Results
5Record revenue $9.12 billion, up 25 percent year over year
GAAP gross margin 50.3 percent and non-GAAP gross margin 50.4 percent
4GAAP EPS $3.17 and record non-GAAP EPS $3.50, up 43 percent and 41 percent year over year, respectively
Management commentary
EPIC Center R&D partnerships expand to 11 engagements with leading chipmakers, universities and innovation partners
Results
Third Quarter Results
Applied generated record revenue of $9.12 billion.
On a GAAP basis, the company reported gross margin of 50.3 percent, record operating income of $3.08 billion or 33.7 percent of revenue, and earnings per share (EPS) of $3.17.
On a non-GAAP basis, the company reported gross margin of 50.4 percent, record operating income of $3.10 billion or 34.0 percent of revenue, and record EPS of $3.50.
The company generated record cash from operations of $3.04 billion and distributed $860 million to shareholders through $440 million in share repurchases and $420 million in dividends.
Management commentary
7“Applied Materials delivered another record-breaking quarter, including the highest sequential revenue growth in the company’s history,” said Gary Dickerson, President and CEO.
1“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.Guidance raised
Based on the increased demand visibility we are receiving from our customers, we expect another strong growth year for Applied Materials in 2027.”
3“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,” said Brice Hill, Senior Vice President and CFO.
8“We expect continued strong revenue growth in the second half of the calendar year, particularly in DRAM as well as leading-edge foundry-logic and advanced packaging.
Looking further ahead, we are making additional manufacturing capacity investments to support projected demand through the end of the decade.”
Results
Results Summary
Recent Highlights
Corporate events
New Products and Technologies
Introduced six new chipmaking systems for DRAM and advanced packaging.
Enhanced Centura™ Prime™ Epi: selectively grows doped silicon germanium and silicon phosphorous in transistor source/drain regions, combining advanced strain engineering with precise doping control.
The result is higher drive current and transistor efficiency, enabling faster, more power-efficient DRAM and high bandwidth memory (HBM).
Opta™ Quad CMP: engineered specifically for advanced packaging, the Opta Quad continuously monitors wafer conditions during polish and dynamically adjusts in real time, improving within-wafer uniformity and total thickness variation control, which is particularly critical for hybrid bonding.
Nokota™ VMax™ 2 ECD: high-precision copper plating across a broad range of applications for next-generation packaging, from TSV fill for 3D stacking to fine-pitch interconnects such as microbump formation.
Nokota VMax 2 introduces Adaptive Pattern Tuning (APT), which dynamically shapes the electric field to correct for layout-driven variation and improve plating uniformity across the wafer.
Producer™ Avila™ 2 PECVD: improves the mechanical stability of ultra-thin DRAM dies by depositing stress-balanced dielectric films around TSVs, enabling reliable stacking of 12, 16 and future high-layer-count HBM designs.
VeritySEM™ 7AP Metrology: critical dimension eBeam metrology enables precise measurement of features on thick, heterogeneous and highly warped substrates common in HBM and chiplet architectures.
VeritySEM AP systems automatically reconfigure to support a range of sizes and materials, while delivering sub-10nm sensitivity—orders of magnitude better than optical tools.
SEMVision™ G7AP Defect Analysis: extends Applied’s leadership in eBeam defect analysis into advanced packaging, enabling high-resolution defect review and automated classification across silicon, organic and glass substrates.
The system can accelerate yield learning by helping customers quickly distinguish critical defects from nuisance signals.
Applied Materials, Inc.
Introduced new deposition and etch systems that help chipmakers extend scaling in logic and memory to deliver higher performance, improved energy efficiency and better manufacturing yield for next-generation AI chips.
Centris™ Spectral™ SiN ALD: leverages innovative microwave plasma technology to deliver uniform silicon nitride deposition in challenging 3D structures.
Producer™ Selectra™ Mo Etch: selectively removes molybdenum for wordline separation to enable 3D NAND scaling.
Unveiled SENZ™, an integrated ambient visual platform that combines waveguide optics, light engine, sensing, vision correction and electronic dimming technology in a single system designed for AI-powered next-generation display smart glasses.
Corporate Initiatives
Announced three additional EPIC Center partnerships.
The EPIC Center is designed to dramatically reduce the time it takes to commercialize breakthrough technologies from early-stage research to full-scale manufacturing.
Broadcom Inc. will join EPIC as an innovation partner to accelerate development of advanced chip packaging technologies critical to next-generation AI systems.
The University of California, Berkeley will join the EPIC Center as a research collaborator.
Working side by side with Applied’s scientists and engineers, UC Berkeley faculty and students will pursue high-impact research programs to accelerate the material and process innovations that are foundational to AI computing.
SCREEN Semiconductor Solutions Co., Ltd. (SCREEN SPE) will join the EPIC Center as an innovation partner, bringing together SCREEN SPE’s expertise in wafer cleaning technology with Applied's leadership in materials engineering to develop co-optimized process solutions for the world’s most advanced chips.
Expanded our manufacturing and R&D operations in Singapore to support the global build-out of AI infrastructure.
2The new US$500 million Tampines Campus more than doubles Applied’s advanced cleanroom capacity in Singapore and strengthens the company’s global manufacturing footprint.
6Announced a long-term joint development agreement with EssilorLuxottica to accelerate the commercialization of next-generation intelligent optical systems for augmented reality and AI-powered smart eyewear.
Published our latest Impact Report highlighting how Applied is progressing toward its sustainability goals and helping reduce the resources required to manufacture the semiconductors and technologies that support more energy-efficient computing in use.
Outlook
Business Outlook
Applied’s total revenue and non-GAAP diluted EPS for the fourth quarter of fiscal 2026 are expected to be as follows:
This outlook for non-GAAP diluted EPS excludes known charges related to completed acquisitions of $0.01 per share, includes the normalized tax benefit of share-based compensation of $0.01 per share and includes a net income tax benefit related to intra-entity intangible asset transfers of $0.05 per share, but does not reflect any items that are unknown at this time, such as any additional charges related to acquisitions or other non-operational or unusual items, as well as other tax-related items, which we are not able to predict without unreasonable efforts due to their inherent uncertainty.
Results
Third Quarter Reportable Segment Information
Corporate events
Effective in the first quarter of fiscal 2026, management moved our 200-millimeter equipment business to Semiconductor Systems.
The business was previously included in Applied Global Services.
Additionally, effective in the first quarter of fiscal 2026, management began fully allocating corporate support costs to our operating segments.
Prior-period numbers have been recast to conform to the current-year presentation.
Display operating segment financial results are included in the Other category balances below.
Results
2Charge of $253 million for settlement with the U.S. Commerce Department Bureau of Industry and Security to resolve a previously disclosed export controls compliance matter.
5Amount for the nine months ended July 27, 2025, included changes to the income tax provision of $94 million from amortization of intangibles and a $644 million remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore in the first quarter of fiscal 2025.
6Amounts for the three and nine months ended July 27, 2025 included the impact of the recognition of a $410 million valuation allowance against deferred tax assets related to corporate alternative minimum tax credits.
7Adjustment to provision for income taxes related to non-GAAP adjustments reflected in income before income taxes.
1Amount for the nine months ended July 27, 2025, included changes to the income tax provision of $0.12 per diluted share from amortization of intangibles and $0.79 per diluted share from a remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore in the first quarter of fiscal 2025.
2Amounts for the three and nine months ended July 27, 2025 included a $0.51 per diluted share impact of the recognition of a valuation allowance against deferred tax assets related to corporate alternative minimum tax credits.
2Charge of $253 million for settlement with the U.S. Commerce Department Bureau of Industry and Security to resolve a previously disclosed export controls compliance matter.
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