Applied Materials : News Release 215.6 KB

Exhibit 99.1

APPLIED MATERIALS ANNOUNCES SECOND QUARTER 2023 RESULTS

• Revenue $6.63 billion, up 6 percent year over year
• GAAP operating margin 28.8 percent and non-GAAP operating margin 29.1 percent, both down 1.5 points year over year
• GAAP EPS $1.86 and non-GAAP EPS $2.00, up 7 percent and 8 percent year over year, respectively
• Generated $2.29 billion in cash from operations

SANTA CLARA, Calif., May 18, 2023 - Applied Materials, Inc. (NASDAQ: AMAT) today reported results for its second quarter ended April 30, 2023.

Second Quarter Results

Applied generated revenue of $6.63 billion. On a GAAP basis, the company achieved gross margin of 46.7 percent, operating income of $1.91 billion or 28.8 percent of net sales, and earnings per share (EPS) of $1.86.

On a non-GAAP adjusted basis, the company reported gross margin of 46.8 percent, operating income of $1.93 billion or 29.1 percent of net sales, and EPS of $2.00.

The company generated $2.29 billion in cash from operations and returned $1.02 billion to shareholders including $800 million in share repurchases and $219 million in dividends.

"Applied Materials delivered strong results in our second fiscal quarter with revenues and earnings in the high-end of our guidance range, and we expect to outperform our markets in 2023," said Gary Dickerson, President and CEO. "Our longer-term outlook is very positive as semiconductors become a larger and more strategically important market globally and major technology inflections are enabled by materials engineering, creating outsized growth opportunities for Applied."

Applied Materials, Inc.

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Results Summary

		Q2 FY2023			Q2 FY2022		Change
	(In millions, except per share amounts and percentages)
Net sales	$	6,630	$	6,245	6%
Gross margin		46.7 %			46.9 %		(0.2) points
Operating margin		28.8 %			30.3 %		(1.5) points
Net income	$	1,575	$	1,536	3%
Diluted earnings per share	$	1.86	$	1.74	7%
Non-GAAP Adjusted Results
Non-GAAP adjusted gross margin		46.8 %			47.0 %		(0.2) points
Non-GAAP adjusted operating margin		29.1 %			30.6 %		(1.5) points
Non-GAAP adjusted net income	$	1,692	$	1,636	3%
Non-GAAP adjusted diluted EPS	$	2.00	$	1.85	8%

A reconciliation of the GAAP and non-GAAP adjusted results is provided in the financial tables included in this release. See also "Use of Non-GAAP Adjusted Financial Measures" section.

Applied Materials, Inc.

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Business Outlook

In the third quarter of fiscal 2023, Applied expects net sales to be approximately $6.15 billion, plus or minus $400 million. Non-GAAP adjusted diluted EPS is expected to be in the range of $1.56 to $1.92.

This outlook for non-GAAP adjusted diluted EPS excludes known charges related to completed acquisitions of $0.01 per share, 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 $0.01 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

Semiconductor Systems

Q2 FY2023

Q2 FY2022

	(In millions, except percentages)
Net sales	$	4,977	$	4,458
Foundry, logic and other		84 %			65 %
DRAM		11 %			21 %
Flash memory		5 %			14 %
Operating income	$	1,764	$	1,648
Operating margin		35.4 %			37.0 %
Non-GAAP Adjusted Results
Non-GAAP adjusted operating income	$	1,774	$	1,656
Non-GAAP adjusted operating margin		35.6 %			37.1 %

Applied Global Services

Q2 FY2023

Q2 FY2022

	(In millions, except percentages)
Net sales	$	1,428	$	1,383
Operating income	$	414	$	422
Operating margin		29.0 %		30.5 %
Non-GAAP Adjusted Results
Non-GAAP adjusted operating income	$	414	$	422
Non-GAAP adjusted operating margin		29.0 %		30.5 %

Display and Adjacent Markets

Q2 FY2023

Q2 FY2022

	(In millions, except percentages)
Net sales	$	168	$	381
Operating income	$	21	$	81
Operating margin		12.5 %			21.3 %
Non-GAAP Adjusted Results
Non-GAAP adjusted operating income	$	21	$	82
Non-GAAP adjusted operating margin		12.5 %			21.5 %

Applied Materials, Inc.

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Use of Non-GAAP Adjusted Financial Measures

Applied provides investors with certain non-GAAP adjusted 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 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 adjusted 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.

Applied Materials, Inc.

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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 2023 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, our ability to meet customer demand, and our suppliers' ability to meet our demand requirements; global economic, political and industry conditions, including rising inflation and interest rates; the implementation and interpretation of new 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; 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; 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, including COVID-19; 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) 408.235.4676

Michael Sullivan(financial community) 408.986.7977