Applied Materials, Inc. (AMAT) Earnings

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Oct 2026upcoming

Next quarter

Expected to report Nov 12, 2026 — estimated from last year’s reporting date.

Consensus is $4.05 EPS for Oct 2026 across 9 estimates, ranging $4.02 to $4.22.

AMAT Jul 2026

Reported Aug 13, 2026 · after the close

: 3.55%
: -5.12%

: $3.38
: $3.50
: —
: $9.12B

Reported results

: $9.12B; from $7.30B
: 50.31%; from 48.78%
: $3.08B; from $2.23B
: 33.74%; from 30.58%
: $2.54B; from $1.78B
: $3.17; from $2.22

Highlights

Record growth: Q3 FY2026 revenue was $9.115 billion, up 25% year over year and approximately 15% from $7.91 billion in Q2, marking Applied Materials’ strongest sequential revenue increase.
EPS beat: Non-GAAP diluted EPS was $3.50, ahead of the $3.38 consensus by 3.55% and up 41% from $2.48 a year ago.
AI-led demand: Management raised its Semiconductor Systems revenue expectations for calendar 2026 and cited strong demand across DRAM, leading-edge foundry-logic and advanced packaging.
Semiconductor Systems: Revenue rose 27% year over year to $7.04 billion, while non-GAAP operating margin expanded to 38.0% from 33.2%. DRAM increased to 26% of segment revenue from 22% a year ago.
Margin expansion: Consolidated GAAP gross margin reached 50.3%, up 1.5 percentage points year over year, while GAAP operating margin increased 3.1 points to 33.7%.
Fourth-quarter outlook: Applied expects Q4 revenue of $10.25 billion, plus or minus $500 million, and non-GAAP EPS of $4.02, plus or minus $0.20.
Cash generation: Operating cash flow was a record $3.04 billion and non-GAAP free cash flow was $2.33 billion, up 14% year over year.
Shareholder returns: The company returned $860 million in the quarter through $440 million of repurchases and $420 million of dividends.
Services contribution: Applied Global Services revenue increased 22% to $1.781 billion and operating margin rose to 30.1% from 27.3%.

Analysis

Applied Materials’ Q3 FY2026 was a broad-based, AI-driven acceleration rather than simply an earnings beat. Revenue reached a record $9.115 billion, up 25% from $7.302 billion a year ago and approximately 15% sequentially from $7.91 billion in Q2. Non-GAAP EPS of $3.50 exceeded the $3.38 consensus by 3.55% and rose 41% year over year, although it was slightly below the prior quarter’s reported $3.51 GAAP EPS. The quarter’s operating performance was stronger than that comparison suggests: GAAP operating income rose 38% year over year to $3.075 billion, with operating margin expanding to 33.7% from 30.6%.

The defining factor was demand visibility across semiconductor equipment, particularly AI-related DRAM, leading-edge logic and advanced packaging. Semiconductor Systems revenue grew 27% to $7.04 billion, with DRAM accounting for 26% of sales versus 22% a year ago, while Applied Global Services grew 22% to $1.781 billion. Applied also delivered its 13th consecutive quarter of year-over-year gross-margin expansion. Management’s confidence extends beyond the immediate print: Q4 guidance calls for $10.25 billion of revenue and $4.02 of non-GAAP EPS, and the company expects another strong growth year in 2027. GAAP earnings were affected by a $220 million unrealized strategic-investment loss and other adjustments, making non-GAAP results the clearer view of operating momentum.

AI equipment demand

Management framed the quarter around accelerating AI infrastructure investment and increasing customer visibility. Applied raised its Semiconductor Systems revenue expectations for calendar 2026 and expects growth particularly in DRAM, leading-edge foundry-logic and advanced packaging during the second half of the calendar year. It also said it expects another strong growth year in 2027, while investing in manufacturing capacity to support projected demand through the end of the decade.

Technology launches: Applied introduced six systems for DRAM and advanced packaging, including products supporting HBM stacking, hybrid bonding, copper interconnects and defect analysis.
EPIC Center: Partnerships expanded to 11 engagements, including Broadcom, UC Berkeley and SCREEN Semiconductor Solutions, broadening collaboration in advanced packaging and materials engineering.
Capacity investment: The company opened a $500 million Tampines Campus in Singapore, more than doubling its advanced cleanroom capacity there.

Semiconductor Systems

Semiconductor Systems was the main growth engine. Revenue increased 27% year over year to $7.040 billion, and non-GAAP operating income rose to $2.673 billion from $1.849 billion. Non-GAAP gross margin expanded to 55.4% from 53.5%, while operating margin increased to 38.0% from 33.2%.

End-market mix: Foundry, logic and other applications represented 67% of revenue versus 69% a year ago; DRAM rose to 26% from 22%, while flash memory declined to 7% from 9%.
Product positioning: New deposition and etch systems target continued scaling in logic, DRAM and 3D NAND, while new metrology and plating systems address advanced packaging and HBM architectures.
Reporting change: Applied moved its 200-millimeter equipment business into Semiconductor Systems in fiscal 2026 and recast prior-period segment figures.

Margin expansion

Profitability continued to improve alongside the revenue acceleration. Consolidated GAAP gross profit was $4.586 billion, producing a 50.3% gross margin versus 48.8% a year ago. GAAP operating income reached a record $3.075 billion, while operating margin expanded 3.1 percentage points to 33.7%. Non-GAAP operating income was $3.096 billion and margin was 34.0%, up from 30.7%.

Services profitability: Applied Global Services gross margin improved to 35.6% from 33.8%, and operating margin rose to 30.1% from 27.3% on revenue of $1.781 billion.
Earnings quality: GAAP net income was $2.538 billion, or $3.17 per diluted share, while non-GAAP net income was $2.795 billion, or $3.50 per share.
Non-operating volatility: GAAP results included a $220 million unrealized loss on strategic investments, while the non-GAAP reconciliation also included a $33 million tax benefit from intra-entity intangible-asset transfers.

Fourth-quarter outlook

Applied expects the acceleration to continue into Q4 FY2026. Revenue guidance is $10.25 billion, with a range of plus or minus $500 million, implying approximately 12.5% sequential growth at the midpoint from Q3. Non-GAAP diluted EPS is expected at $4.02, with a range of plus or minus $0.20.

Growth drivers: Management expects continued strength in the second half of the calendar year, led by DRAM, leading-edge foundry-logic and advanced packaging.
Guidance adjustments: Q4 EPS guidance includes a $0.05 per-share tax benefit from intra-entity intangible-asset transfers, a $0.01 share-based-compensation tax benefit and a $0.01 charge related to completed acquisitions.
Longer-term posture: Applied is adding manufacturing and R&D capacity in anticipation of sustained demand through the end of the decade.

Cash and capital allocation

Cash generation was strong enough to fund elevated investment while continuing shareholder distributions. Operating cash flow reached a record $3.037 billion, up from $2.634 billion a year ago, and free cash flow was $2.330 billion versus $2.050 billion. Capital expenditures rose to $707 million from $584 million as the company expands capacity.

Shareholder returns: Applied paid $420 million in dividends and repurchased $440 million of stock, returning $860 million in total.
Liquidity: Cash and cash equivalents were $7.037 billion at July 26, 2026, compared with $7.241 billion at fiscal year-end, while short-term investments increased to $2.196 billion from $1.332 billion.
Investment in growth: Nine-month capital expenditures reached $1.988 billion, up from $1.475 billion in the comparable period, consistent with the planned capacity build-out.

Applied Materials, Inc.

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