10-KPeriod: FY2022

APPLIED MATERIALS INC /DE Annual Report, Year Ended Oct 30, 2022

Filed December 16, 2022For Securities:AMAT

Summary

Applied Materials Inc. (AMAT) demonstrated robust performance in fiscal year 2022, with net sales reaching $25.785 billion, a 12% increase year-over-year. This growth was primarily driven by strong demand in the Semiconductor Systems segment, which benefited from increased customer investments in new technology transitions and capacity expansion. The Applied Global Services segment also showed growth, supported by an expanding installed base and service agreements. However, the company faced headwinds in its Display and Adjacent Markets segment, which saw a 19% decline in net sales due to reduced customer investment. Geographically, while sales in Taiwan and the US showed significant increases, sales in China and Korea experienced a decrease. The company is also navigating supply chain constraints and the impact of new U.S. export regulations on sales to China, estimating a potential $2.5 billion reduction in net sales for fiscal year 2023. Despite these challenges, Applied Materials continues to invest heavily in research and development to maintain its technological leadership.

Financial Highlights

61 data points
Beta

Revenue

$25.79B

46.5% Gross Margin

Net Income

$6.53B

25.3% Net Margin

EPS (Diluted)

$7.44

Total Assets

$26.73B

Cash & Equivalents

$2.00B

Free Cash Flow

$4.61B

Financial Statements
Beta
Revenue$25.79B
Cost of Revenue$13.79B
Gross Profit$11.99B
R&D Expenses$2.77B
Operating Expenses$4.21B
Operating Income$7.79B
Interest Expense$228.00M
Net Income$6.53B
EPS (Basic)$7.49
EPS (Diluted)$7.44
Shares Outstanding (Basic)871.00M
Shares Outstanding (Diluted)877.00M

Key Highlights

  • 1Net sales increased by 12% to $25.785 billion in fiscal year 2022, driven by the Semiconductor Systems segment.
  • 2The Semiconductor Systems segment saw a 15% increase in net sales, reflecting strong customer investment in new technology and capacity.
  • 3The Applied Global Services segment grew by 11%, supported by an increasing installed equipment base and service agreements.
  • 4The Display and Adjacent Markets segment experienced a 19% decrease in net sales due to lower customer investments.
  • 5The company reported significant stock repurchases totaling $6.1 billion in fiscal year 2022, alongside consistent dividend payments.
  • 6Applied Materials is managing supply chain constraints and the impact of new export regulations, particularly for sales to China, with an estimated fiscal 2023 impact.
  • 7Research and Development (RD&E) expenses increased by 11% to $2.771 billion, underscoring the company's commitment to innovation.

Frequently Asked Questions

Applied Materials' revenue growth in fiscal year 2022 was primarily driven by strong demand in its Semiconductor Systems segment, fueled by customer investments in new technology transitions and capacity expansion. The Applied Global Services segment also contributed to growth through an increasing installed base of equipment and service agreements.

The company is facing challenges in its Display and Adjacent Markets segment due to reduced customer investment. Additionally, new U.S. export regulations announced in October 2022 are impacting sales to China, with Applied Materials estimating a potential reduction of up to $2.5 billion in net sales and a decrease in overall gross margin for fiscal year 2023 due to these regulations.

Applied Materials demonstrated a strong commitment to returning capital to shareholders in fiscal year 2022. The company repurchased approximately $6.1 billion of its common stock and continued to pay quarterly cash dividends. A significant portion of the previously authorized stock repurchase program remained available at the end of the fiscal year, indicating ongoing capital return plans.

Applied Materials anticipates a decline in memory customer spending in fiscal year 2023 compared to fiscal year 2022, attributed to weaknesses in consumer electronics and personal computer markets. However, demand for advanced foundry and logic is expected to remain strong as customers continue to invest in new technology. The company is actively managing the implications of new export regulations on its sales, particularly to China.