10-QPeriod: Q3 FY2025

APPLIED MATERIALS INC /DE Quarterly Report for Q3 Ended Jul 27, 2025

Filed August 21, 2025For Securities:AMAT

Summary

Applied Materials Inc. (AMAT) reported strong revenue growth in the third quarter of fiscal year 2025, with net revenue reaching $7.302 billion, an increase of 8% year-over-year. This growth was primarily driven by the Semiconductor Systems segment, which saw a 10% increase in net revenue. The company also demonstrated improved profitability, with gross margin rising to 48.8% and operating margin reaching 30.6%, both improvements over the prior year's comparable periods. Diluted earnings per share also saw a healthy increase to $2.22, up from $2.05 in the same quarter last year. Despite a decrease in cash and cash equivalents from the previous fiscal year-end, likely due to significant share repurchases and dividend payments, the company maintains a solid financial position with substantial investments and a large remaining authorization for stock repurchases, signaling continued confidence in its future performance and commitment to returning capital to shareholders.

Financial Highlights

58 data points
Beta

Revenue

$7.30B

48.8% Gross Margin

Net Income

$1.78B

24.4% Net Margin

EPS (Diluted)

$2.22

Total Assets

$34.21B

Cash & Equivalents

$5.38B

Free Cash Flow

$2.05B

Financial Statements
Beta
Revenue$7.30B
Cost of Revenue$3.74B
Gross Profit$3.56B
R&D Expenses$901.00M
Operating Expenses$1.33B
Operating Income$2.23B
Net Income$1.78B
EPS (Basic)$2.23
EPS (Diluted)$2.22
Shares Outstanding (Basic)798.00M
Shares Outstanding (Diluted)802.00M

Key Highlights

  • 1Net revenue increased by 8% year-over-year to $7.302 billion for the three months ended July 27, 2025.
  • 2Semiconductor Systems segment revenue grew by 10% year-over-year, driven by foundry, logic, and NAND investments.
  • 3Gross margin improved to 48.8% and operating margin to 30.6% compared to the prior year's periods, indicating enhanced profitability.
  • 4Diluted earnings per share increased to $2.22 from $2.05 year-over-year, reflecting improved profitability.
  • 5The company repurchased $1.038 billion of common stock during the quarter, demonstrating a commitment to shareholder returns.
  • 6Cash and cash equivalents decreased to $5.384 billion from $8.022 billion at the prior fiscal year-end, primarily due to significant capital allocation activities including share repurchases and dividends.
  • 7Remaining authorization for stock repurchases stands at a substantial $14.8 billion as of July 27, 2025.

Frequently Asked Questions

Revenue growth was primarily driven by the Semiconductor Systems segment, which experienced a 10% year-over-year increase, supported by customer investments in foundry, logic, and NAND fabrication. Applied Global Services (AGS) also contributed with increased revenue from long-term service agreements and spares.

Profitability improved significantly. Gross margin increased to 48.8% from 47.3% in the prior year's comparable quarter, and operating margin rose to 30.6% from 28.7%. This was attributed to higher net revenue, favorable product mix, and increased average selling prices.

Applied Materials continues to demonstrate a strong commitment to returning capital to shareholders. During the quarter, the company repurchased $1.038 billion of its common stock and paid dividends. A significant remaining authorization of $14.8 billion for future stock repurchases signals ongoing capital return plans.

The company highlighted several key risks including the cyclical nature of the semiconductor and display industries, volatile global economic conditions, geopolitical factors and trade disputes (especially concerning China), supply chain disruptions, intense competition, intellectual property protection, cybersecurity threats, and the inability to attract and retain key employees. Additionally, changes in tax laws and regulations, particularly in the US and global minimum tax regimes, pose ongoing risks.