Applied Materials (AMAT) investor relations material

Executive summary

• Achieved record-breaking Q3/FQ3'26 revenue of $9.12 billion, up 25% year-over-year, with the highest sequential revenue growth in company history, driven by surging AI infrastructure demand and leadership in enabling technologies for AI computing.

• Customers are providing longer-term commitments and rolling eight-quarter forecasts, increasing demand visibility and supporting confidence in continued multi-year growth.

• Introduced up to eight new products this quarter, reinforcing leadership in foundry-logic, DRAM, and advanced packaging.

• Investments in AI, the EPIC strategy, and capacity expansion are accelerating product development and commercialization, positioning the company for sustained leadership through 2030.

• Substantial investments in operations and capacity, including new partnerships and a $500 million Singapore campus.

Financial highlights

• Q3/FQ3'26 revenue reached $9.12B, up 15% sequentially and 25% year-over-year, marking a new record.

• Non-GAAP gross margin rose to 50.4%, up 40 bps sequentially and 150 bps year-over-year.

• Non-GAAP operating margin hit a record 34%, up 190 bps sequentially and 330 bps year-over-year.

• Record non-GAAP EPS of $3.50, up 22% sequentially and 41% year-over-year.

• Free cash flow was $2.33B; $860M returned to shareholders via dividends and buybacks.

Outlook and guidance

• Q4 revenue guidance: $10.25B ±$500M, up 51% year-over-year; non-GAAP EPS guidance: $4.02 ±$0.20, up 85% year-over-year.

• Semiconductor systems revenue expected at $7.9B, up 62% year-over-year; AGS revenue at $1.84B, up 22% year-over-year.

• Non-GAAP gross margin expected at 50.4% in Q4; operating expenses at ~$1.58B; tax rate ~11%.

• Strong multi-year demand visibility, with expectations for another record year in 2027.

• Management expects continued strong revenue growth, especially in DRAM, foundry-logic, and advanced packaging.