01—Abstract
Summary
Summary of the 10-K filed December 13, 2024. Cited figures are marked; the original filing is the authoritative source.
Applied Materials, Inc. (AMAT) reported a solid fiscal year 2024, demonstrating revenue growth and stable operating margins in a dynamic semiconductor and display market.
The company's strategic focus on materials engineering solutions for advanced chip and display manufacturing continues to drive its leadership position. While the Semiconductor Systems segment remains the largest contributor to revenue, the Applied Global Services (AGS) segment showed notable growth, indicating the increasing importance of its service and support offerings. The company navigated a complex global environment characterized by evolving trade policies and supply chain considerations.
Despite these challenges, AMAT has maintained a strong financial position, supported by robust cash flow from operations and a significant cash reserve. The company continues to invest heavily in research and development, crucial for staying ahead in a rapidly evolving technological landscape. Investors should note the company's ongoing commitment to shareholder returns through dividends and share repurchases, balanced with strategic reinvestment in future growth opportunities.
02—Key points
Key Highlights
- Revenue increased by 2% to $27.176 billion in fiscal year 2024, demonstrating resilience in a competitive market.
- Operating margin remained stable at 28.9% in fiscal year 2024, indicating effective cost management and operational efficiency.
- The Semiconductor Systems segment continues to be the primary revenue driver, accounting for 73% of total net revenue.
- Applied Global Services (AGS) segment experienced significant revenue growth of 9% in fiscal year 2024, highlighting the increasing demand for services and support.
- The company maintained a strong liquidity position with $12.26 billion in cash, cash equivalents, and investments as of October 27, 2024.
- Significant investment in Research, Development, and Engineering (RD&E) of $3.233 billion in fiscal year 2024 underscores a commitment to innovation and future technological advancements.
- Approximately $8.9 billion remained available for future stock repurchases as of October 27, 2024, signaling continued capital return to shareholders.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Applied Materials kept $0.26.
- Revenue$27.18B100.0%
- Cost of revenue−$14.28B52.5%
- Gross profit$12.90B47.5%
- Operating costs−$5.03B18.5%
- Operating income$7.87B28.9%
- Interest, other & tax−$690.0M2.5%
- Net income$7.18B26.4%
Where FY2024 revenue went
$27.18B- Cost of revenue: $14.28B, 53% of revenue
- Net income: $7.18B, 26% of revenue
- R&D: $3.23B, 12% of revenue
- SG&A: $1.80B, 6.6% of revenue
- Interest, other & tax: $690.0M, 2.5% of revenue
Kept 26% as net incomeInterest, other & tax $690.0M · 2.5%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed December 13, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $27.18B$26.52B | +2.5% |
| Cost of Revenue | $14.28B$14.13B | +1.0% |
| Gross Profit | $12.90B$12.38B | +4.1% |
| R&D Expenses | $3.23B$3.10B | +4.2% |
| SG&A Expenses | $1.80B$1.63B | +10.4% |
| Operating Expenses | $5.03B$4.73B | +6.3% |
| Operating Income | $7.87B$7.65B | +2.8% |
| Net Income | $7.18B$6.86B | +4.7% |
| EPS (Basic) | $8.68$8.16 | +6.4% |
| EPS (Diluted) | $8.61$8.11 | +6.2% |
| Shares Outstanding (Basic) | 827.00M840.00M | −1.5% |
| Shares Outstanding (Diluted) | 834.00M845.00M | −1.3% |
05—Questions
Frequently Asked Questions
What were the key drivers of revenue growth in fiscal year 2024?
Revenue growth in fiscal year 2024 was primarily driven by continued strategic investments from customers in new semiconductor capacity and technology transitions within the Semiconductor Systems segment, particularly in DRAM. The Applied Global Services (AGS) segment also saw significant growth due to increased demand for long-term service agreements and customer spending on spares. The Display segment saw growth from IT product display fabrication equipment, although this was partially offset by lower investments in TV display equipment.
How is the company managing risks related to global trade and geopolitical factors?
Applied Materials acknowledges significant risks associated with global trade issues, including evolving trade policies, export regulations, and geopolitical tensions, particularly concerning China. The company is actively cooperating with U.S. government inquiries regarding export controls and customer shipments. They highlight that new export rules issued in December 2024 are expected to reduce backlog by approximately $549 million. The company's strategy involves navigating these complex regulatory environments while continuing to serve its global customer base.
What is the company's strategy for future growth and innovation?
The company's long-term growth strategy is centered on developing innovative materials engineering solutions and expanding into new and adjacent markets. This is supported by significant and continued investments in Research, Development, and Engineering (RD&E), aimed at delivering new products and technologies that address key customer challenges at technology inflections. Key areas of focus include advanced patterning, transistor and interconnect fabrication, process control, and packaging technologies for semiconductors, as well as developing differentiated equipment for next-generation display technologies.
How is the company returning capital to shareholders?
Applied Materials demonstrates a commitment to returning capital to shareholders through dividends and share repurchases. The company paid quarterly cash dividends totaling $1.2 billion in fiscal year 2024. Additionally, they have a substantial stock repurchase program, with approximately $8.9 billion remaining available for future repurchases as of October 27, 2024, indicating ongoing efforts to enhance shareholder value.
06—Continue