10-QPeriod: Q2 FY2024

APPLIED MATERIALS INC /DE Quarterly Report for Q2 Ended Apr 28, 2024

Filed May 23, 2024For Securities:AMAT

Summary

Applied Materials, Inc. (AMAT) reported financial results for the second quarter and first half of fiscal year 2024, demonstrating resilience and strategic execution in a dynamic market. For the quarter ended April 28, 2024, net revenue was largely flat year-over-year at $6.646 billion, with diluted earnings per share (EPS) increasing to $2.06, up from $1.86 in the prior year's comparable quarter. This performance was driven by a stable Semiconductor Systems segment, growth in Applied Global Services, and increased revenue in Display and Adjacent Markets, despite a complex global economic and geopolitical landscape. The company continues to focus on innovation and customer support, underpinning its market leadership. The first half of fiscal 2024 also showed a slight revenue decline to $13.353 billion, but EPS grew to $4.47 from $3.88 in the prior year, reflecting improved operational efficiencies and product mix. Notably, the company experienced a significant revenue increase from China, driven by semiconductor equipment spending, while revenue from Korea and Taiwan saw a decline. AMAT's strong liquidity position, substantial cash reserves, and ongoing commitment to returning capital to shareholders through dividends and share repurchases highlight its financial strength and management's confidence in future prospects.

Financial Highlights

58 data points
Beta

Revenue

$6.65B

47.4% Gross Margin

Net Income

$1.72B

25.9% Net Margin

EPS (Diluted)

$2.06

Total Assets

$31.95B

Cash & Equivalents

$7.08B

Free Cash Flow

$1.14B

Financial Statements
Beta
Revenue$6.65B
Cost of Revenue$3.49B
Gross Profit$3.15B
R&D Expenses$785.00M
Operating Expenses$1.24B
Operating Income$1.91B
Interest Expense$59.00M
Net Income$1.72B
EPS (Basic)$2.08
EPS (Diluted)$2.06
Shares Outstanding (Basic)830.00M
Shares Outstanding (Diluted)836.00M

Key Highlights

  • 1Net revenue for the second quarter of fiscal 2024 was $6.646 billion, a slight increase of 0.2% year-over-year, indicating stable demand.
  • 2Diluted earnings per share (EPS) increased to $2.06 in the second quarter of fiscal 2024, up from $1.86 in the prior year, demonstrating improved profitability.
  • 3The Semiconductor Systems segment, the largest revenue contributor, saw a slight decrease in revenue but maintained a strong operating margin.
  • 4Applied Global Services segment revenue grew by 7.2% year-over-year, driven by service agreements and 200mm equipment demand, indicating strong aftermarket support.
  • 5Revenue from China surged by 101% year-over-year in the second quarter, becoming the largest geographic market and reflecting significant investment in semiconductor manufacturing in the region.
  • 6The company continues to return capital to shareholders, with substantial amounts available for stock repurchases ($11.2 billion remaining) and consistent dividend payments.
  • 7Despite a challenging global environment, the company maintains a strong balance sheet with $7.085 billion in cash and cash equivalents and robust liquidity.

Frequently Asked Questions

In the second quarter of fiscal year 2024, Applied Materials reported net revenue of $6.646 billion, which was largely flat compared to $6.630 billion in the same period last year. Diluted earnings per share (EPS) increased to $2.06 from $1.86, indicating improved profitability and operational efficiency.

Applied Materials' revenue is primarily driven by its three reportable segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment is the largest contributor, providing capital equipment for chip manufacturing. Applied Global Services offers ongoing support and upgrades for existing equipment, while Display and Adjacent Markets caters to the manufacturing of displays and other related products. Geographic regions, particularly China, are also significant revenue drivers.

Applied Materials maintains a strong financial position with significant cash reserves and continues to return value to shareholders through a substantial stock repurchase program, with approximately $11.2 billion remaining authorization as of April 28, 2024. The company also consistently pays quarterly cash dividends.

The Semiconductor Systems segment revenue saw a slight decrease year-over-year, primarily due to lower customer investments in leading-edge manufacturing technologies for foundry and logic. However, increased investments in memory technology transitions and mature manufacturing technologies provided some offset. The segment maintained a strong operating margin, reflecting its strategic importance and the company's ability to manage costs and product mix.