Revenue $6.65 billion, flat year over year GAAP operating margin 28.8 percent and non-GAAP operating margin 29.0 percent, flat and down 0.1 point year over year, respectively GAAP EPS $2.06 and non-GAAP EPS $2.09, up 11 percent and 5 percent year over year, respectively Generated $1.39 billion in cash from operations SANTA CLARA, Calif., May 16, 2024 (GLOBE NEWSWIRE) --  Applied Materials, Inc. (NASDAQ:AMAT) today reported results for its second quarter ended Apr. 28, 2024. Second Quarter Results Applied generated revenue of $6.65 billion. On a GAAP basis, the company reported gross margin of 47.4 percent, operating income of $1.91 billion or 28.8 percent of net revenue, and earnings per share (EPS) of $2.06. On a non-GAAP basis, the company reported gross margin of 47.5 percent, operating income of $1.93 billion or 29.0 percent of net revenue, and EPS of $2.09. The company generated $1.39 billion in cash from operations and distributed $1.09 billion to shareholders including $820 million in share repurchases and $266 million in dividends. "Applied Materials continues to deliver strong performance in 2024, with fiscal second quarter revenue and earnings towards the high end of our guided range," said Gary Dickerson, President and CEO. "Applied Materials has the most enabling portfolio of materials engineering technologies for chips that underpin tectonic shifts in technology including AI, IoT, electric vehicles and clean energy, which puts us in a great position to grow along with these long-term, secular trends." Results Summary             Q2 FY2024   Q2 FY2023   Change   (In millions, except per share amounts and percentages) Net revenue $ 6,646     $ 6,630     —   Gross margin   47.4%       46.7%     0.7 points Operating margin   28.8%       28.8%     —   Net income $ 1,722     $ 1,575     9 % Diluted earnings per share $ 2.06     $ 1.86     11 % Non-GAAP Results           Non-GAAP gross margin   47.5%       46.8%     0.7 points Non-GAAP operating margin   29.0%       29.1%     (0.1) point Non-GAAP net income $ 1,744     $ 1,692     3 % Non-GAAP diluted EPS $ 2.09     $ 2.00     5 % Non-GAAP free cash flow $ 1,135     $ 2,037     (44 )% 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 third quarter of fiscal 2024, Applied expects net revenue to be approximately $6.65 billion, plus or minus $400 million. Non-GAAP diluted EPS is expected to be in the range of $1.83 to $2.19. 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. Second 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 Q2 FY2024   Q2 FY2023   (In millions, except percentages) Net revenue $ 4,901     $ 4,977   Foundry, logic and other   65%       84%   DRAM   32%       11%   Flash memory   3%       5%   Operating income $ 1,701     $ 1,715   Operating margin   34.7%       34.5%   Non-GAAP Results     Non-GAAP operating income $ 1,711     $ 1,725   Non-GAAP operating margin   34.9%       34.7%   Applied Global Services Q2 FY2024   Q2 FY2023   (In millions, except percentages) Net revenue $ 1,530     $ 1,428   Operating income $ 436     $ 384   Operating margin   28.5 %     26.9 % Non-GAAP Results     Non-GAAP operating income $ 436     $ 384   Non-GAAP operating margin   28.5 %     26.9 % Display and Adjacent Markets Q2 FY2024   Q2 FY2023   (In millions, except percentages) Net revenue $ 179     $ 168   Operating income $ 5     $ 16   Operating margin   2.8 %     9.5 % Non-GAAP Results     Non-GAAP operating income $ 5     $ 16   Non-GAAP operating margin   2.8 %     9.5 % Corporate and Other       (In millions) Q2 FY2024   Q2 FY2023 Unallocated net revenue $ 36     $ 57   Unallocated cost of products sold and expenses   (266 )     (261 ) Total $ (230 )   $ (204 )   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 third 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; global economic, political and industry conditions, including rising inflation and interest rates; the implementation and interpretation of 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; the effects of geopolitical turmoil or conflicts; 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; our ability to meet customer demand, and our suppliers' ability to meet our demand requirements; 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 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-Q 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) 408.235.4676Michael Sullivan (financial community) 408.986.7977 APPLIED MATERIALS, INC.UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS     Three Months Ended   Six Months Ended (In millions, except per share amounts) April 28,2024   April 30,2023   April 28,2024   April 30,2023 Net revenue $ 6,646   $ 6,630     $ 13,353   $ 13,369   Cost of products sold   3,493     3,536       6,996     7,130   Gross profit   3,153     3,094       6,357     6,239   Operating expenses:               Research, development and engineering   785     775       1,539     1,546   Marketing and selling   209     194       416     391   General and administrative   247     214       523     421   Total operating expenses   1,241     1,183       2,478     2,358   Income from operations   1,912     1,911       3,879     3,881   Interest expense   59     61       118     120   Interest and other income (expense), net   141     (73 )     536     (23 ) Income before income taxes   1,994     1,777       4,297     3,738   Provision for income taxes   272     202       556     446   Net income $ 1,722   $ 1,575     $ 3,741   $ 3,292   Earnings per share:               Basic $ 2.08   $ 1.87     $ 4.50   $ 3.90   Diluted $ 2.06   $ 1.86     $ 4.47   $ 3.88   Weighted average number of shares:               Basic   830     843       831     844   Diluted   836     847       837     848   APPLIED MATERIALS, INC.UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS   (In millions) April 28,2024   October 29,2023 ASSETS       Current assets:       Cash and cash equivalents $ 7,085   $ 6,132 Short-term investments   472     737 Accounts receivable, net   4,778     5,165 Inventories   5,691     5,725 Other current assets   1,239     1,388 Total current assets   19,265     19,147 Long-term investments   2,983     2,281 Property, plant and equipment, net   2,958     2,723