Advertisement
New Zealand markets close in 3 hours 23 minutes
  • NZX 50

    11,814.01
    +17.80 (+0.15%)
     
  • NZD/USD

    0.5920
    +0.0028 (+0.47%)
     
  • NZD/EUR

    0.5549
    +0.0026 (+0.47%)
     
  • ALL ORDS

    7,903.60
    +86.20 (+1.10%)
     
  • ASX 200

    7,652.80
    +85.50 (+1.13%)
     
  • OIL

    82.92
    -0.22 (-0.26%)
     
  • GOLD

    2,394.00
    -19.80 (-0.82%)
     
  • NASDAQ

    17,037.65
    -356.65 (-2.05%)
     
  • FTSE

    7,895.85
    +18.80 (+0.24%)
     
  • Dow Jones

    37,986.40
    +211.00 (+0.56%)
     
  • DAX

    17,737.36
    -100.04 (-0.56%)
     
  • Hang Seng

    16,410.83
    +186.69 (+1.15%)
     
  • NIKKEI 225

    37,214.75
    +146.40 (+0.39%)
     
  • NZD/JPY

    91.5070
    +0.4360 (+0.48%)
     

Applied Materials Announces First Quarter 2024 Results

Applied Materials, Inc.
Applied Materials, Inc.
  • Revenue $6.71 billion, flat year over year

  • GAAP operating margin 29.3 percent and non-GAAP operating margin 29.5 percent, up 0.1 points and flat year over year, respectively

  • GAAP EPS $2.41 and non-GAAP EPS $2.13, up 19 percent and 5 percent year over year, respectively

  • Generated $2.33 billion in cash from operations

SANTA CLARA, Calif., Feb. 15, 2024 (GLOBE NEWSWIRE) -- Applied Materials, Inc. (NASDAQ: AMAT) today reported results for its first quarter ended Jan. 28, 2024.

First Quarter Results

Applied generated revenue of $6.71 billion. On a GAAP basis, the company reported gross margin of 47.8 percent, operating income of $1.97 billion or 29.3 percent of net revenue, and earnings per share (EPS) of $2.41.

ADVERTISEMENT

On a non-GAAP basis, the company reported gross margin of 47.9 percent, operating income of $1.98 billion or 29.5 percent of net revenue, and EPS of $2.13.

The recently disclosed change in useful lives of certain property, plant and equipment increased GAAP and non-GAAP EPS by $0.03.

The company generated $2.33 billion in cash from operations and distributed $966 million to shareholders including $700 million in share repurchases and $266 million in dividends.

“Applied Materials delivered strong results in the first quarter of fiscal 2024 and has outperformed our markets for the fifth consecutive year,” said Gary Dickerson, President and CEO. “Our leadership positions at key semiconductor inflections support continued outperformance as customers ramp next-generation chip technologies critical to AI and IoT over the next several years.”

Results Summary

 

Q1 FY2024

 

Q1 FY2023

 

Change

 

(In millions, except per share amounts and percentages)

Net revenue

$

6,707

 

 

$

6,739

 

 

Gross margin

 

47.8

%

 

 

46.7

%

 

1.1 points

Operating margin

 

29.3

%

 

 

29.2

%

 

0.1 points

Net income

$

2,019

 

 

$

1,717

 

 

18%

Diluted earnings per share

$

2.41

 

 

$

2.02

 

 

19%

Non-GAAP Results

 

 

 

 

 

Non-GAAP gross margin

 

47.9

%

 

 

46.8

%

 

1.1 points

Non-GAAP operating margin

 

29.5

%

 

 

29.5

%

 

Non-GAAP net income

$

1,782

 

 

$

1,724

 

 

3%

Non-GAAP diluted EPS

$

2.13

 

 

$

2.03

 

 

5%

Non-GAAP free cash flow

$

2,096

 

 

$

1,983

 

 

6%

 

 

 

 

 

 

 

 

 

 

A reconciliation of the GAAP and non-GAAP results is provided in the financial tables included in this release. See also “Use of Non-GAAP Financial Measures” section.

Business Outlook

In the second quarter of fiscal 2024, Applied expects net revenue to be approximately $6.50 billion, plus or minus $400 million. Non-GAAP diluted EPS is expected to be in the range of $1.79 to $2.15.

This outlook for non-GAAP diluted EPS excludes known charges related to completed acquisitions of $0.01 per share and includes the normalized tax benefit of share-based compensation of $0.01 per share and includes a net income tax benefit related to intra-entity intangible asset transfers of $0.02 per share, but does not reflect any items that are unknown at this time, such as any additional charges related to acquisitions or other non-operational or unusual items, as well as other tax-related items, which we are not able to predict without unreasonable efforts due to their inherent uncertainty.

First Quarter Reportable Segment Information

Effective in the first quarter of fiscal 2024, management began including share-based compensation expense in the evaluation of reportable segments' performance. Prior-year numbers have been recast to conform to the current-year presentation.

Semiconductor Systems

Q1 FY2024

 

Q1 FY2023

 

(In millions, except percentages)

Net revenue

$

4,909

 

 

$

5,162

 

Foundry, logic and other

 

62

%

 

 

77

%

DRAM

 

34

%

 

 

13

%

Flash memory

 

4

%

 

 

10

%

Operating income

$

1,744

 

 

$

1,855

 

Operating margin

 

35.5

%

 

 

35.9

%

Non-GAAP Results

 

 

Non-GAAP operating income

$

1,754

 

 

$

1,864

 

Non-GAAP operating margin

 

35.7

%

 

 

36.1

%


Applied Global Services

Q1 FY2024

 

Q1 FY2023

 

(In millions, except percentages)

Net revenue

$

1,476

 

 

$

1,369

 

Operating income

$

417

 

 

$

345

 

Operating margin

 

28.3

%

 

 

25.2

%

Non-GAAP Results

 

 

Non-GAAP operating income

$

417

 

 

$

345

 

Non-GAAP operating margin

 

28.3

%

 

 

25.2

%


Display and Adjacent Markets

Q1 FY2024

 

Q1 FY2023

 

(In millions, except percentages)

Net revenue

$

244

 

 

$

167

 

Operating income

$

25

 

 

$

3

 

Operating margin

 

10.2

%

 

 

1.8

%

Non-GAAP Results

 

 

Non-GAAP operating income

$

25

 

 

$

3

 

Non-GAAP operating margin

 

10.2

%

 

 

1.8

%

 

 

 

 

 

 

 

 

Use of Non-GAAP Financial Measures

Applied provides investors with certain non-GAAP financial measures, which are adjusted for the impact of certain costs, expenses, gains and losses, including certain items related to mergers and acquisitions; restructuring and severance charges and any associated adjustments; impairments of assets; gain or loss, dividends and impairments on strategic investments; certain income tax items and other discrete adjustments. On a non-GAAP basis, the tax effect related to share-based compensation is recognized ratably over the fiscal year. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release.

Management uses these non-GAAP financial measures to evaluate the company’s operating and financial performance and for planning purposes, and as performance measures in its executive compensation program. Applied believes these measures enhance an overall understanding of its performance and investors’ ability to review the company’s business from the same perspective as the company’s management, and facilitate comparisons of this period’s results with prior periods on a consistent basis by excluding items that management does not believe are indicative of Applied's ongoing operating performance. There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles, may be different from non-GAAP financial measures used by other companies, and may exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.

Webcast Information

Applied Materials will discuss these results during an earnings call that begins at 1:30 p.m. Pacific Time today. A live webcast and related slide presentation will be available at www.appliedmaterials.com. A replay will be available on the website beginning at 5:00 p.m. Pacific Time today.

Forward-Looking Statement

This press release contains forward-looking statements, including those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, technology transitions, our business and financial performance and market share positions, our capital allocation and cash deployment strategies, our investment and growth strategies, our development of new products and technologies, our business outlook for the second quarter of fiscal 2024 and beyond, and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products, our ability to meet customer demand, and our suppliers' ability to meet our demand requirements; global economic, political and industry conditions, including rising inflation and interest rates; the implementation and interpretation of new export regulations and license requirements, and their impact on our ability to export products and provide services to customers and on our results of operations; global trade issues and changes in trade and export license policies; our ability to obtain licenses or authorizations on a timely basis, if at all; consumer demand for electronic products; the demand for semiconductors; customers’ technology and capacity requirements; the introduction of new and innovative technologies, and the timing of technology transitions; our ability to develop, deliver and support new products and technologies; the concentrated nature of our customer base; our ability to expand our current markets, increase market share and develop new markets; market acceptance of existing and newly developed products; our ability to obtain and protect intellectual property rights in key technologies; our ability to achieve the objectives of operational and strategic initiatives, align our resources and cost structure with business conditions, and attract, motivate and retain key employees; the effects of geopolitical turmoil or conflicts, and of regional or global health epidemics; acquisitions, investments and divestitures; changes in income tax laws; the variability of operating expenses and results among products and segments, and our ability to accurately forecast future results, market conditions, customer requirements and business needs; our ability to ensure compliance with applicable law, rules and regulations and other risks and uncertainties described in our SEC filings, including our recent Forms 10-K and 8-K. All forward-looking statements are based on management’s current estimates, projections and assumptions, and we assume no obligation to update them.

About Applied Materials

Applied Materials, Inc. (Nasdaq: AMAT) is the leader in materials engineering solutions used to produce virtually every new chip and advanced display in the world. Our expertise in modifying materials at atomic levels and on an industrial scale enables customers to transform possibilities into reality. At Applied Materials, our innovations make possible a better future. Learn more at www.appliedmaterials.com.

Contact:

Ricky Gradwohl (editorial/media) 408.235.4676
Michael Sullivan (financial community) 408.986.7977


 

APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

 

 

Three Months Ended

(In millions, except per share amounts)

January 28,
2024

 

January 29,
2023

Net revenue

$

6,707

 

 

$

6,739

 

Cost of products sold

 

3,503

 

 

 

3,594

 

Gross profit

 

3,204

 

 

 

3,145

 

Operating expenses:

 

 

 

Research, development and engineering

 

754

 

 

 

771

 

Marketing and selling

 

207

 

 

 

197

 

General and administrative

 

276

 

 

 

207

 

Total operating expenses

 

1,237

 

 

 

1,175

 

Income from operations

 

1,967

 

 

 

1,970

 

Interest expense

 

59

 

 

 

59

 

Interest and other income (expense), net

 

395

 

 

 

50

 

Income before income taxes

 

2,303

 

 

 

1,961

 

Provision for income taxes

 

284

 

 

 

244

 

Net income

$

2,019

 

 

$

1,717

 

Earnings per share:

 

 

 

Basic

$

2.43

 

 

$

2.03

 

Diluted

$

2.41

 

 

$

2.02

 

Weighted average number of shares:

 

 

 

Basic

 

831

 

 

 

845

 

Diluted

 

837

 

 

 

849

 


 

APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS

 

(In millions)

January 28,
2024

 

October 29,
2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

6,854

 

 

$

6,132

 

Short-term investments

 

638

 

 

 

737

 

Accounts receivable, net

 

4,700

 

 

 

5,165

 

Inventories

 

5,646

 

 

 

5,725

 

Other current assets

 

1,344

 

 

 

1,388

 

Total current assets

 

19,182

 

 

 

19,147

 

Long-term investments

 

2,910

 

 

 

2,281

 

Property, plant and equipment, net

 

2,826

 

 

 

2,723

 

Goodwill

 

3,732

 

 

 

3,732

 

Purchased technology and other intangible assets, net

 

283

 

 

 

294

 

Deferred income taxes and other assets

 

2,607

 

 

 

2,552

 

Total assets

$

31,540

 

 

$

30,729

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Short-term debt

$

100

 

 

$

100

 

Accounts payable and accrued expenses

 

3,829

 

 

 

4,297

 

Contract liabilities

 

3,147

 

 

 

2,975

 

Total current liabilities

 

7,076

 

 

 

7,372

 

Long-term debt

 

5,462

 

 

 

5,461

 

Income taxes payable

 

850

 

 

 

833

 

Other liabilities

 

723

 

 

 

714

 

Total liabilities

 

14,111

 

 

 

14,380

 

Total stockholders’ equity

 

17,429

 

 

 

16,349

 

Total liabilities and stockholders’ equity

$

31,540

 

 

$

30,729

 


 

APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

 

 

Three Months Ended

(In millions)

January 28,
2024

 

January 29,
2023

Cash flows from operating activities:

 

 

 

Net income

$

2,019

 

 

$

1,717

 

Adjustments required to reconcile net income to cash provided by operating activities:

 

 

 

Depreciation and amortization

 

91

 

 

 

120

 

Share-based compensation

 

170

 

 

 

148

 

Deferred income taxes

 

(72

)

 

 

(21

)

Other

 

(235

)

 

 

7

 

Net change in operating assets and liabilities

 

352

 

 

 

299

 

Cash provided by operating activities

 

2,325

 

 

 

2,270

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(229

)

 

 

(287

)

Cash paid for acquisitions, net of cash acquired

 

 

 

 

(20

)

Proceeds from sales and maturities of investments

 

531

 

 

 

414

 

Purchases of investments

 

(749

)

 

 

(406

)

Cash used in investing activities

 

(447

)

 

 

(299

)

Cash flows from financing activities:

 

 

 

Proceeds from commercial paper

 

100

 

 

 

298

 

Repayments of commercial paper

 

(100

)

 

 

(100

)

Common stock repurchases

 

(700

)

 

 

(250

)

Tax withholding payments for vested equity awards

 

(192

)

 

 

(136

)

Payments of dividends to stockholders

 

(266

)

 

 

(220

)

Repayments of principal on finance leases

 

1

 

 

 

(10

)

Cash used in financing activities

 

(1,157

)

 

 

(418

)

Increase (decrease) in cash, cash equivalents and restricted cash equivalents

 

721

 

 

 

1,553

 

Cash, cash equivalents and restricted cash equivalents—beginning of period

 

6,233

 

 

 

2,100

 

Cash, cash equivalents and restricted cash equivalents — end of period

$

6,954

 

 

$

3,653

 

 

 

 

 

Reconciliation of cash, cash equivalents, and restricted cash equivalents

 

 

 

Cash and cash equivalents

$

6,854

 

 

$

3,547

 

Restricted cash equivalents included in deferred income taxes and other assets

 

100

 

 

 

106

 

Total cash, cash equivalents, and restricted cash equivalents

$

6,954

 

 

$

3,653

 

 

 

 

 

Supplemental cash flow information:

 

 

 

Cash payments for income taxes

$

139

 

 

$

69

 

Cash refunds from income taxes

$

2

 

 

$

4

 

Cash payments for interest

$

34

 

 

$

34

 


 

APPLIED MATERIALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION

Corporate and Other

(In millions)

Q1 FY2024

 

Q1 FY2023

Unallocated net revenue

$

78

 

 

$

41

 

Unallocated cost of products sold and expenses

 

(297

)

 

 

(274

)

Total

$

(219

)

 

$

(233

)

 

 

 

 

 

 

 

 

Additional Information

 

Q1 FY2024

 

Q1 FY2023

Net Revenue by Geography (In millions)

 

United States

$

759

 

 

$

1,051

 

% of Total

 

11

%

 

 

16

%

Europe

$

410

 

 

$

573

 

% of Total

 

6

%

 

 

8

%

Japan

$

565

 

 

$

456

 

% of Total

 

9

%

 

 

7

%

Korea

$

1,231

 

 

$

1,293

 

% of Total

 

18

%

 

 

19

%

Taiwan

$

559

 

 

$

1,968

 

% of Total

 

8

%

 

 

29

%

Southeast Asia

$

186

 

 

$

253

 

% of Total

 

3

%

 

 

4

%

China

$

2,997

 

 

$

1,145

 

% of Total

 

45

%

 

 

17

%

 

 

 

 

Employees (In thousands)

 

 

 

Regular Full Time

 

34.5

 

 

 

33.9

 


 

APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS

 

 

Three Months Ended

(In millions, except percentages)

January 28,
2024

 

January 29,
2023

Non-GAAP Gross Profit

 

 

 

GAAP reported gross profit

$

3,204

 

 

$

3,145

 

Certain items associated with acquisitions1

 

7

 

 

 

7

 

Non-GAAP gross profit

$

3,211

 

 

$

3,152

 

Non-GAAP gross margin

 

47.9

%

 

 

46.8

%

Non-GAAP Operating Income

 

 

 

GAAP reported operating income

$

1,967

 

 

$

1,970

 

Certain items associated with acquisitions1

 

11

 

 

 

11

 

Acquisition integration and deal costs

 

3

 

 

 

6

 

Non-GAAP operating income

$

1,981

 

 

$

1,987

 

Non-GAAP operating margin

 

29.5

%

 

 

29.5

%

Non-GAAP Net Income

 

 

 

GAAP reported net income

$

2,019

 

 

$

1,717

 

Certain items associated with acquisitions1

 

11

 

 

 

11

 

Acquisition integration and deal costs

 

3

 

 

 

6

 

Realized loss (gain), dividends and impairments on strategic investments, net

 

(1

)

 

 

(4

)

Unrealized loss (gain) on strategic investments, net

 

(280

)

 

 

(4

)

Income tax effect of share-based compensation2

 

(26

)

 

 

(14

)

Income tax effects related to intra-entity intangible asset transfers

 

22

 

 

 

17

 

Resolution of prior years’ income tax filings and other tax items

 

33

 

 

 

(5

)

Income tax effect of non-GAAP adjustments3

 

1

 

 

 

 

Non-GAAP net income

$

1,782

 

 

$

1,724

 


1

These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.

2

GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis.

3

Adjustment to provision for income taxes related to non-GAAP adjustments reflected in income before income taxes.


 

APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS

 

 

Three Months Ended

(In millions, except per share amounts)

January 28,
2024

 

January 29,
2023

Non-GAAP Earnings Per Diluted Share

 

 

 

GAAP reported earnings per diluted share

$

2.41

 

 

$

2.02

 

Certain items associated with acquisitions

 

0.01

 

 

 

0.01

 

Acquisition integration and deal costs

 

 

 

 

0.01

 

Unrealized loss (gain) on strategic investments, net

 

(0.33

)

 

 

 

Income tax effect of share-based compensation

 

(0.03

)

 

 

(0.02

)

Income tax effects related to intra-entity intangible asset transfers

 

0.03

 

 

 

0.02

 

Resolution of prior years’ income tax filings and other tax items

 

0.04

 

 

 

(0.01

)

Non-GAAP earnings per diluted share

$

2.13

 

 

$

2.03

 

Weighted average number of diluted shares

 

837

 

 

 

849

 


 

APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS

 

 

Three Months Ended

(In millions, except percentages)

January 28,
2024

 

January 29,
2023

Semiconductor Systems Non-GAAP Operating Income

 

 

 

GAAP reported operating income

$

1,744

 

 

$

1,855

 

Certain items associated with acquisitions1

 

10

 

 

 

9

 

Non-GAAP operating income

$

1,754

 

 

$

1,864

 

Non-GAAP operating margin

 

35.7

%

 

 

36.1

%

Applied Global Services Non-GAAP Operating Income

 

 

 

GAAP reported operating income

$

417

 

 

$

345

 

Non-GAAP operating income

$

417

 

 

$

345

 

Non-GAAP operating margin

 

28.3

%

 

 

25.2

%

Display and Adjacent Markets Non-GAAP Operating Income

 

 

 

GAAP reported operating income

$

25

 

 

$

3

 

Non-GAAP operating income

$

25

 

 

$

3

 

Non-GAAP operating margin

 

10.2

%

 

 

1.8

%


1

These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.

 

 

Note: The reconciliation of GAAP and non-GAAP segment results above does not include certain revenues, costs of products sold and operating expenses that are reported within corporate and other and included in consolidated operating income.


APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE

 

 

Three Months
Ended

(In millions, except percentages)

January 28, 2024

 

 

GAAP provision for income taxes (a)

$

284

 

Income tax effect of share-based compensation

 

26

 

Income tax effects related to intra-entity intangible asset transfers

 

(22

)

Resolutions of prior years’ income tax filings and other tax items

 

(33

)

Income tax effect of non-GAAP adjustments

 

(1

)

Non-GAAP provision for income taxes (b)

$

254

 

 

 

GAAP income before income taxes (c)

$

2,303

 

Certain items associated with acquisitions

 

11

 

Acquisition integration and deal costs

 

3

 

Realized loss (gain), dividends and impairments on strategic investments, net

 

(1

)

Unrealized loss (gain) on strategic investments, net

 

(280

)

Non-GAAP income before income taxes (d)

$

2,036

 

 

 

GAAP effective income tax rate (a/c)

 

12.3

%

 

 

Non-GAAP effective income tax rate (b/d)

 

12.5

%


 

UNAUDITED RECONCILIATION OF NON-GAAP FREE CASH FLOW

 

 

Three Months Ended

(In millions)

January 28,
2024

 

January 29,
2023

Cash provided by operating activities

$

2,325

 

 

$

2,270

 

Capital expenditures

 

(229

)

 

 

(287

)

Non-GAAP free cash flow

$

2,096

 

 

$

1,983