01—Abstract
Summary
Summary of the 8-K filed November 14, 2024. Cited figures are marked; the original filing is the authoritative source.
Applied Materials reported fiscal fourth quarter and full-year 2024 results for the period ended October 27, 2024.
Q4 revenue reached a record $7.05 billiona, up 5% year over year, but GAAP diluted EPS fell 12% to $2.09 as a $244 million unrealized loss on strategic investments weighed on results. Non-GAAP EPS rose 9% to $2.32. Full-year revenue grew 2% to $27.18 billion, and GAAP EPS of $8.61 (up 6%) and non-GAAP EPS of $8.65 (up 7%) were both records, marking the company's fifth consecutive year of growth.
Management credited demand tied to AI and energy-efficient computing and described the industry roadmap as increasingly dependent on materials engineering. Cash generation remained strong, with fiscal 2024 operating cash flow of $8.68 billionb and non-GAAP free cash flow of $7.49 billion. The company returned $5.01 billion to shareholders in the year, including $3.82 billion in buybacks and $1.19 billion in dividends, and ended the year with $9.5 billion in cash and short- and long-term investments against $6.26 billion in total debt.
Q4 Semiconductor Systems revenue rose 6% and Applied Global Services grew 11%, while Display collapsed to $211 millionc in Q4 from $298 million a year earlier. China's share of revenue jumped to 37% for the year (from 27%), a concentration that carries export-control risk. For Q1 fiscal 2025, the company guided revenue to about $7.15 billion (±$400 million) and non-GAAP EPS to about $2.29 (±$0.18).
02—Key points
Key Highlights
- Q4 FY2024 revenue of $7.05B, up 5% YoY, a company record; GAAP operating income of $2.05B (29.0% margin) also a record
- Q4 GAAP diluted EPS fell 12% to $2.09, driven by a $244M unrealized loss on strategic investments; non-GAAP EPS rose 9% to a record $2.32
- FY2024 revenue of $27.18B (+2%) and GAAP EPS of $8.61 (+6%) were records; fifth consecutive year of growth
- Strong cash generation: FY2024 operating cash flow of $8.68B and non-GAAP free cash flow of $7.49B
- Shareholder returns of $5.01B in FY2024, including $3.82B in buybacks and $1.19B in dividends
- Revenue concentration rising: China rose to 37% of FY2024 revenue from 27% in FY2023, while Display revenue fell sharply in Q4 to $211M from $298M
- Q1 FY2025 guidance: revenue of approximately $7.15B (±$400M) and non-GAAP EPS of approximately $2.29 (±$0.18)
03—Questions
Frequently Asked Questions
Why did GAAP EPS decline in Q4 even though revenue and operating income grew?
The decline was driven by non-operating items. Interest and other income (expense), net swung to an $85M expense in Q4 from $259M of income a year earlier, largely due to a $244M unrealized loss on strategic investments. Operating income itself rose to $2.05B from $1.97B, and the non-GAAP measure excludes this investment mark-to-market impact.
How strong is the company's balance sheet and liquidity?
Applied ended FY2024 with $8.02B in cash and equivalents, $1.45B in short-term investments and $2.79B in long-term investments, for roughly $12.3B in total cash and investments. Total debt was about $6.26B (short-term $799M plus long-term $5.46B), leaving the company in a net cash position. Stockholders' equity rose to $19.0B.
What is driving demand and what does management see as the growth catalyst?
Management pointed to AI and energy-efficient computing as key demand drivers, arguing that the semiconductor industry's roadmap is increasingly dependent on materials engineering, where Applied describes itself as the clear leader. Applied Global Services, its service business, grew to $6.23B for FY2024, up 9% from $5.73B, and its Q4 operating margin reached 30.0%.
What should investors expect for the next quarter?
For Q1 FY2025, Applied guided net revenue to approximately $7.15B, plus or minus $400M, and non-GAAP diluted EPS to approximately $2.29, plus or minus $0.18. The EPS outlook excludes known acquisition-related charges of $0.01 per share and includes a $0.09 per share tax benefit from intra-entity intangible asset transfers.
What risks stand out in this report?
The filing highlights heavy exposure to China, which made up 37% of FY2024 revenue and whose share rose sharply. Forward-looking statements flag new or changed export regulations and license requirements as a risk to the company's ability to sell products there. Customer concentration, geopolitical conflict, and the variability of results across products and segments are also cited. Display segment margins also fell sharply, with Q4 operating margin dropping to 2.4% from 21.1%.
04—Continue