Core Insights - Applied Materials (AMAT) reported quarterly earnings of $2.48 per share, exceeding the Zacks Consensus Estimate of $2.34 per share, and showing an increase from $2.12 per share a year ago, resulting in an earnings surprise of +5.98% [1] - The company achieved revenues of $7.3 billion for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 1.42% and up from $6.78 billion year-over-year [2] - Applied Materials has outperformed the S&P 500, with shares increasing approximately 16.9% since the beginning of the year compared to the S&P 500's gain of 10% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.36 on revenues of $7.31 billion, while for the current fiscal year, the estimate is $9.46 on revenues of $28.8 billion [7] - The estimate revisions trend for Applied Materials was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Electronics - Semiconductors industry, to which Applied Materials belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Applied Materials may be influenced by the overall industry outlook, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8] Competitor Insights - Ambarella (AMBA), another company in the same industry, is expected to report quarterly earnings of $0.06 per share, reflecting a year-over-year change of +146.2%, with revenues anticipated to be $90.03 million, up 41.3% from the previous year [9][10]

Financial Data and Key Metrics Changes - Applied Materials reported total net revenue of approximately $7.3 billion, an 8% increase year over year, exceeding guidance by about $100 million [19] - Non-GAAP gross margin was 48.9%, up 150 basis points year over year, driven by product mix and pricing strategies [19] - Non-GAAP earnings per share reached a record $2.48, reflecting a 17% year-over-year increase due to revenue growth and share repurchases [20] Business Line Data and Key Metrics Changes - Semiconductor Systems revenue was $5.43 billion, up 10% year over year, with growth in foundry logic and DRAM, partially offset by declines in ICAPS nodes [20] - Applied Global Services (AGS) revenue was $1.6 billion, a 1% increase year over year, with core services growing approximately 10% [21] - Display business revenue was $263 million, with a non-GAAP operating margin of 23.6% [22] Market Data and Key Metrics Changes - China accounted for approximately 35% of revenue in Q3, expected to decrease to about 29% in Q4 due to moderating customer spending [24] - The company is tracking over 100 new fabs or major fab expansion projects globally, a 10% increase from the previous year [9] Company Strategy and Development Direction - The company plans to invest over $200 million in Arizona to establish a state-of-the-art facility for manufacturing specialized components [9] - Applied Materials is focusing on AI leadership, with significant investments in infrastructure and R&D to support advanced manufacturing capacity [8] - The company expects to grow its advanced packaging business to over $3 billion in the coming years, driven by innovations in energy-efficient computing [13][71] Management's Comments on Operating Environment and Future Outlook - Management anticipates sequentially lower revenue and earnings in Q4 due to uncertainties in the China business and nonlinear demand from leading-edge customers [5][24] - Despite short-term challenges, the long-term growth thesis for the semiconductor industry remains intact, with expectations for market share gains as new technologies ramp up [17][26] Other Important Information - The company generated approximately $2.6 billion in cash from operations, representing 36% of revenue, and distributed about $1.4 billion to shareholders through dividends and share repurchases [23] - Non-GAAP operating expenses were $1.3 billion, slightly down as a percentage of revenue due to optimized spending [19] Q&A Session Summary Question: Can you discuss the incremental source of weakness in the outlook, particularly regarding China and leading-edge logic? - Management indicated that lower visibility in China is expected to persist for several quarters, with a significant backlog of pending export license applications affecting outlook [30][31] Question: Was China significantly stronger than expected in Q3? - Management confirmed that the quarter played out as expected, with no major surprises in the mix, although leading-edge spending was slightly less than anticipated [38][39] Question: What are the expectations for DRAM growth and its sustainability? - Management expressed confidence in strong DRAM growth, expecting it to be either a record or nearly record year, driven by leading-edge customers [85] Question: How is the advanced packaging segment expected to perform? - Management expects steady growth in advanced packaging, with plans to double the business to over $3 billion in the coming years [71] Question: What is the outlook for leading-edge logic and the associated share position? - Management remains confident in their strong position with leading-edge logic customers, expecting significant revenue growth as new technologies ramp [111][114]

Financial Data and Key Metrics Changes - Applied Materials reported total net revenue of approximately $7.3 billion, an 8% increase year over year, exceeding guidance by about $100 million [17] - Non-GAAP gross margin was 48.9%, up 150 basis points year over year, driven by product and segment mix and pricing [17] - Non-GAAP earnings per share reached a record $2.48, a 17% increase year over year [18] Business Segment Data and Key Metrics Changes - Semiconductor Systems revenue was $5.43 billion, up 10% year over year, with growth in foundry logic and DRAM, partially offset by decreases in ICAPS nodes [18] - Applied Global Services (AGS) revenue was $1.6 billion, up 1% year over year, with core services growing approximately 10% [19] - Display business revenue was $263 million, with a non-GAAP operating margin of 23.6% [20] Market Data and Key Metrics Changes - China accounted for approximately 35% of revenue in Q3, expected to decrease to about 29% in Q4 due to moderating customer spending [21] - The company is tracking over 100 new fabs or major fab expansion projects globally, a 10% increase from the previous year [7] Company Strategy and Development Direction - The company plans to invest over $200 million in Arizona to establish a state-of-the-art facility for manufacturing specialized components [7] - Applied Materials is focused on leadership in AI, with significant investments in infrastructure and R&D to support advanced manufacturing capacity [6] - The company expects to grow its advanced packaging business to over $3 billion in the coming years, driven by innovations in power electronics and energy-efficient computing [12][69] Management's Comments on Operating Environment and Future Outlook - Management anticipates sequentially lower revenue and earnings in Q4 due to uncertainties in the China business and nonlinear demand from leading-edge customers [4][21] - Despite short-term challenges, the long-term growth thesis for the semiconductor industry remains intact, with expectations for continued market share gains [15][24] - Management highlighted that the demand for DRAM is expected to grow by around 50% in fiscal 2025, driven by AI-related technologies [11][50] Other Important Information - The company generated approximately $2.6 billion in cash from operations, representing 36% of revenue, and distributed about $1.4 billion to shareholders through dividends and share repurchases [20] - Non-GAAP operating expenses were $1.3 billion, slightly down as a percentage of revenue due to optimized G&A spending [17] Q&A Session Summary Question: Concerns about the outlook for China and leading-edge logic - Management indicated that lower visibility in China is expected to persist for several quarters, with a digestion phase following large shipments in previous years [28][29] - The leading-edge logic demand is strong, but order patterns are uneven due to market concentration and timing issues [30][31] Question: Clarification on China revenue strength - Management confirmed that the quarter played out as expected, with no significant changes in the flow from leading-edge spending [36][37] Question: Future growth expectations for DRAM - Management expects DRAM growth to be sustainable, with strong demand driven by leading-edge customers [82] Question: Advanced packaging growth expectations - Management anticipates steady growth in advanced packaging, with plans to double the business to over $3 billion in the coming years [69][70] Question: Licensing backlog impact - Management highlighted a significant backlog of pending export licenses but did not include any revenue from this backlog in their outlook [59][60]

Third Quarter Fiscal 2025 Earnings Presentation August 14, 2025 Applied Materials External Forward-Looking Statements This presentation 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 product ...

Applied Materials gave a disappointing sales and profit forecast for the current period, signaling that the US trade dispute with China will weigh on demand https://t.co/1p6Ah9SnkL ...

Exhibit 99.1 Investor Relations Contact: Liz Morali (408) 986-7977 liz_morali@amat.com Applied Materials, Inc. Page 2 of 13 Results Summary | | | Q3 FY2025 | | Q3 FY2024 | Change | | --- | --- | --- | --- | --- | --- | | | | | | (In millions, except per share amounts and percentages) | | | Net revenue | $ | 7,302 | $ | 6,778 | 8% | | Gross margin | | 48.8 % | | 47.3 % | 1.5 points | | Operating margin | | 30.6 % | | 28.7 % | 1.9 points | | Net income | $ | 1,779 | $ | 1,705 | 4% | | Diluted earnings per sha ...

Core Viewpoint - Beijing Yitang Semiconductor Technology Co., Ltd. (Yitang) has filed a lawsuit against Applied Materials, Inc. (AMAT) for allegedly misappropriating its trade secrets related to plasma sources and wafer surface treatment, claiming damages of 99.99 million RMB [1][2] Group 1: Legal Proceedings - Yitang has initiated legal action in the Beijing Intellectual Property Court, asserting that AMAT unlawfully acquired and utilized its core technology secrets and disclosed them through a patent application in China [1][2] - The lawsuit has been officially filed, but the court has yet to schedule a hearing [1] - Yitang claims that the lawsuit will not significantly impact its operations or production [1] Group 2: Technology and Intellectual Property - The technology in question involves high-concentration, stable, and uniform plasma used for wafer surface treatment, which is critical for Yitang's semiconductor processing equipment [1] - The two employees involved in the case were previously employed by Yitang's wholly-owned subsidiary, Mattson Technology, Inc. (MTI), and had signed confidentiality agreements regarding the technology [2] - Evidence suggests that AMAT submitted a patent application to the Chinese National Intellectual Property Administration, naming the two former MTI employees as primary inventors, thereby disclosing Yitang's trade secrets [2] Group 3: Impact on Business - Yitang alleges that AMAT's actions have caused significant damage to its intellectual property and economic interests, including promoting and selling products that utilize the misappropriated technology in China [2]

Core Viewpoint - Beijing Yitang Semiconductor Technology Co., Ltd. has filed a lawsuit against Applied Materials, Inc. for allegedly illegally obtaining and using its core technology secrets related to plasma sources and wafer surface treatment, which has caused significant damage to its intellectual property and economic interests [3][7]. Group 1: Lawsuit Details - The lawsuit was filed in the Beijing Intellectual Property Court, with the case number (2025) Jing 73 Min Chu 908 [3]. - Yitang claims that Applied Materials has violated the Anti-Unfair Competition Law of the People's Republic of China by disclosing and claiming ownership of its technology secrets through a patent application [3][7]. - The company seeks several legal remedies, including stopping the defendant from further obtaining its technology secrets, destroying any related materials, and compensating for economic losses totaling 99,990,000 yuan [7][8]. Group 2: Technology and Business Background - Yitang's key technology involves the use of high-concentration, stable plasma for wafer surface treatment, which is essential for dry stripping, dry etching, and surface modification in semiconductor processing [6][8]. - The company has a strong original technology capability in this field and owns relevant trade secrets [6]. - Yitang's main business includes manufacturing dry stripping, rapid thermal processing, and dry etching equipment, which are critical processes in chip manufacturing [8].

Core Viewpoint - The lawsuit filed by Yitang Co., Ltd. against Applied Materials Inc. (AMAT) is aimed at protecting intellectual property rights and addressing the alleged illegal acquisition and use of core technology secrets related to plasma sources and wafer surface treatment [2][5][7]. Group 1: Lawsuit Details - Yitang Co., Ltd. has initiated legal proceedings against AMAT for allegedly obtaining and using its core technology secrets without authorization, which were subsequently disclosed through a patent application in China [2][5]. - The company is seeking a court order to stop AMAT from using its technology secrets and is claiming economic damages totaling 99.99 million yuan [2][5]. Group 2: Technology and Innovation - The technology in question involves high-concentration, stable, and uniform plasma used for wafer surface treatment, which is critical for various semiconductor processing equipment [5]. - Yitang Co., Ltd. claims to possess leading original technology capabilities in this field and has relevant trade secrets [5]. Group 3: Employee Recruitment and Confidentiality - AMAT allegedly recruited two employees from Yitang's subsidiary, Mattson Technology, Inc. (MTI), who had access to the core technology secrets and had signed confidentiality agreements [5][7]. - Evidence suggests that after their recruitment, these employees contributed to a patent application that disclosed the technology secrets shared between Yitang and MTI [5][7]. Group 4: Impact on Business - The lawsuit is positioned as a measure to protect the company's intellectual property and is not expected to have a significant adverse impact on its operations, with the final outcome dependent on the court's ruling [5]. - The alleged actions of AMAT are said to have caused serious damage to Yitang's intellectual property and economic interests, including promoting and selling products using the disputed technology in China [7]. Group 5: Industry Context - Applied Materials Inc. is a major player in the semiconductor equipment industry, with 2024 revenues projected to exceed $25 billion, making it the second-largest supplier globally, following ASML [7].

Core Viewpoint - The semiconductor materials industry is crucial for chip manufacturing, encompassing essential materials like silicon wafers, photolithography resins, and electronic gases, which are vital for technological advancement and industry growth [2][4]. Group 1: Semiconductor Materials Overview - Semiconductor materials play a core role in chip manufacturing, ensuring complete functionality and superior performance of chips, which is significant for technological progress [4]. - The industry includes various generations of materials, from the first generation (germanium, silicon) to the third generation (gallium nitride, silicon carbide), each with unique properties and applications [6][10]. Group 2: Market Dynamics - In 2024, the global semiconductor materials market is projected to reach $628 billion, with a year-on-year growth of 19.1% [30]. - Japan holds a significant market share of 52% in the global semiconductor materials market, indicating its strong position and expertise in this field [19]. - China is focusing on increasing the domestic production rate of high-end semiconductor materials to reduce reliance on imports and ensure supply chain security [23][30]. Group 3: Domestic Developments - China's 12-inch silicon wafer domestic production rate is currently below 10%, but companies like Shanghai Silicon Industry and Lian Micro are expanding capacity to increase market share [26][59]. - The domestic market for ArF photolithography resins is even lower, at less than 5%, although companies like Nanda Optoelectronics are making progress in this area [28]. Group 4: Policy and Investment - The National Integrated Circuit Industry Investment Fund has provided 344 billion yuan to support the semiconductor materials industry, driving technological innovation and stability [29]. - The U.S. CHIPS Act allocates $52 billion to enhance domestic semiconductor manufacturing capabilities, aiming to reduce foreign dependency and promote innovation [31]. Group 5: Industry Trends - The semiconductor materials industry is expected to experience accelerated domestic substitution, with a focus on technological breakthroughs and expanding application scenarios [33]. - By 2028, the domestic production rate of third-generation semiconductor materials is anticipated to exceed 50%, indicating a significant shift towards local manufacturing [134]. Group 6: Key Players and Innovations - Major players in the semiconductor materials sector include companies like TCL Technology, North Huachuang, and Sanan Optoelectronics, which are leading in various segments [101][102]. - Innovations in materials such as silicon carbide substrates and advanced packaging technologies are driving the industry's growth and competitiveness [96][100].