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Applied Materials 8-K Report, Financial Results (Aug 15, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed August 15, 2024
Period End
August 15, 2024
Security
AMAT
In the record · 2016–202610-K1010-Q338-K102

AMAT filed 10 annual reports (10-K), 33 quarterly reports (10-Q) and 102 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Sep ’17Sep ’17
  2. Material agreement8-K · May ’20May ’20
  3. Leadership change8-K · Oct ’22Oct ’22
  4. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 8-K filed August 15, 2024. Cited figures are marked; the original filing is the authoritative source.

Applied Materials reported fiscal Q3 2024 results (quarter ended July 28, 2024) with record revenue of $6.78 billiona, up 5% year over year.

GAAP diluted EPS rose 11% to $2.05b and non-GAAP diluted EPS rose 12% to $2.12. GAAP operating margin was 28.7% and non-GAAP operating margin was 28.8%, up 0.7 and 0.5 points. Management attributed the results to AI-driven demand for its materials engineering portfolio and said the quarter's EPS came in toward the high end of guidance.

Semiconductor Systems was the main driver, with revenue of $4.92 billionc and a 34.8% GAAP operating margin, and DRAM rose to 24% of segment revenue from 17%. Cash generation and capital returns were solid but mixed on a free cash flow basis. Cash from operations was $2.39 billion, but non-GAAP free cash flow fell 10% to $2.09 billion because of higher capital spending relative to the prior year's quarter, and total cash returned to shareholders was $1.19 billion ($861 million in buybacks and $331 million in dividends).

Cash and equivalents increased to $8.29 billion, while long-term debt rose to $6.16 billiond after a $694 million debt borrowing in the quarter. Revenue mix shifted notably: China grew to 32% of net revenue from 27%, while Europe fell to $339 million from $661 million. For the fourth quarter of fiscal 2024, management guided to net revenue of approximately $6.93 billion (plus or minus $400 million) and non-GAAP diluted EPS of $2.00 to $2.36, a wide range that reflects uncertainty around items such as tax effects and acquisition charges.

Investors will likely focus on whether the AI-related demand strength can offset the wider geographic and export-control risks described in the forward-looking statements, and on whether the cash flow decline is temporary. This filing is a Form 8-K furnishing the earnings press release under Item 2.02, and the information is not deemed filed under Section 18 of the Exchange Act.

02—Key points

Key Highlights

  1. Record fiscal Q3 2024 net revenue of $6.78 billion, up 5% year over year, with GAAP gross margin of 47.3% (up 1.0 point).
  2. GAAP diluted EPS of $2.05 (up 11%) and non-GAAP diluted EPS of $2.12 (up 12%); GAAP net income of $1.71 billion (up 9%).
  3. Semiconductor Systems revenue of $4.92 billion (up 5%) with a 34.8% GAAP operating margin; DRAM rose to 24% of segment mix from 17%, while foundry/logic fell to 72% from 79%.
  4. Non-GAAP free cash flow declined 10% to $2.09 billion, while cash from operations was $2.39 billion, and capital expenditures were $297 million.
  5. Shareholder returns totaled $1.19 billion in the quarter ($861 million in share repurchases and $331 million in dividends); cash and equivalents rose to $8.29 billion.
  6. Q4 FY2024 guidance: net revenue of approximately $6.93 billion (plus or minus $400 million) and non-GAAP diluted EPS between $2.00 and $2.36.
  7. Geographic mix shifted toward China (32% of revenue vs. 27%) and Southeast Asia, while Europe revenue fell to $339 million from $661 million year over year.

03—Questions

Frequently Asked Questions

  1. How did Applied Materials perform in fiscal Q3 2024 compared with the prior year?

    Net revenue rose 5% to a record $6.78 billion, GAAP operating income rose 8% to $1.94 billion, and GAAP diluted EPS rose 11% to $2.05. Non-GAAP diluted EPS rose 12% to $2.12. Margins expanded modestly, with GAAP operating margin at 28.7%, up 0.7 points.

  2. What is the company guiding for the fourth quarter of fiscal 2024?

    Applied expects net revenue of approximately $6.93 billion, plus or minus $400 million, and non-GAAP diluted EPS of $2.00 to $2.36. The EPS guidance excludes known acquisition-related charges of $0.01 per share and includes a $0.02 per share net income tax benefit from intra-entity intangible asset transfers, but does not reflect unknown items or unpredictable tax effects.

  3. Why did free cash flow decline even though operating cash flow was strong?

    Non-GAAP free cash flow fell 10% to $2.09 billion from $2.33 billion because capital expenditures were $297 million after deducting from $2.39 billion in operating cash flow. The filing does not give a detailed explanation of the year-over-year movement in operating cash flow beyond the reconciliation tables, so investors should review the earnings call for management commentary.

  4. What drove growth in the Semiconductor Systems segment and what are the risks?

    Semiconductor Systems revenue rose to $4.92 billion from $4.68 billion, and operating margin improved to 34.8% from 33.5%. Management attributes demand to AI leadership races. The forward-looking statements flag risks including export regulations and license requirements, concentrated customer bases, geopolitical conflicts, and the timing of technology transitions.

  5. Does this filing reflect any changes to the company's capital structure or shareholder returns?

    Long-term debt increased to $6.16 billion from $5.46 billion at fiscal year-end 2023 after a $694 million debt borrowing in the quarter. Share repurchases of $861 million and dividends of $331 million were paid in the quarter, and nine-month repurchases totaled $2.38 billion. The filing itself is an earnings release furnished under Item 2.02 and does not announce new capital return programs.

04—Continue

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