01—Abstract
Summary
Summary of the 10-Q filed August 20, 2026. Cited figures are marked; the original filing is the authoritative source.
Applied Materials Inc. (AMAT) reported strong financial results for the nine months ended July 26, 2026, with revenue growing 11% year-over-year to $24.0 billiona and net income increasing by a substantial 45% to $7.4 billion.
This growth was primarily driven by the Semiconductor Systems segment, which saw a 10%b revenue increase, supported by strong demand from foundry, logic, and memory customers investing in advanced manufacturing technologies. The Applied Global Services (AGS) segment also performed well, with revenue up 18% due to increased service agreements and spares revenue. The company demonstrated improved profitability, with gross margin increasing from 48.9% to 49.8% and operating margin expanding from 30.5% to 30.9% year-over-year.
This expansion was attributed to higher revenues, increased average selling prices, and lower material and manufacturing costs. Diluted earnings per share rose to $9.22c, a significant increase from $6.29 in the prior year period. The company maintains a robust balance sheet with total assets growing to $43.5 billion and a solid cash position of $7.0 billion.
02—Key points
Key Highlights
- Strong revenue growth of 11% year-over-year to $24.0 billion for the nine months ended July 26, 2026.
- Net income surged by 45% to $7.4 billion for the nine months ended July 26, 2026.
- Diluted earnings per share increased to $9.22 from $6.29 in the prior year.
- Gross margin improved to 49.8% and operating margin expanded to 30.9% for the nine months.
- Semiconductor Systems segment revenue increased 10%, driven by foundry, logic, and memory investments.
- Applied Global Services (AGS) revenue grew 18%, indicating strong demand for services and spares.
- Company ended the period with $7.0 billion in cash and cash equivalents, indicating strong liquidity.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Applied Materials kept $0.28.
- Revenue$9.12B100.0%
- Cost of revenue−$4.53B49.7%
- Gross profit$4.59B50.3%
- Operating costs−$1.51B16.6%
- Operating income$3.08B33.7%
- Interest, other & tax−$537.0M5.9%
- Net income$2.54B27.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed August 20, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $9.12B$7.30B | +24.8% |
| Cost of Revenue | $4.53B$3.74B | +21.1% |
| Gross Profit | $4.59B$3.56B | +28.7% |
| R&D Expenses | $1.10B$901.00M | +22.1% |
| SG&A Expenses | $411.00M$428.00M | −4.0% |
| Operating Expenses | $1.51B$1.33B | +13.7% |
| Operating Income | $3.08B$2.23B | +37.7% |
| Net Income | $2.54B$1.78B | +42.7% |
| EPS (Basic) | $3.20$2.23 | +43.5% |
| EPS (Diluted) | $3.17$2.22 | +42.8% |
| Shares Outstanding (Basic) | 794.00M798.00M | −0.5% |
| Shares Outstanding (Diluted) | 800.00M802.00M | −0.2% |
05—Questions
Frequently Asked Questions
What drove the significant increase in revenue and net income?
The substantial increase in revenue and net income was primarily driven by strong performance in the Semiconductor Systems segment, fueled by customer investments in advanced manufacturing technologies for foundry, logic, and memory chips. The Applied Global Services (AGS) segment also contributed positively with increased revenue from services and spares.
How has the company's profitability changed?
Profitability has improved, with gross margin increasing from 48.9% to 49.8% and operating margin expanding from 30.5% to 30.9% for the nine months ended July 26, 2026. This improvement is due to higher revenues, increased average selling prices, and reduced material and manufacturing costs.
What is the company's current financial position and liquidity?
Applied Materials maintains a strong financial position, with total assets reaching $43.5 billion as of July 26, 2026. The company ended the period with $7.0 billion in cash and cash equivalents, indicating robust liquidity and the ability to meet short-term obligations and fund ongoing operations.
Are there any significant legal or regulatory matters impacting the company?
The company settled an export controls compliance matter with the U.S. Commerce Department for $253 million, which was paid in fiscal year 2026. While the company is subject to various legal proceedings, it does not believe at this time that any of these matters will have a material effect on its consolidated financial condition or results of operations. Risk factors related to global trade and export regulations, particularly concerning China, remain a key consideration.
06—Continue