Applied Materials (AMAT) AMAT Financial Results Summary
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Applied Materials (AMAT) Q2 2026 Financial Results Summary
Applied Materials, Inc. (NASDAQ: AMAT) released its financial results for the second quarter of 2026 on May 14, 2026. The company experienced strong growth across several key performance metrics.
Financial Highlights
- Record Revenue:
- Generated $7.91 billion, which represents an 11% increase compared to $7.10 billion in Q2 FY2025.
- Gross Margin:
- GAAP gross margin was 49.9%, up from 49.1% (increase of 0.8 percentage points).
- Non-GAAP gross margin was 50.0%, up from 49.2% (increase of 0.8 percentage points).
- Operating Income:
- GAAP operating income was $2.52 billion, which is 31.9% of revenue, compared to $2.17 billion (30.5% of revenue) in Q2 FY2025 (increase of 1.4 percentage points).
- Non-GAAP operating income was $2.54 billion, or 32.1% of revenue, up from $1.85 billion (30.7% of revenue) (increase of 1.4 percentage points).
- Net Income:
- Reported net income was $2.81 billion, an increase of 31% from $2.14 billion in Q2 FY2025.
- Earnings Per Share (EPS):
- GAAP EPS reached $3.51, marking a 33% increase from $2.63 a year ago.
- Non-GAAP EPS was $2.86, up 20% from $2.39 in the same quarter of the previous year.
- Free Cash Flow:
- Non-GAAP free cash flow was reported at $210 million, a 80% decrease compared to $1.06 billion in Q2 FY2025.
Shareholder Returns
- The company distributed $765 million to shareholders, which included:
- $365 million in dividends.
- $400 million via share repurchases.
- Dividend Increase:
- Applied Materials announced a 15% increase in its quarterly cash dividend, raising it from $0.46 to $0.53 per share. This marks nine consecutive years of dividend increases and more than doubles the dividend per share from four years ago.
Operational Highlights
- Partnerships and Collaborations:
- Announced new EPIC Center engagements aimed at accelerating commercialization of next-generation semiconductor technologies.
- A new partnership with TSMC was established to boost the development of semiconductor technologies vital for AI.
- Partnerships with universities including Arizona State University and Stanford University to advance energy-efficient innovations for AI chips.
- Collaborated with Advantest Corporation, SK hynix, and Micron Technology on various semiconductor technology developments.
- Product Innovations:
- Introduction of advanced chip-making systems designed to create the smallest features in 3D Gate-All-Around transistors for cutting-edge logic chips aimed at supporting AI demands.
- Launched Precision™ Selective Nitride PECVD and Trillium™ ALD technologies for improved chip performance.
Segment Information
- Semiconductor Systems:
- Revenue for this segment was $5.97 billion, up from $5.40 billion in Q2 FY2025.
- Gross margin rose to 54.7%, compared to 53.5% previously.
- Operating income increased to $2.09 billion with an operating margin of 35.1% compared to 32.8% in the prior year.
- Applied Global Services:
- Revenue was reported at $1.67 billion, up from $1.42 billion in the prior year.
- Gross margin improved to 34.7% from 33.5%.
Business Outlook
- For Q3 FY2026, Applied Materials anticipates total revenue of $8.95 billion (+/- $500 million) and non-GAAP diluted EPS of $3.36 (+/- $0.20).
- Continued focus on operational and supply chain readiness is emphasized to support customer growth, particularly in the rapidly expanding AI and semiconductor sectors.
Conclusion
Applied Materials reported impressive growth in Q2 2026, marked by record revenues and earnings. The ongoing investments in technology and strategic partnerships point towards a robust outlook in the semiconductor market, particularly driven by advancements in AI technology.
Note: All amounts in the following tables are in millions.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
| Three Months Ended | Six Months Ended | |||
|---|---|---|---|---|
| April 26, 2026 | April 27, 2025 | April 26, 2026 | April 27, 2025 | |
| Revenue | $7,910 | $7,100 | $14,922 | $14,266 |
| Cost of products sold | 3,963 | 3,615 | 7,540 | 7,285 |
| Gross profit | 3,947 | 3,485 | 7,382 | 6,981 |
| Operating expenses: | ||||
| Research, development and engineering | 1,027 | 893 | 1,955 | 1,752 |
| Marketing and selling | 233 | 216 | 455 | 422 |
| General and administrative | 164 | 207 | 353 | 463 |
| Legal settlement | — | — | 253 | — |
| Restructuring charges | — | — | 12 | — |
| Total operating expenses | 1,424 | 1,316 | 3,028 | 2,637 |
| Income from operations | 2,523 | 2,169 | 4,354 | 4,344 |
| Interest expense | 69 | 68 | 138 | 132 |
| Interest and other income (expense) net | 771 | 221 | 1,337 | 229 |
| Income before income taxes | 3,225 | 2,322 | 5,553 | 4,441 |
| Provision for income taxes | 419 | 185 | 721 | 1,119 |
| Net income | $2,806 | $2,137 | $4,832 | $3,322 |
| Earnings per share: | ||||
| Basic | $3.53 | $2.64 | $6.09 | $4.10 |
| Diluted | $3.51 | $2.63 | $6.05 | $4.08 |
| Weighted average number of shares: | ||||
| Basic | 794 | 809 | 794 | 811 |
| Diluted | 799 | 812 | 799 | 815 |
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
| April 26, 2026 | October 26, 2025 | |
|---|---|---|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $6,301 | $7,241 |
| Short-term investments | 1,940 | 1,332 |
| Accounts receivable, net | 6,372 | 5,185 |
| Inventories | 6,343 | 5,915 |
| Other current assets | 1,615 | 1,208 |
| Total current assets | 22,571 | 20,881 |
| Long-term investments | 5,142 | 4,327 |
| Property, plant and equipment, net | 5,255 | 4,610 |
| Goodwill | 3,824 | 3,707 |
| Purchased technology and other intangible assets, net | 330 | 226 |
| Deferred income taxes and other assets | 3,164 | 2,548 |
| Total assets | $40,286 | $36,299 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| Current liabilities: | ||
| Short-term debt | $1,199 | $100 |
| Accounts payable and accrued expenses | 5,229 | 5,333 |
| Contract liabilities | 2,570 | 2,566 |
| Total current liabilities | 8,998 | 7,999 |
| Long-term debt | 5,256 | 6,455 |
| Income taxes payable | 704 | 356 |
| Other liabilities | 1,419 | 1,074 |
| Total liabilities | 16,377 | 15,884 |
| Total stockholders’ equity | 23,909 | 20,415 |
| Total liabilities and stockholders’ equity | $40,286 | $36,299 |
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