01—Abstract
Summary
Summary of the 10-K filed December 9, 2015. Cited figures are marked; the original filing is the authoritative source.
Applied Materials, Inc. (AMAT) reported solid performance in its fiscal year ending October 24, 2015, with net sales reaching $9.66 billiona, a 6% increase year-over-year.
The company's core Silicon Systems segment continued to be the largest revenue driver, showing a 3% increase in net sales to $6.14 billionb, bolstered by increased investment from memory customers. The Applied Global Services segment also demonstrated robust growth with a 15% increase in net sales to $2.53 billion, indicating the company's success in capturing the after-market services business. The company's strategic investments in Research, Development, and Engineering (RD&E) remained a priority, with $1.45 billion allocated in fiscal 2015, focusing on advancements in etch, chemical vapor deposition, and inspection technologies.
While the Display segment saw a significant 27% jump in net sales to $780 millionc, the Energy and Environmental Solutions segment experienced a decline in net sales by 24% to $213 million, reflecting ongoing challenges in the solar industry. Overall, Applied Materials demonstrated resilience in a dynamic market, supported by strong demand in its key semiconductor-related businesses and a commitment to innovation.
02—Key points
Key Highlights
- Net sales increased by 6% to $9.66 billion in fiscal 2015, driven by growth in semiconductor and services segments.
- The Silicon Systems segment, the largest contributor, saw net sales of $6.14 billion, up 3%, with memory customers increasing investments.
- Applied Global Services reported a 15% increase in net sales to $2.53 billion, highlighting the strength of the services business.
- The Display segment experienced a significant 27% increase in net sales to $780 million.
- Research, Development, and Engineering (RD&E) investments remained strong at $1.45 billion, focusing on key technology areas like etch and deposition.
- The Energy and Environmental Solutions segment faced headwinds, with net sales declining 24% to $213 million due to ongoing solar industry challenges.
- Backlog increased 8% to $3.14 billion by the end of fiscal 2015, signaling future revenue potential.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Applied Materials kept $0.14.
- Revenue$9.66B100.0%
- Cost of revenue−$5.71B59.1%
- Gross profit$3.95B40.9%
- Operating costs−$2.26B23.4%
- Operating income$1.69B17.5%
- Interest, other & tax−$316.0M3.3%
- Net income$1.38B14.3%
Where FY2015 revenue went
$9.66B- Cost of revenue: $5.71B, 59% of revenue
- R&D: $1.45B, 15% of revenue
- Net income: $1.38B, 14% of revenue
- Other operating costs: $808.0M, 8.4% of revenue
- Interest, other & tax: $316.0M, 3.3% of revenue
Kept 14% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed December 9, 2015Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $9.66B$9.07B | +6.5% |
| Cost of Revenue | $5.71B$5.23B | +9.1% |
| Gross Profit | $3.95B$3.84B | +2.8% |
| R&D Expenses | $1.45B$1.43B | +1.6% |
| Operating Expenses | $2.26B$2.32B | −2.8% |
| Operating Income | $1.69B$1.52B | +11.4% |
| Interest Expense | $103.00M$95.00M | +8.4% |
| Net Income | $1.38B$1.07B | +28.5% |
| EPS (Basic) | $1.13$0.88 | +28.4% |
| EPS (Diluted) | $1.12$0.87 | +28.7% |
| Shares Outstanding (Basic) | 1.21B1.22B | −0.1% |
| Shares Outstanding (Diluted) | 1.23B1.23B | −0.4% |
05—Questions
Frequently Asked Questions
What was the overall financial performance of Applied Materials in fiscal year 2015?
In fiscal year 2015, Applied Materials achieved net sales of $9.66 billion, representing a 6% increase from the previous year. The company demonstrated growth across its key segments, particularly in Silicon Systems and Applied Global Services, driven by investments in semiconductor technology and a strong services business.
How did the different business segments perform?
The Silicon Systems segment, representing 64% of net sales, grew 3% to $6.14 billion, primarily due to increased investment from memory customers. The Applied Global Services segment saw a robust 15% increase in net sales to $2.53 billion. The Display segment also performed well with a 27% rise in net sales to $780 million. However, the Energy and Environmental Solutions segment experienced a 24% decline in net sales to $213 million, reflecting continued softness in the solar market.
What is the company's strategy regarding research and development?
Applied Materials continues to prioritize innovation, investing $1.45 billion in Research, Development, and Engineering (RD&E) in fiscal 2015. These investments are focused on developing new products and technologies to address key customer challenges in areas such as advanced etch, chemical vapor deposition, and inspection technologies, crucial for enabling next-generation semiconductor devices.
What is the company's outlook for its key markets?
The company expects the mobility trend to remain a primary driver for the semiconductor industry and its Silicon Systems segment in fiscal 2016. Applied anticipates continued demand for semiconductor equipment from foundry and memory customers, as well as healthy performance in semiconductor spares and services, and display equipment.
06—Continue