook
Revenue up 53% YoY, EPS up 43% YoY, and the company provided guidance for FY2027 revenue $11.1B±$0.5B and non‑GAAP EPS $4.35±$0.20, indicating continued growth.
Market effects
Semiconductor equipment sector may see broader rally on AI‑driven demand.
U.S. tech stocks could benefit from the earnings beat.
Positive signal for global fab equipment suppliers tied to AI chip growth.
Counterpoint
If the AI demand surge stalls, the high valuation multiples could pressure the stock.
Key entities
- companyApplied Materials
Semiconductor equipment maker reporting FY2026 results.
- partnerIntel
Founding partner of the EPIC Center.
