Applied Materials Q4 Earnings Beat Estimates, Revenues Fall Y/Y

Core Insights - Applied Materials Inc. (AMAT) reported fourth-quarter fiscal 2025 non-GAAP earnings of $2.17 per share, exceeding the Zacks Consensus Estimate by 2.8%, although this represents a 6.5% decline from the previous year's figure [1] - The company achieved revenues of $6.8 billion in the fourth quarter, surpassing the Zacks Consensus Estimate by 1.5%, but down 3% year over year [2] Financial Performance - Segment-wise, Semiconductor Systems generated revenues of $4.76 billion, accounting for 70% of total revenues, which is an 8.1% decline from the year-ago quarter and below the Zacks Consensus Estimate of $4.79 billion [3] - Applied Global Services reported revenues of $1.63 billion, representing 23.9% of total revenues, a slight decline of 0.9% year over year, but above the Zacks Consensus Estimate of $1.60 billion [3] - Corporate and Other revenues totaled $415 million, up 81.2% year over year, with Display segment revenues included under this category amounting to $355 million [4] Geographic Revenue Breakdown - Revenues from various regions included: - United States: $655 million (10%) - Europe: $220 million (3%) - Japan: $448 million (6%) - Korea: $1.22 billion (18%) - Taiwan: $1.83 billion (27%) - Southeast Asia: $460 million (7%) - China: $1.96 billion (29%) [4] - Year-over-year revenue changes by region showed growth in Korea (4%), Taiwan (42.7%), and Southeast Asia (46.5%), while declines were noted in Japan (22.9%), Europe (45.7%), China (8.1%), and the United States (43.2%) [5] Margins and Expenses - The non-GAAP gross margin was reported at 48.1%, an increase of 60 basis points year over year [6] - Non-GAAP operating expenses were $1.33 billion, remaining roughly flat year over year, and represented 19.5% of sales, a decrease from the prior year [6] - The non-GAAP operating margin was 28.6%, down 70 basis points from the year-ago quarter [6] Balance Sheet and Cash Flow - As of October 26, 2025, cash and cash equivalents plus short-term investments stood at $8.57 billion, an increase from $7.01 billion at the end of the previous quarter [7] - Long-term debt was reported at $6.46 billion [7] - The company generated non-GAAP free cash flow of $2.04 billion and returned $1.22 billion to shareholders, including $851 million in share repurchases and $365 million in dividends for the quarter [7] Guidance - For the fiscal first quarter of 2026, AMAT expects net sales of $6.85 billion, with a variance of +/- $500 million, compared to the Zacks Consensus Estimate of $6.89 billion [8] - Projected sales for segments include Semiconductor Systems at $5.03 billion, Applied Global Services at $1.52 billion, and Display at $305 million [10] - The company anticipates a non-GAAP gross margin of approximately 48.4% and non-GAAP operating expenses of around $1.33 billion, with a projected non-GAAP earnings per share of $2.18 [10]