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Applied Materials, Inc. AMAT

Technology  —  Semiconductor Equipment & Materials
485.00 10.75 2.27% as of 25 Sep
Market cap
$382.9B
P/E
41.6×
S&P 500 Member Dividend Champion (10y) Revenue Champion (5y)
Indexes indicate stock being part of an index,
Growth Flags show if company had growth for consecutive years
Overview Business Profile Financial Analysis Income Statement Balance Sheet Cash Flow Metrics & Ratios 10-Q 10-K

Applied Materials, Inc. (AMAT) Financial Analysis

Updated · Covers results through Q3 FY2026 · How this is made

Snapshot

Applied Materials generated $28.4 billion of revenue in FY2025, $13.8 billion of gross profit in FY2025, and $7.0 billion of net income in FY2025. Diluted EPS was $8.66 in FY2025, while operating cash flow was $8.0 billion in FY2025. Revenue over the TTM to Q3 FY2026 was $30.8 billion, and net income over the TTM to Q3 FY2026 was $9.3 billion.

The latest reported quarter, Q3 FY2026, recorded $9.1 billion of revenue, $4.6 billion of gross profit, and $3.1 billion of operating income. Net income was $2.5 billion in Q3 FY2026, while diluted EPS was $3.17 in Q3 FY2026. Market capitalisation was $376.6 billion as of September 24, 2026.

Growth

Revenue was $28.4 billion in FY2025, increasing 4.39% in FY2025 against FY2024. Revenue compound annual growth was 3.23% in FY2022–FY2025 and 10.5% in FY2020–FY2025. Diluted EPS was $8.66 in FY2025, with growth of 0.58% in FY2025 against FY2024; its compound annual growth was 5.19% in FY2022–FY2025 and 17.2% in FY2020–FY2025.

Free cash flow was $5.7 billion in FY2025 and declined −23.5% in FY2025 against FY2024. Free cash flow compound annual growth was 7.51% in FY2022–FY2025 and 11.1% in FY2020–FY2025. Revenue was $9.1 billion in Q3 FY2026, up 24.8% in Q3 FY2026 against Q3 FY2025 and 15.2% in Q3 FY2026 against Q2 FY2026. Free cash flow was $2.3 billion in Q3 FY2026.

Profitability

Gross margin was 48.7% in FY2025, an increase of 1.2 percentage points in FY2024–FY2025 and 4.0 percentage points in FY2020–FY2025. Operating margin was 29.2% in FY2025, increasing 0.3 percentage points in FY2024–FY2025 and 3.8 percentage points in FY2020–FY2025. Pre-tax margin was 32.7% in FY2025, up 2.7 percentage points in FY2024–FY2025 and 8.5 percentage points in FY2020–FY2025.

Net margin was 24.7% in FY2025, declining −1.7 percentage points in FY2024–FY2025 while remaining 3.6 percentage points above its FY2020 level in FY2020–FY2025. Return on equity was 35.5% in FY2025, return on assets was 19.8% in FY2025, and return on invested capital was 28.2% in FY2025. Gross margin was 50.3% and operating margin was 33.7% in Q3 FY2026. Industry-median comparison figures are not reported.

Balance sheet

Total debt was $6.6 billion in FY2025, compared with shareholders’ equity of $20.4 billion in FY2025. Cash and short-term investments were $8.6 billion in FY2025, resulting in net debt of −$2.0 billion in FY2025. Working capital was $12.9 billion in FY2025, and book value per share was $25.39 in FY2025.

At Q3 FY2026, net debt was −$2.7 billion, compared with −$1.8 billion in Q2 FY2026 and −$752.0 million in Q3 FY2025. The current ratio was 2.4× in Q3 FY2026, while debt to equity was 0.3× in Q3 FY2026. The change in net debt was −$903.0 million in Q3 FY2026 against Q2 FY2026 and −$1.9 billion in Q3 FY2026 against Q3 FY2025.

Cash flow & capital return

Operating cash flow was $8.0 billion in FY2025, declining −8.29% in FY2025 against FY2024. Capital expenditure was $2.2 billion in FY2025, compared with $1.2 billion in FY2024. Free cash flow was $5.7 billion in FY2025, down −23.5% in FY2025 against FY2024, and represented 81.9% of net income in FY2025.

Dividends paid were $1.4 billion in FY2025, while net share repurchases were $4.6 billion in FY2025. Capital returned to shareholders totaled $6.0 billion in FY2025 and $24.9 billion in FY2021–FY2025. Weighted average shares were 804.0 million shares in FY2025, and the share count changed −12.2% in FY2020–FY2025. Free cash flow was $2.3 billion in Q3 FY2026, increasing 978.7% in Q3 FY2026 against Q2 FY2026.

Valuation

Market capitalisation was $376.6 billion as of September 24, 2026. The P/E was 40.6× as of September 24, 2026, above the five-year median of 20.9× as of September 24, 2026, over the five fiscal years to FY2025, and the ten-year median of 18.1× as of September 24, 2026, over the ten fiscal years to FY2025. The P/S was 12.2× as of September 24, 2026, above the five-year median of 5.5× as of September 24, 2026, over the five fiscal years to FY2025, and the ten-year median of 3.8× as of September 24, 2026, over the ten fiscal years to FY2025.

P/B was 14.7× and EV/Sales was 12.1× as of September 24, 2026; both were above their five- and ten-year medians as of September 24, 2026. EV/Cash flow was 65.0× as of September 24, 2026, above the five-year median of 19.3× and ten-year median of 16.8× as of September 24, 2026. Industry-median valuation figures are not reported.

What changed since last quarter

Revenue increased to $9.1 billion in Q3 FY2026 from $7.9 billion in Q2 FY2026, a 15.2% change in Q3 FY2026 against Q2 FY2026. Revenue was also 24.8% higher in Q3 FY2026 against Q3 FY2025. Gross margin reached 50.3% in Q3 FY2026, increasing 0.4 percentage points in Q3 FY2026 against Q2 FY2026 and 1.5 percentage points in Q3 FY2026 against Q3 FY2025. Operating margin reached 33.7% in Q3 FY2026, increasing 1.8 percentage points sequentially and 3.2 percentage points year over year in Q3 FY2026.

Diluted EPS was $3.17 in Q3 FY2026, down −9.69% in Q3 FY2026 against Q2 FY2026 but up 42.8% in Q3 FY2026 against Q3 FY2025. Free cash flow was $2.3 billion in Q3 FY2026, up 13.7% in Q3 FY2026 against Q3 FY2025. The reasons for these changes are not reported.

Open questions

  • What factors drove the sequential increase in revenue and operating margin?
  • Why did diluted EPS decline sequentially while operating income increased?
  • What caused free cash flow to vary across the recent quarters?
  • What explains the difference between the rise in pre-tax margin and the decline in net margin during the latest fiscal year?

This page is for information only. It is not investment advice, a recommendation or an offer to buy or sell any security. Figures may contain errors; verify against the company's filings.